The Pellucid Perspective - January 2018 - 13

MARKET FOCUS

San Diego operators 'weathering' golf 's storm
San Diego-Carlsbad Core Business
Statistical Area (CBSA)

n this monthly section we profile one of the Top 25 US Golf
Markets based on a Pellucid composite score of the golfer
base, the supply level and rounds demand. Within that Top
25 universe, we then rank them based on relative health using
a Pellucid weighted scoring system of 8 variables ranging from
Population Growth to Estimated Profitability-per-Available
Round. In this issue, we'll profile the 19th healthiest market, the
Atlanta, GA Metro Core Business Statistical Area (CBSA).
As fitting to usher in a new year, this month we highlight the
healthiest golf market in the country, the San Diego-Carlsbad
CA CBSA. San Diego often gets cited as the most favorable
weather climate for golf and one of the most expensive golf markets in the US but those actually aren't the driving factors in the
market's top ranking as we'll outline below.
By rounds demand (one of our 3 selection criteria for initial
inclusion in the Top 25 list), San Diego ranks number 14 among
US markets with facility-reported annual demand of just over 5M
rounds (that facility-reported tally counts both local and tourist
play). Looking at the golf consumer base, we see that San Diego
is home to a relatively "thin" local golfer base of roughly 279K
golfers (this is only local, resident population, doesn't count the
tourism crowd). That golfer base is served by an even "thinner"
amount of supply (real estate is precious) of 92 18-hole equivalent (EHE) facilities, producing an average ratio of 3K local resident golfers per EHE, well above the national average.
The supply mix vs. the national distribution across Pellucid's
five access/value/usage segments shows a meaningful bias to the
Learning & Practice segment at 15% of holes vs. 6% of holes nationally. The balance of Value-added golf supply (Private & Public Premium) vs. Value golf (Public Value, Price and Learning &
Practice) is 46%/54% vs. the national average of 50%/50% meaning, surprisingly, that despite the high cost of living, relatively
speaking the market skews slightly to more affordable golf than
the national average. (Remember, however, that the price range of
Premium, Value and Price is adjusted within market, illustrated by
the Public-Value segment in San Diego ranging from $59-$92,
well above the national norms). Within Public-Regulation golf,
the distribution between Premium/Value/Price is 28%/39%/33%
which again meaningfully "tilts" the direction of more affordable
golf vs. the national picture of 34%/42%/24% (relatively).
During the "go-go" years of supply development (1990-2000),
the San Diego CBSA was an "average" participant in the "build
a course a day" craze (annual (unsustainable) supply growth of
~2%) by adding holes at a Compound Annual Growth Rate
(CAGR) of 2.3%. They benefitted however, similar to many
markets, from annual population growth just above 1%, meaning
theoretically they entered the new century with supply dilution of
11% or very close to the national average (-11%). Since 2000, the
rate of supply growth has throttled back (<1% CAGR similar to
the national average) while population has continued to grow at
www.PellucidCorp.com

Private

PublicPremium

PublicValue

PublicPrice

Golfer Base
- Est. # of Golfers (Ks)
- # of 18 Hole Equivalent Facilities
- Golfers per 18-Hole Equiv.

San DiegoCarlsbad
CBSA

Supply Mix
- Private
- Pub-Prem
- Pub-Val
- Pub-Price
- Learn & Prac

Future
Facility

Tot US

Index
vs. US

278.8 23,400
92 14,672
3,030 1,595

190

31%
15%
21%
18%
15%

27%
23%
28%
16%
6%

115
65
75
113
250

12%
14%

9%
-12%

129
N/A

-21%

N/A

49.6

33.8

147

50%
56%
$2,728.9 $1,155
$31
$19

89
236
163

Supply/Demand Balance
- '00-'13 Cume Supply Growth/Decline*
- '00-'13 Cume Rds Demand Growth/
Decline*
- '00-'13 Cume Mkt Supply Dilution
(-)/Absorption (+) Level* **
- Avg Ann Rds Velocity (Ks per 18-hole
vs. ks) (EHE)
Rounds & GF Revenue Health
- % Utilization Rate
- Avg. Ann. Rev. per Public
Regulation EHE ($Ks)
- Revenue per Available Round
(RevpAR)

Learning
& Practice

* Inverse index, lower is better
** Period % Chng in Rds vs. Period % Chng in Supply

Above average level vs. US (Index >105)
Average level vs. US (Index 95-104)
Below average level vs. US (Index <95)

roughly 1% annually (despite the high cost of living, people love
the weather/lifestyle "dividend"). A better available metric for
supply dilution/absorption in the post-2000 period is comparing
supply growth to the changes in rounds demand tracking (rather
The Pellucid PersPecTive

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Table of Contents for the Digital Edition of The Pellucid Perspective - January 2018