The Pellucid Perspective - April 2018 - 13

across each of the markets driven by the local market price spectrum, so the absolute price of golf isn't necessarily revealed by
a balanced distribution (i.e. Value golf could run the range of
$35-$70 depending on the local cost-of-living variances).
During the "go-go" years of supply development (19902000), Cincinnati was slightly ahead of the "build a course a day"
curve, increasing supply at an annual rate of ~3% (compared to
the (unreasonable) US average of >2%). Working to slightly
offset this was average annual population growth (~1% annually
during that period). Using our pre-2000 calculation for supply
dilution/absorption (supply change vs. population change) we
estimate that the market was at ~17%
dilution at the turn of the century vs.
the 1990 benchmark (slightly above
the US average of 11% "overhang").
Since 2000, the annual rate of supply
growth has throttled back significantly
(~<1%) while the population growth
rate has continued roughly on the pace
of the national average of ~1%. A better available metric however for supply
dilution/absorption in the post-2000
period (because we have semi-accurate
facility-reported rounds figures at state
and market level) is comparing supply growth to the changes in rounds
demand. Since 2000, the market has
experienced a slight decline in the annual rounds demand rate (<1% similar
to the national average of -1% annually) so we're actually showing increased
supply dilution of ~14% during the
'00-'13 period. Combining the '90-'00
decade dilution rate and the '00-'13
period results, the average facility in
the market is ~31% worse off than they
were at the '90 benchmark (on pace
with the national rate of 33% supply
dilution for that same '90-'13 period).
Given that current "reality," the market has a considerable uphill battle to
either dramatically reduce supply (i.e.
shrink it by 2%+/yr) or find a way to
grow rounds demand annually at 2%+
in order to get out of this challenging
over-supply situation.
The average facility has throughput
of roughly 25K rds/yr, slightly lower
than the national average before factoring in climate and daylight influences. The more accurate measure
is the market's 45% Utilization Rate
which meaningfully lags the Top
25 US Golf Markets' average (56%).
This means that, after factoring in a
slightly shorter than average season,
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the market's average golf "factory" runs at lower throughput
vs. its Top 25 US Golf Markets peer group. On the annual
Golf Fees Revenue productivity side, the market generates
roughly $1.0M per public regulation-length EHE, which only
slightly trails the Top 25 Markets average. As we move down
the waterfall of health metrics, the combination of the lagging
Utilization and lower Revenue per EHE combine to produce
a RevpAR result that significantly trails the Top 25 Markets
benchmark. As a final measure for the Top 25, the Golf Fee
Profit-per-Available Round estimate (designed to equalize the
equation when comparing high cost-of-living markets to more

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