The Pellucid Perspective - April 2012 - (Page 16)

MARKET FOCUS Detroit, MI Core Business Statistical Area (CBSA) his month we take a look at the Detroit, MI CBSA, in the heart of the economic meltdown in the US, which is concurrently in the media being both applauded (for resilience) and ridiculed (Chrysler’s campaign, “Imported from Detroit,” is it really so different and so distressed to be marketed as a foreign country?). Once again though, for this analysis we’re focused on the health of the local golf economy and we’ll let the other economists and philanthropists figure out the bigger issues of “food deserts” and redistribution of the population into more concentrated areas that can be serviced and provide the seeds for a rebirth of local commerce. Believe it or not, Detroit ranks 4th of the Top 25 golf markets in the US by number of golfers. The sizeable golfer base of roughly 626K is served by a healthy number (205) of 18-hole equivalent (EHE) facilities, producing a ratio of just over 3,000 golfers per EHE which is well above the national average (remember, this doesn’t count part-time or seasonal residents or any tourist bodies). The supply mix skew vs. the national distribution across Pellucid’s five access/value/usage segments shows a higher concentration of Public-Premium Believe it or not, (26% vs. 20% nationally, just what they need, preDetroit ranks mium golf ) with Learning 4th of the Top 25 & Practice being the most under-represented segment golf markets in at 3% of total holes vs. the the US by number national average of 8% (just what they really need, afof golfers. fordable, entry-level supply). The balance of Value-added golf supply (Private & Public Premium) vs. Value golf (Public Value, Price and Learning & Practice) is 49%/51%, similar to the national average of 51%/49%. Within PublicRegulation golf, the distribution between Premium/Value/ Price is 35%/36%/28%, which is biased toward the upper range (Public-Premium) compared to the national distribution of 30%/42%/27%. Public-Price is fortunately adequately represented among regulation length facilities; it just appears they’ve got an abundance of Premium golf currently. During the “go-go” years of supply development (1990-2000), Detroit fully participated in the build-a-course-a-day mentality, T Private PublicPremium PublicValue PublicPrice Learning & Practice Future Facility Golfer Base – Est. # of Golfers (Ks) – # of 18 Hole Equivalent Facilities – Golfers per 18-Hole Equiv. Supply Mix – Private – Pub-Prem – Pub-Val – Pub-Price – Learn & Prac Detroit, MI Tot US Index vs. US 625.5 26,300 205 14,924 3,059 1,762 23% 26% 27% 21% 3% 26% 20% 28% 18% 8% 174 88 130 96 117 38 41 207 130 98 104 78 88 Supply/Demand Balance 3% 8% – ’00-’10 Cume Supply Growth/Decline –20% –10% – ’00-’10 Cume Rds Demand Growth/ Decline –23% –18% – ’00-’10 Cume Mkt Supply Dilution (-)/Absorption (+) Level* – Avg Ann Rds Velocity (18-hole Equiv.) 27,062 27,745 Rounds & GF Revenue Health – % Utilization Rate – Avg. Ann. Rev. per Public Regulation EHE ($Ks) – Revenue per Available Round (RevpAR) * Period % Chng in Rds vs. Period % Chng in Supply + Inverse index, lower is better 54% $764 $14 52% $983 $16 Above average level vs. US (Index 105+) Average level vs. US (Index 95-104) Below average level vs. US (Index <95) expanding at an annual rate of 2.9% and creating a cumulative supply dilution level of -24%. Since 2000, the change in supply has moderated to a very manageable annual rate of <0.5%, which is in line with the “new normal” of supply expansion APril 2012 16 The Pellucid PersPecTive

Table of Contents for the Digital Edition of The Pellucid Perspective - April 2012

The Pellucid Perspective - April 2012
Golf associations seeking new ways to stem membership decline
Are you the master of your domain?
Military base redevelopment puts golf in limbo
iPad + cloud = simpler, cheaper golf operating system?
March weather impact: Nature’s baffling benevolence continues!
Fore, right! Who’s to blame?
Detroit market holding its own
Course purchase opportunities abounding on Florida’s ‘First Coast’
An uncluttered mind yields Masterful performance

The Pellucid Perspective - April 2012