The Pellucid Perspective - January 2013 - (Page 14)

MARKET FOCUS Goofy had company in Orlando course developers Orlando, FL Core Business Statistical Area (CBSA) T his month we feature our perennial January host market for the PGA Merchandise Show, Orlando, Florida. I had to do a double-take that it doesn’t fall in the Top 25 US Golf Markets and we hadn’t previously featured it in the Market Focus, but it lands in the Top 30 US Golf Markets and just misses Pellucid’s arbitrary “Top” cut. Let’s see how this destination market for fun and family fares in golfers (will be under-represented because we’re just counting locals), rounds (will be more reflective here via facility reporting and counting all rounds, local and imported) and economic strength. By number of golfers, Orlando ranks number 29 of US markets with 178K golfers estimated in the local population (not counting tourists). That golfer base is served by 106 18-hole equivalent (EHE) facilities, producing a ratio of roughly 1.7K golfers per EHE, which is right on the national average. The supply mix vs. the national distribution across Pellucid’s five access/value/usage segments skews meaningfully to Public-Premium (remember though that Pellucid classifications are based on highest, in-season greens fees). On the flip side, Public-Value and Learning & Practice are dramatically underrepresented supply segments vs. the US average. The balance of Value-added golf supply (Private & Public Premium) vs. Value golf (Public Value, Price and Learning & Practice) is 55%/45%, highly more concentrated to the high end vs. the national distribution of 47%/53%. Within Public-Regulation golf, the distribution between Premium/Value/Price is 47%/29%/24%, which also shows a meaningfully higher concentration in the Premium segment at the expense of the Value segment compared to the national distribution of 31%/44%/25%. All in all, the mix of the Public supply types to the higher end suggests that the area needs a reasonable number of moderate-and-upper income consumers (locals and/or tourists) to match that supply. During the “go-go” years of supply development (19902000), Orlando had to have been near the head-of-the-class in the build-a-course-a-day craze, adding 477 holes of golf during the period. Mitigating that 4% annual increase in supply was very robust 3% annual population growth, meaning the market came into the 21st century with a 7% supply “overhang” (compared to the national average which was 10% excess). Since 2000, the change in supply has moderated to half that rate, but is still clipping along at an almost 2% annual rate which continues to be mitigated by solid annual population growth of 3%, twice the national average. (Their homes are still worth a fraction of what they used to be but people just keep on coming). 14 The Pellucid Perspective Private PublicPremium PublicValue PublicPrice Golfer Base – Est. # of Golfers (Ks) – # of 18 Hole Equivalent Facilities – Golfers per 18-Hole Equiv. Orlando, FL Future Facility Tot US Index vs. US 178.3 24,400 106 14,675 1,690 1,663 Supply Mix – Private – Pub-Prem – Pub-Val – Pub-Price – Learn & Prac 102 19% 36% 22% 18% 5% 26% 21% 30% 17% 6% 73 171 73 106 83 21% 8% 8% –10% 276 N/A –14% –17% 78 33.4 26.7 125 43% $1,286 52% $983 83 131 $18 $16 110 Supply/Demand Balance – ’00-’10 Cume Supply Growth/Decline – ’00-’10 Cume Rds Demand Growth/ Decline – ’00-’10 Cume Mkt Supply Dilution (-)/Absorption (+) Level* – Avg Ann Rds Velocity (ks per 18-hole Equiv.) Rounds & GF Revenue Health – % Utilization Rate – Avg. Ann. Rev. per Public Regulation EHE ($Ks) – Revenue per Available Round (RevpAR) Learning & Practice * Period % Chng in Rds vs. Period % Chng in Supply + Inverse index, lower is better Above average level vs. US (Index >105) Average level vs. US (Index 95-104) Below average level vs. US (Index <95) January 2013

Table of Contents for the Digital Edition of The Pellucid Perspective - January 2013

The Pellucid Perspective - January 2013
A Pellucid Preview of the 2012 State of the Industry
Boom times for golf course brokers
Show time: Happy days are here again?
Sharp Park wins
Private owner launches another attack on municipal course tax exemptions
December golf weather impact: 2012 a year for the record books!
Goofy had company in Orlando course developers
Dallas negotiating for construction of new championship course
“Customer co-production” worth looking into for golf

The Pellucid Perspective - January 2013