The Pellucid Perspective - August 2013 - (Page 4)

GOLF OPERATIONS 2013 mid-year review: Anyone get the license plate of that truck? By Jim Koppenhaver A s I compiled the June Year-to-Date (YtD) rounds, revenue and rates information for the By-the-Numbers section of this month’s edition, I wondered if the sea of red numbers was solely due to last year’s phenomenal results (relative to an unusual benchmark year) or whether they were unusually low even compared to a longer-term “norm.” While most of you know that I’m not a die-hard fan of PerformanceTrak when it comes to precision, it does give us the ability which we didn’t possess pre-2005 to answer questions like this about longer-term trends and averages. So, armed with access to their historical Rounds and Greens Fee Revenue figures back to 2009 for the June YtD period, I set out looking for an answer. Not to toot our own horn (too much), in the 2012 State of the Industry which Stuart Lindsay and I delivered in Orlando back in January, we gave fair warning to those in attendance and who bought the report that 2012 was an anomaly in weather terms, both in the absolute and relative to longer-term averages. We cautioned those who would listen that planning the 2013 season off anything resembling the 2012 results would be a fool’s errand. While acknowledging the vagaries and relative accuracy of long-term weather forecasts, we outlined our case for the fact that favorable weather likely contributed a roughly 8% boost vs. 2011 and was near-record even over an extended period of time. This was quantitatively supported by the fact that 2012 was roughly 5% above the 9-year average (’04-’12). Our 2013 forecast at the national level was an 8% decline in Golf Playable Hours (GPH), which would put us back to the 2011 level and, coincidentally, back below the long-term average. It turns out that the 2013 performance is actually even slightly worse than that prediction, based on looking at the weather trends and the rounds and revenue performance through the first six months of the year. The table (opposite page) outlines the “tale of the tape” in trying to get the license plate of that truck which has run over the golf industry through the first six months of 2013. Setting up the chart, here is the structure and the key dimensions: • The upper chart is tracking historical Rounds trends for the June YtD period for each of the years from 20092013. The lower chart is the same treatment for the measure Median Greens Fee Revenue over the same period. • We’ve captured the values both for All Facilities as well as for the Facility types as broken out by PerformanceTrak. As it turns out, there’s not significant differences among the facility types on the Rounds measure but I had already constructed the chart so you get the benefit of seeing this level of detail because I was too lazy to edit it. • Out to the right we created comparisons of the June 2012 YtD values against both Year-Ago (YA) and the 4-yr Avg (’09-’12). What we were trying to determine is if the 2013 performance was really “on norm” or even uglier. The simple answer to the question is, “2013’s results through June are way down vs. an abnormal 2012 but also down more than anticipated vs. the long-term average.” Let’s see what the support is for that statement. On the rounds front at the All Facilities level (line called Tot. Rds YtD at the top of the first set of numbers), you can see that, for the Median rounds played at 11.4K, we’re trailing 2012 by roughly 11%. You can also see in the far-right column that this is also roughly 6% below the 4-yr average. What’s interesting looking at the timeseries of values for ’09-’11, the 11.4K value through June in 2013 is actually not a bad comparative value. We have to consider, however, that the 2009-2011 period was one of continuous decline, so that’s why we included the 2012 results to offset that trend. On the rounds front, you can see by going down the table through the various facility types the general trend is that 2013 is roughly 10% below 2012 and 5% below the 4-yr average. So, rounds results for this year are both relatively low (compared to last year) and absolutely low (compared to the average). Recall that Pellucid had forecast that 2013 would be 8% below 2012 on weather, which would also put it about 3% below the long-term average. In other words, While most of you know that I’m not a die-hard fan of PerformanceTrak when it comes to precision, it does give us the ability which we didn’t possess pre-2005 to answer questions like this about longer-term trends and averages. 4 The Pellucid PersPecTive August 2013

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

The Pellucid Perspective - August 2013
Contents
Say good-bye to Ladies Day?
2013 mid-year review: Anyone get the license place of that truck?
The true cost of barter
Snowboarding is to skiing as ??? is to golf
New private club buyer/investor emerges
Skybrook Golf Club, Charlotte Golf Links owe millions, placed in receivership
July golf weather impact: Finally, a weather-favorable month vs. ’12
Finding golfers no circus act in Sarasota
Random shots

The Pellucid Perspective - August 2013