The Pellucid Perspective - October 2013 - (Page 13)

MARKET FOCUS Established SF courses leap-frog larger markets San Francisco, CA Core Business Statistical Area (CBSA) C ontinuing our sequential series of profiling the healthiest Top 25 US Golf Markets as quantified and ranked by Pellucid using a 10-measure composite scoring system (things like population size/growth, golfer base, rounds generation, supply/demand balance, utilization and RevpAR), this month we highlight the 6th healthiest golf market in the country, San Francisco. Where else but San Francisco could you have a serious legal debate over closing a municipal facility that’s making money because it’s perceived to be doing some harm to the habitat of a red-legged frog and a state indigenous garter snake? Making things even more interesting, the contested land apparently wasn’t even hospitable for said frogs until the golf course was built, so the story is destined to be the stuff of “urban legend” or, put another way, “Man bites frog.” But we digress… By rounds demand (our selection criteria for market inclusion in the Top 25 list), San Francisco ranks number 19 of US markets with facility-reported annual demand of just under 3.5M rounds (constrained somewhat by the landlocked nature of the market and the prohibitive cost of land). Looking at the golf consumer base, we see that San Francisco is home to an abundant local golfer base of 0.4M golfers. (This is only local, resident population, doesn’t count all the tourists who pass through and plunk down their money to play Harding Park and other destination tracks). That golfer base is served by a relatively sparse 82 18-hole equivalent (EHE) facilities, producing a stellar ratio of 4.6K golfers per EHE which is nearly 3x the national average. The supply mix vs. the national distribution across Pellucid’s five access/value/usage segments shows a clear bias to the Private segment at 39% of holes vs. the 27% national average. Interestingly, there’s also a slight skew to affordable, entry-level golf evidenced by the 100+ indices for Public-Value and Learning & Practice facilities. The balance of Value-added golf supply (Private & Public Premium) vs. Value golf (Public Value, Price and Learning & Practice) is 54%/46%, which is slightly higher than the national average of a 50%/50% split. Within Public-Regulation golf, the distribution between Premium/ Value/Price is 27%/36%/36%, which represents a strong bias to Price, compared to the national distribution of 34%/42%/24%. (One has to consider that our price segments are market-specific so “Price” in San Francisco in the absolute range stretches all the way up to $59). During the “go-go” years of supply development (19902000), San Francisco never fully caught the build-a-coursea-day wave (in most part due to the inhibiting factor of land Private PublicPremium PublicValue PublicPrice Learning & Practice San Francisco, CA CBSA Future Facility Supply Mix – Private – Pub-Prem – Pub-Val – Pub-Price – Learn & Prac Tot US Index vs. US 379.2 24,400 82 14,675 4,624 1,663 Golfer Base – Est. # of Golfers (Ks) – # of 18 Hole Equivalent Facilities – Golfers per 18-Hole Equiv. 278 39% 15% 20% 20% 7% 27% 23% 28% 16% 6% 144 65 71 125 117 9% –15% 3% –15% 267 100 –24% –19% 129 37.5 26.7 140 54% $2,110 44% $836 123 252 $22 $11 200 Supply/Demand Balance – ’00-’11 Cume Supply Growth/Decline – ’00-’11 Cume Rds Demand Growth/ Decline – ’00-’11 Cume Mkt Supply Dilution (-)/Absorption (+) Level* – Avg Ann Rds Velocity (ks per 18-hole Equiv.) Rounds & GF Revenue Health – % Utilization Rate – Avg. Ann. Rev. per Public Regulation EHE ($Ks) – Revenue per Available Round (RevpAR) * 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) The Pellucid PersPecTive 13 http://WWW.PELLUCIDCORP.COM

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

The Pellucid Perspective - October 2013
Are golf ’s nonprofit “emperors” fiddling while Rome burns?
Seniors in their golden years, but are you?
A new determinant on “weather” golfers play or not?
Golf needs a voice in the regulatory process
September golf weather impact: Positive month caps positive Q3
Established SF courses leap-frog larger markets
ClubCorp IPO shares priced lower than expected at opening, rise 10% in debut
The show must go on

The Pellucid Perspective - October 2013