The Pellucid Perspective - June 2015 - (Page 11)

GoLF participation What's right with golf? By Stuart Lindsay F or those of you who perceive Pellucid as the bearer of bad news about the industry's current health, you may be pleasantly surprised to discover that we have found some rays of sunshine about what is, after all, a wonderful sport and an interesting, if challenging, industry. For instance: * Pellucid client course sets customer retention record * Florida population growth projected to increase golf demand * Private Club activity expands * Millenial survey results are surprising The recent golf participation statistics from the National Sporting Goods Association are not pretty. When Jim Koppenhaver sent me the latest dissection of the NSGA survey data, he sent them with a warning of the grisly details of another million golfers lost and stagnant frequency. These bad statistics have engendered another annual debate over whether golf is dying or not. That's not the right debate - golf may be wounded, and the wounds may look really bloody, but the injuries themselves are not life threatening. We have to remember that golf was prospering in the early 1960s with 5 million golfers that represented only 3% of the US population. Even our diminished participation rate of today is more than double what it was in 1961. It should also be remembered that golf had a building boom in the 1960s that took more than a decade to correct. In fact, some of our recent projects and other casual observations have indicated that some success is being had in the golf industry in spite of the overall conditions. Let's start with a customer data dissection we did for a suburban Chicago course. When we looked at how many high value customers created the first 60% of their revenues in 2013, 90% of those customers came back in 2014. In the 12 years we have been doing these analyses on literally hundreds of courses, that's the highest we have ever seen. In another project, we are helping to project the future demand for golf facilities in a large area in Florida. Population growth rates are going to be a lot higher than in the U.S., and another 15 years of retiring, relatively affluent baby boomers are likely to mean healthy demand for golf. This trend is being played out at the sprawling Lakewood Ranch development near Sarasota. A new private club opened in 2014 and two more courses are being developed by Del Webb/ Pulte on the Lakewood property with scheduled openings in the next 24 months. In the large 16 county area we studied, only 4 new courses opened in the five years 2010 - 2015 including the private club at Lakewood Ranch. Further indications of returning golf health are witnessed in a strengthening of member rolls and initiation fees in a number of Florida markets. Waiting lists to get in are replacing the old waiting lists to get out at many clubs in Naples, Palm Beach and Sarasota. I don't usually use my own private experiences to color my re- search, but even this crusty (GolfWeek's assessment, not mine) observer couldn't help but notice a flurry of activity at my own club this past weekend. As we were on a neighboring hole, we couldn't help but notice the group of Ricky Fowler/Rory McElroy/Jordan Spieth look-a-like kids starting their PGA Junior League matches. As we came around a half hour later, there were two young families on the course following the PGA Junior players. In addition, as I was leaving there were 8 couples getting ready to go out for an impromptu evening of hit and giggle. Yes, the beverage holders were full and there was a lack of seriousness indicated by some of the romantic wagers being made; but they all looked like they were going to have fun. At least until one of the husbands negated his hopes of a favorable evening by putting his wife in a bunker off the first tee. I should also note that I had fun playing with 11 of my frequent companions - the golf was mostly bad, but the heckling and jokes were hilarious. I also had trouble finding a parking spot when I arrived and the lot was more than half full when I left. And then there are the Millenials. For those of you who didn't attend or buy our State of the Industry report, we spent some time discussing the Golf Digest survey of that age group published in the July 2014 issue. Here are a couple key takeaways from that discussion: * They try to play by the rules and an important part of their enjoyment is derived from that attempt. * They want to look like golfers - they don't mind dress codes as much as we think they do. * Time and money are issues; but when they do have the time and money, they consider golf a "special occasion." When we look for commonality and maybe a little guidance in these examples of success; there are a few indicators that our collective "grow the game" initiatives and operational standards need some tweaking. Our Chicago client course successfully tied 95.8% of their revenues back to individual customers. This allowed them better communication and recognition of customers with the net result of outstanding customer retention. Part of it is the software assistance they get, but most of it is staff training and an insistence on customer identification and using their software features to greet the golfer as a returning customer. Anybody who tells you customer recognition is not a component of overall experience "value" doesn't understand the hospitality business. Our Florida golf demand work tells us that the migration of golfers/retirees will far outweigh the high Hispanic population growth that impacts golf participation in Florida and the U.S. as a whole. It also confirms that golf courses need to address the needs of golfers who are 55+ in order to reap the benefits of what should be a significant growth in golf demand. We would add that this is true virtually everywhere as a higher and higher (See Golf Participation on page 16) The Pellucid PersPecTive 11

Table of Contents for the Digital Edition of The Pellucid Perspective - June 2015

PGA Tour/EZLinks-backed site challenges GolfNow
Municipal golf property tax exemption affirmed by Ohio Supreme Court
California course owners adapt to new water cutbacks
Reinventing vs. Reinvesting
Golf participation in 2020: Two “educated guesses,” you pick
What’s right with golf?
May golf weather impact: Starting the full season in “neutral”
Dallas: Room for improvement in Big D P&L
NGCOA facing a critical leadership decision

The Pellucid Perspective - June 2015