The Pellucid Perspective - June 2015 - (Page 15)

Room for improvement in Big D P&L Dallas TX Core Business Statistical Area (CBSA) I n this monthly section, we profile one of the Top 25 US Golf Markets (based on a Pellucid composite score of the golfer base, the supply level and rounds demand). Within that Top 25 universe, we then rank them based on relative health using a Pellucid weighted scoring system on 8 variables ranging from Population Growth to Estimated Profitability-per-Available Round. In this issue, we'll profile the 10th healthiest market, the Dallas TX Metro Core Business Statistical Area (CBSA). In a freak-of-nature timing coincidence with all the rain and flooding in Texas, Dallas came up on our countdown for the Market Focus this month. As mentioned in the Weather Impact section of this magazine, we actually traveled to the Great State of Texas recently and were able to see from the air and the freeways the considerable amount of residual water with which the local population and golf operators are having to contend. One of (few) humorous images was a sign on one of the streets that read, "Public boat launch closed due to high water." (That's when you know this is a once-in-a-decade or longer event). On Lake Lewis, ironically they had just completed extending many of the boat docks to reach the receded water line and had extended several of the beaches also to get to water. Those are all now obviously sub-marine features. Our thoughts and prayers go out to all those families and businesses in the larger area which were impacted, suffered damage and are now having to rebuild. On the brighter side, after they emerge from this, there won't be drought conditions for a little while, given the replenishment provided by the heavens. By rounds demand (one of our 3 selection criteria for initial inclusion in the Top 25 list), Dallas ranks 12th among US markets with facility-reported annual demand of just over 5M rounds. (That facility-reported tally counts both local and tourist play). Looking at the golf consumer base, we see that Dallas is home to a relatively healthy local golfer base of roughly 445K golfers (9th ranking, remember this is only local, resident population, doesn't count the tourism crowd). That golfer base is served by a healthy supply amount of 168 18-hole equivalents (EHE) producing an average ratio of roughly 2.7K local resident golfers per EHE, well above the national average. The supply mix vs. the national distribution across Pellucid's five access/value/usage segments skews significantly to Private at 39% of total holes compared to the national average of 27%. (Remember though that Private in Dallas includes a healthy amount of what is basically closed-membership, prepaid golf, not necessarily private clubs with pristine ranges and fine dining). The Private vs. Public access balance is 39%/61%, considerably skewed to Private vs. the national average of 27%/73%. The balance of Value-added golf supply (Private & Public-Premium) vs. Value golf (Public-Value, Price and Learning & Practice) is 58%/42% which is also meaningfully skewed to the Value-added Private PublicPremium PublicValue PublicPrice Golfer Base - Est. # of Golfers (Ks) - # of 18 Hole Equivalent Facilities - Golfers per 18-Hole Equiv. Learning & Practice Tot US Index vs. US 444.6 22,900 168 14,672 2,654 1,561 170 Dallas, TX CBSA Supply Mix - Private - Pub-Prem - Pub-Val - Pub-Price - Learn & Prac 39% 19% 26% 14% 3% 27% 23% 28% 16% 6% 143 82 93 86 50 13% -9% 9% -12% 143 78 -22% -21% 106 28.6 33.8 85 44% 56% $1,072.8 $1,155 $16 $19 79 93 84 Supply/Demand Balance - '00-'13 Cume Supply Growth/Decline - '00-'13 Cume Rds Demand Growth/ Decline - '00-'13 Cume Mkt Supply Dilution (-)/Absorption (+) Level* - Avg Ann Rds Velocity (Ks per 18-hole vs. ks) Rounds & GF Revenue Health - % Utilization Rate - Avg. Ann. Rev. per Public Regulation EHE ($Ks) - Revenue per Available Round (RevpAR) Future Facility * 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) cation vs. the 50%/50% national distribution. Within PublicRegulation golf, the distribution between Premium/Value/Price is 32%/44%/23% vs. the national picture of 34%/42%/24% is surprisingly balanced within the Public-Regulation universe. The Pellucid PersPecTive 15

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