The Pellucid Perspective - April 2016 - (Page 2)

GOLF COURSE BENCHMARKING In search of meaningful operations performance measurement By Stuart Lindsay T he PGA of America has thrown in the towel on PerformanceTrak and it will be missed. Pellucid has used it a a reference point since its inception and we have actively encouraged our clients and State of the Industry attendees to participate. Despite our efforts and PGA encouragement, reporting was declining and the shrinking sample size and make-up was making the data less accurate. We applaud the PGA's reluctance to put out inaccurate information, but they also could have tried to fix the problem before they discontinued it - there are a lot of PGA Professionals who have used that information for both self-assessment and data to provide performance measurement information to their Boards and owners. If we understand correctly, the historical PerformanceTrak data has been turned over to Golf Datatech and the NGCOA, so at least the data still exists. It is also our understanding that the NGCOA is very interested in trying to build a replacement system/service. There are also a couple of other industry veterans who are trying to create "benchmarking" platforms. Virtually all of these discussions start with a reference to the Smith Travel (STR) benchmarking service in the hotel industry. First, the basic STAR Report data of Average Daily Rate (ADR) and Revenue per Available Room (RevPAR) started out being "free" to any hotel that supplied their data. In addition, their ADR and RevPAR are then compared to other hotels in their price range by geographic area. This is similar to the valuable function Golf Datatech has provided on Rounds since 1999, but Rounds only tell us how many "room nights" we sold and that is not nearly as meaningful as the revenue those rounds generated. The STAR Report input is simple - all a hotel has to do is put in a room night sold and revenue number and provide monthly data to get a basic comparion of their own performance. There is a third number for "room nights available," but that is a relatively static number unless rooms are being renovated or otherwise not available. Hotels can upgrade to purchase more detailed benchmarking and other analytic data, such as picking a competitive set of local properties or measuring against similar "class" properties. Calculating ADR and RevPar are simple for hotels. A 100 room hotel has 36,500 available room nights. If they sold 29,200 rooms and their revenue is $2,000,000, the ADR is $68.50 and RevPar is $54.80. The STAR Report then shows them a com- parison with their own history and benchmarks them against their selected peer group. The market and competitive benchmarks are available for about $700 per year. There are further refinements and features that can cost more, but the basic STAR Report is very comprehensive. The STAR Report has become so well accepted that many hotel flagship brands require their operators to provide the data and provide the reports on each hotel operation. The STAR Report is also the "holy grail" for commercial real estate lenders and appraisers. Golf is not quite as simple. Not everybody sets up their Tee Sheet the same way and weather conditions impact capacity as well - not just temperature and rain, but different daylight hours and season length. Calculating the Weather Adjusted Capacity (WAC) involves looking at a lot of hourly weather data, both for a current time period and for a certain number of past periods to create historical comparisons. Creating a 3 year window requires looking at 8,760 hours in each year or 26,280 for the 3 year window. You also need "rules" to determine which hours are "playable" and apply those rules consistently 26,280 times. Then you need to decide how the Tee Sheet is set up. The only real way to do that is to make adjustments for starting time (varied by daylight changes) and the time to stop scheduling starts, again varied by daylight. Most courses set up their tee sheets at the beginning of the year and don't adjust for daylight. By definition, this makes most POS generated utilization reports meaningless or worse. Many courses run "spring specials" based on what looks like low utilization - after adjustment for daylight and weather variables, spring use is actually much higher. The complex set of calculations above is where golf benchmarking usually hits a roadblock. PerformanceTrak tried "days open," which sort of works except that a "playable day" in Miami has 8 hours and 40 minutes of playable daylight per annual season day and Minneapolis has over 11hours. I could go on, but "days open" isn't very accurate - especially in aggregated data that golf courses try to bring down to a local level. So first, we have to find a better solution for calculating individual Weather Adjusted Capacity for every participating golf course. Second, a golf course needs to be able to determine the courses they want to be compared to. Is that done by price, slope rating, simple proximity or any of some other criteria? Most golf courses If we understand correctly, the historical PerformanceTrak data has been turned over to Golf Datatech and the NGCOA, so at least the data still exists. 2 The Pellucid PersPecTive April 2016

Table of Contents for the Digital Edition of The Pellucid Perspective - April 2016

The Pellucid Perspective - April 2016
In search of meaningful operations performance measurement
We have a data problem in golf. Let’s fix it
EZLinks Golf expands customer base, technology resources with IBS acquisition
Devote article
On the scene in Myrtle Beach: Owners lighting candles vs. cursing the darkness
March weather impact: Strong first quarter finish, mixed by geography
Sadly for operators, MLB team not the only “reds” in Cincinnati golf market
Golf ’s use of the President - a whiff or a stiff?

The Pellucid Perspective - April 2016