The Pellucid Perspective - May 2016 - (Page 15)

MARKET FOCUS Motown operators facing uphill but possible climb Detroit, MI Metro 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, supply level and rounds demand. Within that Top 25 universe, we then rank them based on relative health using a Pellucid weighted scoring system of 8 variables ranging from Population Growth to Estimated Profitability-per-Available Round. In this issue, we'll profile the 20th healthiest market, the Detroit Metro Core Business Statistical Area (CBSA). In the city with soul that's making a gritty comeback through a combination of persistence and a federally-managed bankruptcy, it's possible that the local golf operators who have survived the carnage thus far may see the light at the end of the tunnel. I got a small glimpse of the people and landscape of Detroit while participating in a church workcamp experience with Cass Community Services last summer for a week in June. What amazed me was the loyalty of the people to their city and determination to emerge on the other end of the city's darkest hours with their dignity intact through kindness and community. To show that even the golf community is chipping in, we even went out and picked up used chairs from one of the private clubs in the area which had gotten new ones for weddings and events and the owners had agreed to donate 250 of their used chairs for Cass to use for their interdenominational Wednesday night services (that was a lot of chairs to lug). By rounds demand (one of our 3 selection criteria for initial inclusion in the Top 25 list), the Detroit CBSA ranks 11th among US markets with facility-reported annual demand of just over 4.4M rounds (that facility-reported tally counts both local and tourist play). Looking at the golf consumer base, we see that Detroit is home to a healthy local golfer base of roughly 0.6M golfers (ranking 4th in the US, remember this is only local, resident population, doesn't count any tourists that are trickling back to the city). That golfer base is served by a reasonable supply amount of 201 18-hole equivalents (EHE), producing a healthy ratio of roughly 2.9K 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 is fairly well-balanced compared to the US average. The Private vs. Public access balance is 23%/77%, which is similar to 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 47%/53%, which tilts slightly to Value golf Private PublicPremium PublicValue Golfer Base - Est. # of Golfers (Ks) - # of 18 Hole Equivalent Facilities - Golfers per 18-Hole Equiv. PublicPrice Learning & Practice Detroit, MI CBSA Supply Mix - Private - Pub-Prem - Pub-Val - Pub-Price - Learn & Prac 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) (EHE) Rounds & GF Revenue Health - % Utilization Rate - Avg. Ann. Rev. per Public Regulation EHE ($Ks) - Revenue per Available Round (RevpAR) Future Facility Tot US Index vs. US 574.2 22,900 201 14,672 2,857 1,561 183 23% 24% 36% 14% 3% 27% 23% 28% 16% 6% 85 103 129 90 50 4% -12% 9% -12% 43 100 -16% -21% 75 24.2 26.7 91 47% 56% $718 $1,155 $14 $19 84 62 74 * Inverse index, lower is better ** Period % Chng in Rds vs. Period % Chng in Supply Above average level vs. US (Index >105) Average level vs. US (Index 95-104) Below average level vs. US (Index <95) vs. the 50%/50% national distribution. Within Public-Regulation golf, the distribution between Premium/Value/Price is 32%/49%/19% vs. the national picture of 34%/42%/24%, which The Pellucid PersPecTive 15

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

USGA member engagement initiative: A golden opportunity or will the goose get cooked?
Rising tide of third party management good for the industry?
Bogeys become bison, boar and deer at former Ohio course
Path to course performance benchmarking difficult, but not impossible
April golf weather impact; Giving back some of Q1 gains
Motown operators facing uphill but possible climb
From the sublime to the ridiculous

The Pellucid Perspective - May 2016