The Pellucid Perspective - May 2017 - 12

MARKET FOCUS

Operators haven't lost heart in San Francisco

or our new readers, in this section we profile one of the Top
25 US Golf Markets (based on a 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 #4 healthiest market, the San Francisco-Oakland Metro Core Business Statistical
Area (CBSA).
I'm actually in San Francisco as I write this column this
month (looking out the window on Pine Street in the Nob Hill
district) and it's a very golf playable 60 degrees and brilliantly
sunny. As local golfers know however, the micro climates here
make predicting the weather and scheduling golf a challenge that
they know and embrace.
By rounds demand (one of our 3 selection criteria for initial
inclusion in the Top 25 list), San Francisco ranks 19th among US
markets with facility-reported annual demand of just under 3.5M
rounds (that facility-reported tally counts both local and tourist
play). Looking at the golf consumer base, we see that San Francisco is home to a relatively healthy local golfer base of roughly
391K golfers (this is only local, resident population, doesn't count
the tourism crowd). That golfer base is served by a relatively scant
supply amount of 86 18-hole equivalent (EHE) facilities, producing an average ratio of nearly 5K local resident golfers per EHE,
well above the national average, which isn't surprising given that
we have fairly high population density crammed into the limited
land area while there's no way to "compress" golf proportionately
to the space available.
The supply mix vs. the national distribution across Pellucid's
five access/value/usage segments shows a strong primary bias to
Private at 39% of total holes compared to the national average
of 27%. Also of interest is a healthy presence of Public-Price
to somewhat counterbalance that at 20% of supply vs. the national average of 16%. The balance of Value-added golf supply
(Private & Public Premium) vs. Value golf (Public Value, Price
and Learning & Practice) is 55%/45% vs. the national average of
50%/50%, meaning that the market shows a meaningful skew to
Value-added.(This is driven by the high incidence of Private vs.
the national average). Within Public-Regulation golf, the distribution between Premium/Value/Price is 27%/36%/36% vs. the
national picture of 34%/42%/24% which highlights the somewhat paradoxical skew toward Price golf in one of the highestpriced markets for cost-of-living and consumer goods & services
in the country. That said, remember that Pellucid allows the
definitions of Premium/Value/Price to "float" driven by the local
market price spectrum so the skew to Price golf only means that
there's good supply of relatively affordable golf to the public.
During the "go-go" years of supply development (1990-2000),
the San Francisco CBSA was a slight laggard in the "build a
course a day" craze (annual (unsustainable) supply growth of
~2%) by adding holes at a Compound Annual Growth Rate
(CAGR) of ~1.5%. (Where did they find affordable land, one

12 The Pellucid PersPecTive

Private

PublicPremium

PublicValue

PublicPrice

Learning
& Practice

San Francisco,
CA CBSA

Golfer Base
- Est. # of Golfers (Ks)
- # of 18 Hole Equivalent Facilities
- Golfers per 18-Hole Equiv.
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

390.5 23,400
82 14,672
4,762 1,595

299

39%
15%
20%
20%
7%

27%
23%
28%
16%
6%

144
65
71
125
117

9%
1%

9%
-12%

100
N/A

-8%

-21%

N/A

37.4

33.8

111

46%
56%
$2,118 $1,155
$26
$19

82
183
137

* 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)

wonders?). They weren't as crazy as one would think though as
annual population growth trailed that only slightly (~1), meaning that theoretically they entered the new century with relatively
low supply dilution (~3%) relative to the 1990 benchmark. Since
2000, the rate of supply growth has throttled back to half its former level while population growth has continued apace. A betMay 2017

Table of Contents for the Digital Edition of The Pellucid Perspective - May 2017