The Pellucid Perspective - December 2017 - 14

MARKET FOCUS

mium) vs. Value golf (Public-Value, Price and Learning & Practice) is 57%/43% which is also materially skewed to Value-added
vs. the 50%/50% national distribution. Within Public-Regulation golf, the distribution between Premium/Value/Price is
24%/48%/28% vs. the national picture of 34%/42%/24% which
shows that the Public-access regulation supply tends to cluster
in the middle range vs. the US benchmark (48% vs. 42% nationally) and we see that the Public-Premium supply is depressed,
likely as a result of the plethora of Private golf and a wide variety
of membership models (like Canongate). Remember that in this
particular analysis Pellucid allows the definitions of Premium/

14 The Pellucid PersPecTive

Value/Price to "float" across each of the markets driven by the
local market price spectrum, so the absolute price of golf isn't
necessarily revealed by a balanced distribution (i.e. Value golf
could still be expensive in the absolute).
During the "go-go" years of supply development (19902000), Atlanta was at the vanguard of the "build a course a
day" craze, increasing supply at an annual rate of ~5% (compared to the (unreasonable) US average of >2%, beating that
handily). Working to slightly offset this was healthy annual
population growth (~3% annually during that period). Using
our pre-2000 calculation for supply dilution/absorption (supply change vs. population change), we
estimate that the market was at ~15%
dilution at the turn of the century vs.
the 1990 benchmark (slightly above
the US average of 11% "overhang").
Since 2000, the annual rate of supply
growth has throttled back significantly
(~1%) while the population growth
rate has moderated to roughly 2x the
national average rate of ~1%. A better available metric however for supply
dilution/absorption in the post-2000
period (because we have semi-accurate
facility-reported rounds figures at state
and market level) is comparing supply
growth to the changes in rounds demand. Since 2000, the market has experienced a slight decline in the annual
rounds demand rate (<1% similar to the
national average of -1% annually) so
we're actually showing increased supply dilution of ~22% during the '00-'13
period. Combining the '90-'00 decade
dilution rate and the '00-'13 period results, the average facility in the market
is ~37% worse off than they were at the
'90 benchmark (slightly higher than the
national rate of -33% supply dilution
for that same '90-'13 period). Given
that current "reality," the market has a
considerable uphill battle to either dramatically reduce supply or find a way to
grow rounds demand annually at 2%+
in order to get out of this acute oversupply situation (likely including either
take out or public conversion of a significant number of Private facilities).
The average facility has throughput
of roughly 21K rds/yr, lower than the
national average before factoring in climate and daylight influences (heavily
and artificially influenced by the heavy
Private club supply weighting). The
more accurate measure is the market's
29% Utilization Rate which signifiDecember 2017

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