The Pellucid Perspective - December 2017 - 15

cantly lags the Top 25 US Golf Markets'
average (56%). This means that, after
factoring in the benefit of an extended
season, the market's average golf "factory"
runs at lower throughput vs. its Top 25
US Golf Markets peer group. On the
annual Golf Fees Revenue productivity
side, the market generates roughly $0.8M
per public regulation-length EHE which
also trails the Top 25 Markets average. As we move down the waterfall of
health metrics, there's no silver lining
ending with the market's Greens Fee
Revenue per Available Round (RevpAR
= Greens Fee Revenue/Available (Capacity) Rounds) registering $10, significantly underperforming the Top 25 Markets' average of $19 (remember however
that all the revenue figures are based on
calculations off the highest Weekend
Green Fee and don't factor in the mix
of weekend/weekday play or the effect
of discounting present in the market, so
actual mileage across markets will vary).

As a final new measure for the Top 25,
the Golf Fee Profit-per-Available Round
estimate (designed to equalize the equation when comparing high cost-of-living
markets to more reasonable ones) is $2,
which is well below the national average
of $9 (so either a higher cost-of-living
factor or the extended season conspire to
erode this final measure vs. the US average). For more detail on what this means
and how it's calculated, see Jim's article
in the October '14 Perspective edition (or
send us an email at jimk@pellucidcorp.
com and we'll fill in the blanks).
In summary, Atlanta has some favorable indicators as it relates to the golfer
base, the ratio of golfers to supply and
continuing healthy population growth.
On the other side of the ledger, the significant supply acceleration from '90-'10
courtesy of the local real estate developers
and the imbalance to Private supply will
be challenging to reconcile at any time in
the near future. Given the national "take

out" rate of <1%/yr, if Atlanta mirrors
that pace it will be decades before we see
a return to supply/demand equilibrium in
this market. On the other hand, the fact
that Canongate was able to take a disparate stable of local courses and turn them
into enough of a force to be an attractive acquisition for a major management
company suggests that operators can play
a winning game within the relatively ugly
golf market macro economy. In our opinion, if you're an existing operator you've
got a tough decision on whether to hang
in there or look for the exits. For purchasers, you'll have to get a steep discount
on the fundamentals (Net Income Multiplier etc.) to offset the inherent risk and
likelihood of failure outlined in the above
numbers. Unless you're in love with the
southern charm, peaches, Vidalia onions
or have "family and money" (emphasis on
the latter) in Hotlanta, there are easier
places to make money in golf currently
and likely in the near future.
n

"Clear Solutions to
Golf 's Business Issues"

Visit our website and register for more information and free sample reports at www.pellucidcorp.com.
Or, contact Jim Koppenhaver to discuss your unique needs at jimk@pellucidcorp.com or 847.808.7651
(See Hispanic Golf on page 14)
www.PellucidCorp.com

The Pellucid PersPecTive

15


http://www.pellucidcorp.com http://www.PellucidcorP.com

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

TOC
USGA slips bonds of reality with latest thinking on ball regulations
Course closures can be mythbusting
Storied desert club charts new course
November golf weather impact: Double-digit drop, year sags slightly
Atlanta golf market conditions far from peachy
Shark Experience unlikely to break golf ’s chains
The Pellucid Perspective - December 2017 - TOC
The Pellucid Perspective - December 2017 - USGA slips bonds of reality with latest thinking on ball regulations
The Pellucid Perspective - December 2017 - 3
The Pellucid Perspective - December 2017 - 4
The Pellucid Perspective - December 2017 - Course closures can be mythbusting
The Pellucid Perspective - December 2017 - 6
The Pellucid Perspective - December 2017 - Storied desert club charts new course
The Pellucid Perspective - December 2017 - 8
The Pellucid Perspective - December 2017 - 9
The Pellucid Perspective - December 2017 - November golf weather impact: Double-digit drop, year sags slightly
The Pellucid Perspective - December 2017 - 11
The Pellucid Perspective - December 2017 - 12
The Pellucid Perspective - December 2017 - Atlanta golf market conditions far from peachy
The Pellucid Perspective - December 2017 - 14
The Pellucid Perspective - December 2017 - 15
The Pellucid Perspective - December 2017 - Shark Experience unlikely to break golf ’s chains
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