The Pellucid Perspective - February 2018 - 13

MARKET FOCUS

Chicago operators still need broad shoulders
...and better marketing
Chicago IL 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, 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 17th healthiest market, the
Chicago IL Metro Core Business Statistical Area (CBSA).
Given that Chicago is Pellucid's "home market," we're not a
disinterested 3rd party in analyzing and assessing the strengths
and opportunities for one of the largest golf markets in the
northern US. Over the years we've done a considerable number of studies here for a balanced clientele of public portfolios
as well as privately-owned and/or operated facilities in the "2nd
city." Much like most US markets, Chicago operators are having to fiercely compete for "share of golfer/play" as we continue
to slowly work off supply excesses of the early 2000s as well as a
gradual decline in demand of ~1%/yr since the turn of the century. We are seeing a modest return to pricing power in the local
market which is helping offset the rounds bleed, and discounting
practices are being reset in fits and starts to a generally lower level
than the '10-'15 years. So, on the operator's side, on to the question of whether this is a good, neutral or challenging market in
which to make your living in golf.
By rounds demand (one of our 3 selection criteria for initial inclusion in the Top 25 list), the Chicago CBSA ranks 2nd
among US markets with facility-reported annual demand of just
over 9M rounds (that facility-reported tally counts both local and
tourist play). Looking at the golf consumer base, we see that
Chicago is home to a healthy local golfer base of roughly 1.1M
golfers (ranking 3rd in the US, remember this is only local, resident population, doesn't count the tourist crowd). That golfer
base is served by a reasonable supply amount of 341 18-hole
equivalents (EHE, wow!) producing a healthy ratio of roughly
3.3K local resident golfers per EHE, over double the national
average.
The supply mix vs. the national distribution across Pellucid's
five access/value/usage segments skews slightly to Private at 30%
of total holes compared to the national average of 27%. The
Private vs. Public access balance is 30%/70%, not differing materially from 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 52%/48%,
which again is not materially different vs. the 50%/50% national
distribution. Within Public-Regulation golf, the distribution
between Premium/Value/Price is 35%/45%/20% vs. the national
picture of 34%/42%/24% which shows that the Public-access
regulation supply skews slightly toward the higher-priced end vs.
www.PellucidCorp.com

Private

PublicPremium

PublicValue

PublicPrice

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

Learning
& Practice

Chicago, IL
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

1,142 22,900
341 14,672
3,349 1,561

215

30%
22%
28%
13%
6%

27%
23%
28%
16%
6%

113
97
102
80
100

5%
-21%

9%
-12%

57
178

-26%

-21%

125

24.5

26.7

92

48%
56%
$1,079 $1,155
$21
$19

86
93
111

* 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)

the US benchmark (80% is Premium/Value vs. 76% nationally).
Remember that in this particular analysis Pellucid allows the
definitions of Premium/Value/Price to "float" across each of the
markets driven by the local market price spectrum so the absolute
The Pellucid PersPecTive

13


http://www.PellucidcorP.com

Table of Contents for the Digital Edition of The Pellucid Perspective - February 2018

TOC
Is TopGolf going to save us II? Virtual golf becoming a reality
Can you spell API?
January golf weather impact: Brutal, Dude!
Chicago operators still need broad shoulders...and better marketing
Technically speaking, it’s show time
The Pellucid Perspective - February 2018 - TOC
The Pellucid Perspective - February 2018 - Is TopGolf going to save us II? Virtual golf becoming a reality
The Pellucid Perspective - February 2018 - 3
The Pellucid Perspective - February 2018 - 4
The Pellucid Perspective - February 2018 - 5
The Pellucid Perspective - February 2018 - Can you spell API?
The Pellucid Perspective - February 2018 - 7
The Pellucid Perspective - February 2018 - 8
The Pellucid Perspective - February 2018 - 9
The Pellucid Perspective - February 2018 - January golf weather impact: Brutal, Dude!
The Pellucid Perspective - February 2018 - 11
The Pellucid Perspective - February 2018 - 12
The Pellucid Perspective - February 2018 - Chicago operators still need broad shoulders...and better marketing
The Pellucid Perspective - February 2018 - 14
The Pellucid Perspective - February 2018 - Technically speaking, it’s show time
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