The Pellucid Perspective - July 2020 - 15

ferences in cost of living/cost of golf as we cross markets (unlike
NGF where Manhattan NY has the same price segmentation as
Manhattan KS, go figure). Within Public-Regulation golf, the
distribution between Premium/Value/Price is 38%/41%/21%
which is skewed to Public-Premium (at the expense of PublicValue) vs. the national picture of 31%/47%/23%.
Using our new methodology for calculating Supply/Demand equilibrium and how the picture has changed from '00'17 based on rounds demand change vs. supply change, you
can see in the table above that Supply expanded 7% over that
period, lower than the national average of 11% (a Compound
Annual Change Rate (CACR) of roughly 0.6%). On the facility-reported rounds demand side of
the equilibrium equation, that supply
expansion is juxtaposed to a rounds
demand decline of 20% over the '00'17 period (nearly 3x the national rate
of decline, wow!). The confluence of
these two factors results in the cumulative supply dilution resting at -27% or
meaningfully higher than the national
benchmark of -17% (some have suggest
that, since it's Pellucid's home market,
we ought to be single-handedly leading
the crusade to clean up our act, ha, ha).
This suggests that 100 facilities could
disappear next week in Chicago and the
market wouldn't likely miss a beat.
Despite that, the average EHE has
a healthy throughput of ~24K rds/yr
which is slightly below the national average. Factoring in weather and daylight, the more accurate measure is the
market's 44% Utilization Rate which
slightly bests the national average
(42%). Hence, after neutralizing the
weather impact of a moderate-length
season, the market's average golf "factory" runs at slightly higher throughput
than the average US course (despite being inhospitable to reasonable golf conditions for 5 months annually).
In summary, the primary contributors to Chicago's Top 20 standing are its
golfer base (number of golfers and Play
Rate) Revenue per Available Round
(RevpAR, driven by both above average Utilization and Rate-per-Played
Round). The "downers" are population
growth is lagging and, for some reason,
that healthy golfer base can't be coerced
into playing more rounds annually
(given what I see as a consumer in the
market, at least in the NW Suburbs, it's
not surprising). Affordable golf also
isn't one of the hallmarks of Chicago
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but, if you play at off hours and take advantage of resident rates
at your local muni, you can find affordable places where you
can usually also play relatively quickly (Sunday twilight is my
favorite 90 min. 9 holes walking solo venue). Like most of the
rest of US markets, we're learning the "dance" of COVID-constrained golf and there are signs of increased demand against
the lower capacities and cart restrictions as we go.
If you'd like the full profile of the any US market including all the underlying numbers, you can get that or a
facility draw area-based analysis quickly and affordably
by ordering the GLMA Market Factbook; click here. for
more information.
n

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The Pellucid Perspective - July 2020

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