The Pellucid Perspective - January 2021 - 4

CONFESSIONS OF A
GOLF ANALYST

March of 2020...
It changed so much, and so quickly, that this year's SoI supply/demand equilibrium chart will show the following improbable outcome: We'll actually be under-supplied relative to rounds
demand against that 2020 equilibrium benchmark by 7-9%!
Before you get all giddy, there are two important caveats: 1)
Whether or not we can hold our head above water in '21 at the
elevated demand level remains to be seen and 2) We still have
market-by-market challenges on the distribution of the rounds
dividend as well variations in the balance of that supply by type
that rounds won't magically " even out " .
How did this happen? It all happened on the demand generation side which makes it even the more unlikely scenario vs.
my pre-'20 crystal ball. My projection was that supply contraction would have to escalate to 2-4%/yr (let's call it 3% at the
midrange) and rounds demand would stabilize so we'd close the
gap by a net 3% per annum and, in 3 years of those conditions
(say 2022), we'd get back to '00 (long journey back). As I finish
the year end calculations for the SoI, it's looking like supply contraction actually shrank in rate in '20 relative to the '17-'19 levels
so the gap closing was all the result of the unprecedented rounds
increase vs. '19. Slight detour here, those of you who watch the
industry navel-gazing by our friends in Jupiter likely saw the
" Good Dr. Joe " proclaim that actually we had a higher increase
in Tiger's breakout year in the late 1990s. I'd counter that this

4 THE PELLUCID PERSPECTIVE

was before the industry started tracking rounds played based on
facility reporting; back then the NGF was using consumer survey and we know how accurate that's been over the years. For
reference, we compare the facility results to our NSGA consumer survey reporting for rounds annually and, in a good year, they
move the same direction. If they're within 10% of each other in
any given year that's unusual, so forgive my skepticism of the last
verifiable annual increase in rounds played prior to facility tracking commencing in '00 via Golf Datatech and, ironically (not
causal) when Pellucid entered the industry and the conversation.
But I digress...
Our projection for '20 rounds demand, that we'll outline in
the upcoming SoI, is that we'll " scare " 500M rounds for the year
which would be up approximately 65M rounds vs. '19 or +15%
(wow!). So, while the rest of you party and celebrate our good
fortune (not being critical, you're allowed that indulgence), my
mind has already turned to the not-uninteresting question of:
" What level of '20's demand would we have to sustain to settle
back into equilibrium level if supply contraction doesn't significantly stray from its current 1% per annum pace? " Given the
current vaccine news and projections, we have to handicap the
'21 rounds race assuming that we won't get a full year of suppressed competition for time and money from the pre-COVID
activities (spectator sports and other entertainment options that
I anticipate will come back online (many with a vengeance) by

JANUARY 2021

https://business.golfnow.com/

The Pellucid Perspective - January 2021

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