With all the turbulence in the economy, employment and the golf industry in general, July’s flat performance for Golf Playable Hours (GPH) compared to 2008 should be a calming influence. At the national level, July’s GPH were down 0.6% compared to the same period last year. That keeps the Year-to-Date (Ytd) weather impact in the neutral zone at less than 1% different vs. the same period in 2008.
Beneath the national calm, the YtD regional breadth ratio (measured as # of regions up compared against # of regions down) declined slightly but remains positive at 1.3:1. This is comprised of 19 regions up vs. 15 down with the remaining 11 weather-based regions recording neutral results (+/-2% with all 45 regions “in play”). Leading the “weather blessed” key rounds-contribution regions for the July YtD period are Ohio Valley North and Mid Continental North with GPH favorability of 10%+. On the “weather challenged” side of the ledger, key rounds-contribution regions Florida North and Northeast US are down in GPH for the YtD period in excess of 5% each.
Looking back at the previously-reported weather results vs. the industry alliance rounds played shows that the June % Utilization Rate (UR) suffered a drop to 46% or a meaningful decline of 2 points vs. the 2008 national annual benchmark (comprised of a 3% decrease in rounds against a 2% increase in GPH). Pellucid’s Market-Level Weather Impact tracking identifies the biggest gainers and losers in % Utilization Rate for 61 markets/states/state groups. The market-level breadth shows 13 geographies up compared to 20 down and 28 in the neutral zone or a negative market-level breadth ratio of 1:1.5. Leading the “utilization winners” are Cleveland, San Antonio and the Northeast states while Hawaii and Chicago are atop the “utilization losers” list for the YtD period.
Pellucid President Jim Koppenhaver comments on the current results saying, “Uncharacteristic of me, I’ll take the middle of the road on the YtD weather impact. It’s neither as good as nor as bad as it could have been (apologies to Yogi Berra). At the industry level, we’ve got our hands full navigating the choppy waters without having to deal with unfavorable weather so, as an industry-level stakeholder, I’d take steady. The challenge continues to be the ebb and flow of weather across markets which underscores why just counting rounds variance doesn’t tell the whole story. Take Chicago as an example, we’ve lost 6 points of utilization through June with flat rounds results but driven by the fact that GPH is up 14% vs. last year. Net, a pretty solid weather summer this year on which we haven’t been able to capitalize. The rounds tracking would say Chicago’s “fine” while we’re actually working with our local clients to understand what’s not working and helping them taking corrective actions.
On the pricing and revenue side of the equation, PGA PerformanceTrak’s June YtD Executive Summary is showing a slightly accelerating decline in Median Golf Fee Revenue (-5%) and a similar trend in Median Golf Fee Revenue per Round (-3%) which means we’re seeing a combination of slight rate erosion as well as the revenue loss associated with the drop in rounds. In the grand scheme of life, this revenue decline is probably market-beating but, unfortunately, I’ve found that the banks usually aren’t that interested in “relative” performance. These revenue results suggest that the current discounting strategies are maintaining rounds but failing to reach revenue break-even (coming soon to an Outside the Ropes issue near you).””
With the addition of monthly market-level weather and utilization tracking, Pellucid now offers three levels of geography-based reports (US, 45 Regions, 61 Market/States) and three levels of facility-based reports (the 10-yr Trend Summary, the Annual Review report and the Monthly Tracking service). Pellucid also continues to integrate weather impact into their Facility Performance Scorecard (FPS) application for clients using the FORE! Reservations Point-of-Sale system as well as incorporating it into custom research projects and Golf Local Market Analyzer reports as an additional dimension. Combined with the client revenue data, the facility-level reports quantify the key measure of RevpAR (Revenue per Available (capacity) Round) which is the single best measure of the financial efficiency of your “factory.”
Parties interested in understanding and quantifying what part of rounds and revenue performance is due to ”controllable” vs. ”uncontrollable” factors (i.e. course owners, lenders, buyers, sellers, equipment manufacturers, retailers and service providers) can find more information on Pellucid’s weather capabilities at www.pellucidcorp.com.
For more specific information on how Pellucid’s Weather Impact capabilities answer key business performance questions, including a sample report and pricing, contact Jim Koppenhaver at jimk@pellucidcorp.com.
Contact:
Jim Koppenhaver, President, Pellucid Corp.
jimk@pellucidcorp.com
www.pellucidcorp.com
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