July brought an unexpected and unfavorable turn with widespread and extended heat which depressed national Golf Playable Hours (GPH) to -5% vs. July 2009. That completely erased the previous slight Year-to-Date (YtD) GPH favorability with the July YtD GPH measure now registering flat vs. year ago. At the national level for the YtD period, the weather distribution of weekdays vs. weekends favorability returned to an even balance with both “weekparts” being statistically flat vs. year ago for GPH.
Looking at the July YtD weather impact breadth ratio results (measured as # of regions up compared against # of regions down), the regional breadth measure turned negative again at 1:1.3. This is comprised of 15 regions up vs. 20 down and 10 in the neutral zone. The Northeast, Great Lakes, Ohio Valley and Pacific Northwest regions continue to favorable weather trends for the year while the Southeast, Mid-Continental, Texas, Rockies, Southwest and Hawaii continue to fight weather unfavorability this year.
Looking back at the previously-reported June weather results vs. the Golf Datatech/NGF rounds played figures, the monthly % Utilization measure held its own at 53% (comprised of an 2% decrease in rounds demand against a 2% decrease in GPH for the month) which put it statistically flat with the 2009 year end benchmark. That stopped the Utilization erosion putting the YtD measure at 51% or 2 points below the 2009 mark. The market-level breadth recovered slightly in June although YtD it’s still strongly negative at 1:2.5 (comprised of 10 markets up vs. 25 markets down and 26 in the neutral zone). Market utilization winners are led by Myrtle Beach, Jackson MS and Albuquerque up more than 3 points YtD while Seattle, Minneapolis and Milwaukee are notable among the utilization decliners all losing more than 5 points through June.
Pellucid President Jim Koppenhaver comments on the current results saying, “This is the first time since we modified our weather impact analysis approach to incorporate a high end temperature limit that we’ve seen it have meaningful and widespread impact at the national level for any given month. While it’s intuitive (and our clients have supported the hypothesis) that above average summer temperatures will have an adverse impact on rounds demand, it will be interesting to see what the national and market-level results will be in response to July’s weather. We went back through the causal data for the month after seeing the results to determine if the decline was driven by precipitation, temperature or both and found that, in the vast majority of cases, July’s results were driven by hot, dry conditions across much of the US, not rainfall. That said, we also noted that the hot weather rarely eliminated whole days from GPH but we lost a lot of extended mid-day periods (i.e. 10AM-4PM). This in my mind supports two of the fundamental premises upon which Pellucid’s weather capabilities are built: 1) Weather impact is not linear (i.e. you can’t say a 1 degree increase in temp is worth an x% increase in rounds) and 2) You can’t measure weather impact in whole Playable Days vs. Unplayable Days. July is the poster child for both those misapplications and I predict that organizations using those rules will dramatically miss the call (the temperature guys will underestimate and the Playable Days folks will overestimate) on July’s weather impact.”
The PGA of America PerformanceTrak numbers for June are showing YtD Rounds are down 2% continuing to be driven by declines at the two ends of the price spectrum: Private (-3%) and Muni/Military/Univ (-2%). Golf Fee revenue YtD showed a slight improvement to – 4% driven by all segments except Private. Looking at the Golf Fee rate performance YtD, they report that it’s $28 and slightly up (+2%) vs. year ago. This creates a slight inconsistency in that rounds are only down 2% and rate is up 2% which means something else is contributing to the 4% Golf Fee revenue decline. Consistent with that inconsistency is they’re also reporting facility Median Total Revenue is flat with the component factors being flat with the exception of Golf Fee revenue which is -4%. Clearly there is another component of revenue results here that is missing but we can’t figure out where that loss may be hiding.
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 the golf “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
