Mother Nature took a final parting shot at golf as the season winds down in the northern climes with Golf Playable Hours (GPH) coming in 3% below last October at the national level. This continued the Year-to-Date (YtD) erosion of GPH which now also registers at -3% vs. year ago. Regional breadth for the YtD period is still negative at 1:2.1 with 11 regions having favorable weather offset by 23 regions with unfavorable weather (11 in the neutral zone of +/- 2%). The one saving grace continues to be the fact that the GPH decline is being driven more by weekdays (-3.3%) than weekends (-1.5%). Given our higher utilization and rates on weekends, this will slightly offset the rounds and revenue impact of the unfavorable weather this year.
Looking back on September rounds demand as reported by Golf Datatech/NGF to calculate the facility Utilization Rate (UR), the month showed a significant slippage to 49% (comprised of a 4% decrease in Played Rounds against favorable weather of +3% in GPH). Based on that utilization drop, the YtD period Utilization eroded slightly to 52% (comprised of a 4% decrease in Played Rounds against a 3% decline in Capacity Rounds) which is 1 point lower than the 2010 year-end value. Among the YtD market utilization “winners” are Dallas and Seattle up 7 and 5 points respectively while the “biggest losers” in utilization are Cincinnati and Denver losing 6 and 4 points respectively among the markets that matter in rounds contribution. Dallas increases utilization via a slight rounds increase amidst unfavorable weather while Seattle gains by holding rounds against very unfavorable weather. Cincinnati’s decline is driven by rounds loss that exceeds the weather decline while Denver only manages to hold rounds despite very favorable weather.
Jim Koppenhaver comments, “Pre-Pellucid the industry headline would have been “September rounds drop amid unfavorable weather conditions” (because we all know that rounds declines are driven by weather whereas rounds increases are driven by superior management and marketing). That would have been followed with accounts of sporadic unfavorable weather events, a la PGA PerformanceTrak’s weather section which highlights “The Pagami Creek Fire scorched approximately 93,000 acres, the largest wildfire to affect Minnesota in over 30 years” and “According to the US Drought Monitor, 29% of the contiguous US had drought conditions (D1-D4) at September’s end.” While those are interesting facts and may come in handy when playing Trivial Pursuit, they don’t quantify weather’s impact at the affected locations nor do they factor in whether those locations have a large or small impact on the US picture based on the rounds contribution of those locations (is there even a golf course in Pagami Creek MN?). As most US facilities turn their attention to assessing 2011 performance and the challenging task of forecasting and budgeting for 2012, it’s hard to imagine undertaking that seriously without incorporating weather’s impact (including using the weather Long-Term Norm for the upcoming year’s planning vs. using last year). Pellucid and Edgehill Golf Advisors will later this month make a general golf industry announcement of their new web-based, real-time weather impact reporting at the facility level called Cognilogic. For information prior to the public announcement for the “early adopters” out there, contact Stuart Lindsay (edgehillgolf@msn.com) and ask for information and a sample deliverable.”
On the facility Golf Fees (GF) revenue side via the September PGA PerformanceTrak numbers, it appears they’re trying to reconcile the YtD inconsistencies as they’ve switched the Executive Summary reports on revenue to just the current month period. Looking at the numbers for September for GF revenue, we see a decline of 3% in revenue which is (curiously) the combination of a 3% decline in rounds (volume) and a 1% decline in revenue-per-round (rate). In most math circles, that would be a 4% decline in revenue but since we’re dealing with median values it is mathematically possible to come up with that combination. The encouraging news that would come of that if the math is correct, is the industry would be registering a Revenue-per-Available Round (RevpAR) stabilization for the year if GPH is down 3% and revenue is also down 3%.
A broader and more detailed scorecard of the monthly key industry metrics can be found in Pellucid’s free digital magazine, The Pellucid Perspective. To register to get the current and future editions, go to http://www.pellucidcorp.com/utilities/guest.html, select any of the existing services for information and you will be registered for the next edition on 11/15.
In addition to the new Cognilogic delivery system, affordable weather impact tracking report options are available at regional level ($199/yr, 45 regions, 12 rpts), market level ($299/yr, 61 markets & 45 regions, 12 rpts) and individual facility level ($249, 3 years of history by month and day-of-week and current year forecast). 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