December 2011 is one for the record books as a large swath of the country experienced unseasonably warm temps and a dearth of that white fluffy stuff resulting in an increase in Golf Playable Hours (GPH) of +78% vs. last December at the national level! This cut the November Year-to-Date (YtD) deficit of GPH in half and resulted in a year-end GPH deficit of -1% vs. year ago. Regional breadth for the YtD period improved slightly but still finished the year with negative breadth at 1:2.1 with 10 regions having favorable weather offset by 21 regions with unfavorable weather (14 in the neutral zone of +/- 2%) The GPH results by day-of-week part finished with weekdays showing more weather unfavorability (-2%) than weekends which had slight favorability (+1%). This favorability should have provided a slight boost to rounds and revenue results due to higher utilization and rates on weekends.
Looking back on November rounds demand as reported by Golf Datatech/NGF to calculate the facility Utilization Rate (UR), we lost 1 point of utilization (51.5) at the national level (comprised of a 2% increase in Played Rounds against a GPH increase of +4%, score one more for the Squirrels vs. Bears theory). Based on November’s UR, the YtD period Utilization remained at 52% (comprised of a 4% decrease in Played Rounds against a 2% decline in Capacity Rounds) which is half a point lower than the 2010 year-end value. In other words, as an industry at the national level, we only slightly underperformed poor weather in generating rounds demand. Leading the YtD market utilization “winners”, among the markets that matter in rounds contribution, are Dallas, Seattle and Chicago all up 2 points or more while the “biggest losers” are led by Cincinnati, Denver and Philadelphia which all lost 2 or more points. As only Pellucid can quantify, some Utilization winners are positive rounds in the face of negative weather while some of the losers are rounds declines that exceeded unfavorable weather.
Jim Koppenhaver comments, “In compiling the regional and market-level weather this month, some of the swings in fortune vs. 2010 in December were pretty amazing. In the SE Coastal region, they were pummeled last year with GPH values <50 for the month (normal should be around 100) while this year they were showered with values in excess of 125 GPH, that's a big swing (to the positive side fortunately). In the northern climes, much of the Northeast and Great Lakes regions were temperate enough for golf and snow-free and we've had clients reporting that they put their full-time staff to work manning the counter for incremental days in December with several of the courses reporting 100 rds/day weekends in the most benign weather locations. If we don't see a meaningful jump in rounds played at the national level for the month of December (5%+), then it's time to get out the defibrillator paddles for the golf industry because it just doesn't get much better than that on a wide geography based on what we've seen historically. My enthusiasm is tempered by the fact that there's only so much that the northern part of the country can do in reaction to favorable December weather but we also saw strength in the 12 month season markets which builds on the previously-reported November favorability. All in all, it should be a nice finish for the industry on rounds although, with over 96% of the annual rounds accounted for traditionally by November, we're still looking at being down 2-3% for the year no matter how good December turns out."
On the Golf Fees revenue side via the November PGA PerformanceTrak numbers, they're reporting a 2% gain for the month (slightly worse than their reported 3% increase in rounds meaning rate eroded slightly vs. YA). This keeps the YtD GF revenue deficit at -2% which, compared to the 2% decline in rounds, means that rate (revenue per played round or RevpPR) is flat vs. YA (that's not bad news). Further encouragement is that, when factoring in our -2% decline in Capacity Rounds, this would place Revenue per Available Round (RevpAR) at parity with 2010. In other words we can explain most of our rounds loss and revenue loss on slightly unfavorable weather at the national level while rate appears to be holding its own; not a bad story considering where we've been in 2008-2010.
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 1/16/12.
Pellucid recently announced the introduction of their web-delivered, facility-level, real-time weather impact information called Cognilogic available for as little as $120 for a year-end report or $240 for the year-end report and 12 month tracking. For more information or to subscribe, contact Stuart Lindsay of Edgehill Golf Advisors (edgehillgolf@msn.com). Pellucid also offers geographic summary reports at regional level ($199/yr, 45 regions, 12 rpts) or market level ($299/yr, 61 markets & 45 regions, 12 rpts) or as a component of their Pellucid Publications Membership (Outside the Ropes, State of the Industry, Monthly Weather Impact and Top 25 Golf Markets reports, $495 annually). 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