The 2011-2012 “winter season” may very well go down in the history of recent memory as “the winter that wasn’t.” February continued a string of incredible temperate weather with Golf Playable Hours (GPH) registering +29% vs. last February at the national level! That brings the Year-to-Date (YtD) GPH results to +40% vs. the same period year ago nationally. The regional breadth for the YtD period was significantly favorable at 19:1 with 19 regions having favorable weather against 1 region with unfavorable weather (the remaining 25 were either in the neutral zone of +/- 2% or out of season). The only thing keeping the industry from the weather trifecta was that weekdays had significantly better weather gains than weekends for the month. Looking at the full year forecast, the current projection shows us nationally getting to “keep” all of this early year gain (if you want to know the weekday/weekend breakouts and the full year forecast values, you’ll have to bite the bullet subscribe for that, details in the closing paragraph).
Looking back on January rounds demand as reported by Golf Datatech/NGF to calculate the facility Utilization Rate, it comes out mathematically as a big drop in Utilization but given that many areas had exponential gains in Capacity Rounds (CR), we know that it’s unlikely in the transitional geographies that a doubling of the CR is going to produce a doubling of rounds. The YtD Utilization registered at 41% (comprised of a 24% increase in Played Rounds against a 57% increase in Capacity Rounds) which is 11 points lower than the 2011 year-end value. In other words, we were able to capitalize significantly in rounds generation behind the favorable weather but not linearly. Leading the YtD market utilization “winners”, among the markets that matter in rounds contribution, are Seattle and San Francisco up 10 points or more while the “biggest losers” are led by Raleigh/Greensboro and Atlanta which lost 10 points or more (but against an astronomical weather improvement benchmark). The complete breakdown of the market-level Utilization for all 61 markets is available to Pellucid Publications Members via the Pellucid website (see below on how to subscribe).
Jim Koppenhaver comments, “In the face of this extreme weather anomaly across a large part of the US for the months of January and February, the question on everyone’s lips seems to be, “How much of this favorability am I going to get to keep and how much will Mother Nature take back later in the year? Because inquiring minds want to know (and because we have the ability to readily answer that the way we’ve structured our weather impact information and methodology), I looked at the national-level, supply-weighted full year forecast and it appears that we’re going to get to keep all of this gain. If you want to know if it’s going to get better and, if so by how much, then you’ll have to subscribe to the Pellucid Publications Membership and that annual, national forecast value is provided and updated each month in the Geographic Weather Impact Analysis workbook. I spoke with one of our clients recently here in Chicago and he indicated that they never really closed this winter (defined by him as 2+ consecutive days) and that has resulted in play of 1,700-1,800 rounds in Jan-Feb that weren’t in his plan. His only lament was that he had already published his pre-Spring rates which are in effect until 4/8/12 and so he’s not able to take advantage of the weather on a rate basis but, as we both agreed, that’s a great problem to have given the industry’s performance the last 5 years. Given the improving economy, employment and what appears to be favorable weather, I’m becoming cautiously optimistic that we could see positive rounds results this season although I still believe that the golf consumer base will continue to languish. The wild card in that picture will be “whence rates?” which will determine how much of any rounds favorability might make it to the bottom line.”
On the Golf Fees revenue side via the January PGA PerformanceTrak numbers, they’re reporting a 23% gain for the month (slightly lower than their reported 28% increase in rounds meaning rate lagged slightly vs. YA). Since it’s January, those numbers are identical to the YtD values. In other words, according to PerformanceTrak, all of our rounds and revenue gain can be attributed to weather at the national level and we left some money on the table in the absolute (again, with the caveat that incredibly favorable weather in January in the northern climes is not going to yield 1-for-1 gains in rounds or revenue).
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/news/elist, fill in the information and you will be registered for the next edition on 3/15/12.
As mentioned (thrice) above, industry stakeholders wanting the detailed metrics and monthly updates on weather impact at the national, regional and market level as well as utilization and the full year forecast numbers can subscribe to the Pellucid Publications Membership (Outside the Ropes monthly newsletter, 2011 State of the Industry, Monthly Weather Impact and Top 25 Golf Markets reports, $495 annually). For individual facility owner/operators who need facility-level history, current year results by month and day-of-week and full year forecast data, Pellucid/Edgehill’s self-serve, web-delivered, real-time weather impact service called Cognilogic is your answer. It’s 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, contact Stuart Lindsay of Edgehill Golf Advisors (edgehillgolf@msn.com). You can now order either of the above information services via Pellucid’s online store at http://www.pellucidcorp.com/purchase-reports/online-store.
Contact:
Jim Koppenhaver, President, Pellucid Corp.
jimk@pellucidcorp.com
www.pellucidcorp.com
