March provided a continuation of the baffling yet benevolent weather which closed out the official “winter” season of 2011-2012. March marked the 3rd successive month in 2012 of widespread, incredibly temperate weather as Golf Playable Hours (GPH) registered +52% vs. last March at the national level! That brings the national Year-to-Date (YtD) GPH results to +47% vs. the same period year ago. The regional breadth for the YtD period was similarly favorable at 9:1 with 18 regions having favorable weather against 2 regions with unfavorable weather (the remaining 25 were either in the neutral zone of +/- 2% or out of season). Weekdays were slightly more favorable than weekends and Pellucid is projecting that much of the country will get to keep a significant portion of the early season gains looking at the full-year GPH forecast (those details and figures are available to Pellucid Publications Members monthly, see details in closing paragraph for information or to subscribe).
Looking back on February 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 northern geographies had exponential gains in Capacity Rounds (CR), we know it’s unlikely that a doubling of the CR is going to produce a doubling of rounds. The YtD Utilization registered at 43% (comprised of a 15% increase in Played Rounds against a 40% increase in Capacity Rounds) which is 9 points lower than the 2011 year-end value. In other words, rounds demand responded to the widespread incredibly favorable weather but not on a one-to-one basis. Leading the YtD market utilization “winners”, among the markets that matter in rounds contribution, were Hawaii and San Francisco while the “biggest losers” were led by Raleigh/Greensboro and Atlanta (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.
Jim Koppenhaver comments, “I was among the skeptics last month (in part due to living through many fickle winters in Chicago) who believed that Mother Nature would take back some portion of the Jan-Feb “dividend” but I was (fortunately) wrong. Many of the facilities in the north have been able to open 15-30 days ahead of the average opening dates and several of our clients here in the Chicago area have reported that they’ve been able to “bank” between 1,000-2,000 rounds through March that weren’t in their annual plans. This is providing many operators with a much-needed cash cushion coming into the year although most are going to keep their powder dry on the spending side until at least half way through the season. The favorable full season weather outlook is one of three components that I cited in the most recent Outside the Ropes newsletter edition outlining why I believed that the golf industry will be “in the black” for most stakeholders for the 2012 year (although the 2013 and beyond outlook is dubious given that we haven’t cracked the code yet on time compression, skill levels or affordability). If the operators reinvest some of this favorability back into marketing and they lay off the discounting, the weather favorability can be further leveraged for revenue and profit gains in 2012.”
On the Golf Fee Revenue (GFR) side via the February PGA PerformanceTrak numbers, they’re reporting an 11% gain for the month (slightly lower than their reported 15% increase in rounds meaning rate lagged slightly vs. YA). For the YtD period, Golf Fee revenue registered +17% suggesting rate is also slightly off for this period (by comparing the 21% rounds increase producing a rate decline of 4% vs. YA). Given the much stronger increases in GPH than Revenue (+47% GPH vs. +17% GFR), it suggests that RevpAR is actually behind last year and all of our GFR favorability can be explained by weather.
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 4/16/12.
As mentioned multiple times 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
