May extended the weather winning streak as the 5th straight month of regionally universal favorable weather as Golf Playable Hours (GPH) registered +6% vs. last May at the national level! That slightly decreased the national Year-to-Date (YtD) GPH favorability to +24% vs. the same period year ago. The regional breadth for the YtD period continues to be nearly a clean sweep for the “favorable side” at 39:1 with 39 regions having favorable weather against 1 region (HI) with unfavorable weather (the remaining 5 in the neutral zone of +/- 2%). Looking at performance by day-of-week, weekday weather continued to drive the favorability which is slightly less beneficial to the average operator due to the rounds and rate differentials. For the full-year forecast, we saw a slight decline in where we’ll end up at the end of 2012 but it’s still showing a healthy increase in weather favorability vs. 2011. The values for the above two metrics as well as market-level Utilization for the preceding month are available to Pellucid Publications Members via the Client section at the Pellucid website (go to www.pellucidcorp.com for information or to subscribe).
Looking back on April rounds demand, as reported by Golf Datatech/NGF to calculate the facility Utilization Rate, it comes out mathematically as a modest deficit in Utilization but driven primarily by the healthy increases in Capacity Rounds (CR) which we know from experience won’t move in perfect correlation to sizeable weather improvements. The YtD Utilization registered at 46% (comprised of a 20% increase in Played Rounds against a 38% increase in Capacity Rounds) which is 7 points lower than the 2011 year-end value. In other words, rounds demand continued to lag the weather favorability through April in the absolute. At the market level for Utilization we see negative breadth with a 1:1.3 ratio of favorable/unfavorable markets comprised of 10 markets up vs. 29 down and 22 in the neutral zone. This is not cause for alarm, it just says that the pattern of rounds gains lagging weather favorability is evident across more markets than not.
Jim Koppenhaver comments, “I thought I might have jinxed the industry when I wrote in the April Outside the Ropes that the weather-induced healthy start to 2012 would most likely produce the first year “in the black” for many industry stakeholders in several years. My superstitious fear increased as the NGF came out with their own positive prediction (except it was a month later and they had no support such as the full-year weather forecast for GPH, I guess imitation is the sincerest form of flattery). Our client courses are benefiting from a virtuous cycle of healthy favorability early in the year which is pumping up rounds and revenue (both rounds-related and ancillary services by the way) and putting cash in the coffers. While most are still spending cautiously, the solid results for May as the first real month of full-national engagement, coupled with the information we’re providing on the full-year forecast, has them identifying and prioritizing spending initiatives for the back half of the year. Encouragingly, a number of them are planning to reinvest some of the windfall in increased consumer marketing programs and are, for the most part, showing admirable restraint in laying off the discounting game unless provoked. For those in the industry long opining that I’m a perpetual cynic, our tracking and predications for 2012 will bear out my assertion that, “We don’t create the (bad) news, we only report it.”
On the Golf Fee Revenue (GFR) side via the April PGA PerformanceTrak numbers, they’re reporting a +13% gain for the month (slightly lagging the 18% increase in rounds meaning rate decayed slightly vs. YA). For the YtD period, Golf Fee revenue registered +20% also reflecting a lagging rate (by comparing the 24% rounds increase producing a rate decline of 4% vs. YA). Given the much stronger April YtD GPH results vs. GFR (+38% GPH vs. +20% GFR), it suggests that Revenue per Available Round (RevpAR, or the revenue efficiency of our “factories”) is lagging last year and all of our GFR favorability can be explained by weather (vs. the industry “saw” of superior operations).
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 6/15/12.
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) for $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 product, 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
