July returned to the more normal pattern of relatively comparable results as Golf Playable Hours (GPH) registered +2% vs. last July at the national level. That slightly eroded the national Year-to-Date (YtD) GPH favorability to +13% vs. the same period year ago. The regional breadth for the YtD period continues to be widely favorable at 19:1 with 37 regions having favorable weather against 2 regions with unfavorable weather (the remaining 6 in the neutral zone of +/- 2%). Looking at performance by day-of-week, weekday weather, weekdays continue to be the driving favorability factor although weekends also have enjoyed GPH gains vs. Year Ago (YA). For the full-year forecast, we again saw a slight uptick in the full year GPH forecast suggesting owner/operators will not see a significant “giveback” in weather favorability the balance of the year. 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 June rounds played (as reported by Golf Datatech/NGF) to calculate the facility Utilization Rate, the industry recorded another Utilization gain for the month as June Utilization registered at 54% (comprised of a 3% increase in Played Rounds against flat Capacity Rounds) which is 2 points higher than the 2011 year-end value. In other words, June’s rounds demand gains were “earned” rather than the result of weather favorability. For the YtD period however, Utilization still lags YA due primarily to rounds demand not being able to keep pace with abnormal weather favorability. At the market level for Utilization we leveled off in July with neutral breadth at a 1:1 ratio of favorable/unfavorable markets (comprised of 16 markets up vs. 16 down and 29 in the neutral zone). This suggests that the favorable weather results we’ve seen at the regional level are less pronounced in the major metros within those regions (which, unfortunately, is where most of the golf is played).
Jim Koppenhaver comments, “The big story of the summer is the severe heat and lack of rainfall which is wreaking havoc with the farming industry, particularly in the Midwest. My colleague Stuart Lindsay often refers to golf course operators as being at the intersection of farmers, retailers and restaurateurs so, while the weather favorability looks good for Golf Playable Hours, it’s creating challenges on the maintenance quality and cost control side for many facilities. The other mitigating factor that we’re hearing anecdotally across our client base is that the higher-than-normal heat in many areas is depressing the seniors and women play. Despite those concerns, June turned in a solid month with rounds demand exceeding the flat weather and we’ll wait and see whether that feat can be repeated in July. The other encouraging news on the weather front is that the year-end forecast continues to hold up providing Pellucid weather clients with the courage to spend reasonable amounts through the summer of their early season revenue “dividend” on maintaining the course and, in most cases, in marketing programs to recapture defectors and gain share without having to resort to discounting or aggressive 3rd party tee time promotions.
On the Golf Fee Revenue (GFR) side via the June PGA PerformanceTrak numbers, they’re reporting a +5% gain for the month (bettering the 3% rounds increase which means rate-per-round increased slightly vs. YA). For the YtD period, GFR registered +13% (basically matching the 14% rounds increase meaning rate-per-round is even with YA). Inferring Revenue per Available Round (RevpAR, or the revenue efficiency of our “factories”) by comparing the YtD GFR gain (+13%) against the GPH gain (+17%), it suggests that while we’re having a relatively good year, all of it can be attributed to the weather gain (and, if we were honest with ourselves, we’re actually not keeping up with nature’s bounty this year).
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 8/15/12.
Intelligent, curious and courageous 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 (email@example.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.
Jim Koppenhaver, President, Pellucid Corp.