Casey Alexander in his PGA Merchandise Show summary letter eloquently captured the mood at this year’s event, “Industry participants have embraced the mantra that the business is ‘stable’, a characterization we heard over and over at the PGA Show.” As an analyst by trade, I can’t argue that the quantitative figures for ’17 were largely sideways as I’ll outline in this recap of our annual State of the Industry (SoI) presentation. What remains to be seen however is whether the current sideways motion is golf finding a support point on the key metrics of rounds, revenue, facility velocity and golfers or whether we’re on a shelf partially down a longer slope into the valley. Only time will tell but, for that reason, we’ll call the current industry direction sideways rather than trying to convince ourselves and others that it’s “stable” (meaning it has found a solid support point).
This is the annual State of the Industry edition where I briefly summarize the key points from Stuart Lindsay and my narrative on the industry for the preceding year. He handles the qualitative points and trends and I take the quantitative metrics and insights. For those of you unable to attend, this issue will cover the key points and hopefully give you just enough facts and insights to make you want to purchase and own both the PowerPoint slides and the PDF commentary components of our annual assessment:
– Utilization, Velocity and Play Rate – Utilization slipped slightly (meaning the 3% rounds decline was not all due to weather), velocity (average facility throughput) declined due to the rounds drop and fractional supply contraction, Play Rate (rounds per capita) also declined due to the intersection of increasing population, a flat golfer base and consumers reporting playing fewer rounds. One ray of hope was that we directionally believe that Revenue-per-Available Round (RevpAR) was up which means we may have benefitted from some pricing power which we’ll explain later in this issue.
– Trends and observations are a combination of “something old, something new, something borrowed, something blue” – Stuart outlined the continuing trend of Millennials being a drag on participation and rounds and new trends in cloud services that are reshaping the PoS/Tee Sheet landscape and how we’ll use information in the near future. He also pointed out that the narrative of course closings being predominately 9 hole and old stock is only half-right and how advancing digital technology is providing more ways to connect with consumers and build relationships if golf owner/operators can catch the wave and make intelligent adoption issues (he didn’t put it quite like that).
– Is TopGolf a rising tide that will lift all boats for golf operators? We spent a few minutes outlining our belief that TopGolf is an interesting and growing business model but the key question on how it grows participation and feeds the operations side of the golf industry with more rounds and revenue remains unanswered.
For our Executive Summary recipients, the entire treatment on this topic can be purchased one of three ways at Pellucid’s website (www.pellucidcorp.com):
1. Subscribe to the Pellucid Publications Membership for $495/yr. Annual subscribers get access to all Pellucid publications (Outside the Ropes monthly digital newsletter, annual State of the Industry report portfolio (PowerPoint presentation, PDF commentary report, access to Orlando video of presentation), monthly Geographic Weather Impact Tracking (US, 45 regions, 61 markets), Top 25 US Golf Markets Ranking Scorecard (25+ dimensions and ranking for largest 25 markets) and the National Consumer Franchise Health Scorecard (expanded data and tables underlying this issue’s summary figures)
2. Subscribe to OtR, 12 monthly issues for $130/yr with a money-back guarantee if you’re not satisfied at any time during your subscription. Subscribers also get access to the historical archive of past issues (50+) via the members-only section of the Pellucid website.
3. Purchase single issues (including this one) for $14.95 per issue; click here to view available issues by title and select those of interest to purchase and download.
Contact:
Covering the business of golf!
