You’ve no doubt heard the phrase that a comparison isn’t valid because “it’s like comparing apples to oranges.” When the conversation moves from two disparate facts or perspectives to three or more now you get into what I call the “fruit salad” zone. As June draws to a close, it marks the 16th week of COVID constraints. I’m using 3/15 as the start point where Illinois and a number of other states went into their “shelter-in-place” restrictions which, by nature, put the kibosh on most recreational pursuits (not called walking, running or bicycling) and shutting down golf operations for nearly 75% of US courses initially.
Looking back over that period (Mar-Jun) it would be helpful and instructive to be able to assess the size and distribution of that damage to the golf operations sector as it relates to several of our core metrics such as Revenue (both Total and Golf Revenue which we define as greens fees & carts), Rounds, Utilization and RevpAR (the latter two factoring in weather impact). Alas, as a $25-$30B sector (golf operations), we have no single source, reliable, historical way to do this so we’re left with the following “fruit salad” approach to analysis in pursuit of understanding and insights. In this issue I’ll make an attempt at my best fruit salad analysis from what can be gleaned from the following disparate sources and sets of facts:
- (Apples) Golf Datatech – just released their May rounds figures at the national and state level showing a gain for May following declines in April and March. The YtD figure stands at -8% (-11% for the Public segment) after a pre-COVID start to the year of +15% (same for Public) coming out of February
- (Oranges) Club Benchmarking (private clubs exclusively) released figures that showed a significant double-digit drop in membership dues (dollars) for Mar followed by a near-doubling of that drop in Apr. This points out the overlooked fact in most of the industry media that, while rounds are an important indicator of health, last time I checked, no one pays bills and salaries with rounds; revenue is the “coin of the realm” for a successful golf operation
- (Grapes) Golf Business Solutions released daily figures for the back half of March April and the first half of May which gave us rounds comparisons for their portfolio at the national level of flat for March, double digit down for April followed by a huge gain (50%+) through 14 days in May when they stopped publishing the daily results
- (Bananas) Sagacity released results for 3 markets in which they have reasonable coverage (home market Phoenix, San Fran and Orlando expansion markets) showing rounds declines in the March-April period in double digits followed by strong rebounds across all 3 markets in the 1st half May (double digits suggesting potential offset of the previous declines)
In this issue I’ll make a (valiant) analyst’s estimate at how and if we can square the above results to come up with a reasoned guess as to what the March-May period tells us about rounds demand. For a perspective on how the revenue math might fall out of that, I’d recommend Stuart Lindsay’s June Perspective analysis and math found here. I’m sure there’s a number of readers out there asking, “Jim, why are you going through this agony, just accept that March-May sucked; it was a one-time event, put it in the rearview mirror and move on.” These are the same people who, when we introduced weather impact, reasoned that understanding weather’s impact on rounds demand in the rearview mirror (historically) was a waste of time because it was in the past and they simply wanted to execute today and plan for tomorrow. As I explained, that logic is akin to closing the books on your golf course in December and completely ignoring them for budgeting or the upcoming year’s programs and plans because “it was all in the past, hence irrelevant.” We study and try to square what happened during early COVID to try and determine which of those were one-time events and what type of rebound we might expect. I would propose that part of the reason our industry performance doesn’t get measurably better is because we’re so ill-equipped and obtuse about understanding basic industry metrics as they transpire monthly. For our subscribers, read on for the full fruit salad analogy and what the four disparate data points might tell us about COVID trends, performance and impact on golf operations. For our Executive Summary recipients, you can get the rest of the story one of three ways (all can be previewed and purchased at Pellucid’s website www.pellucidcorp.com
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