In the September issue I “baited” longtime Pellucid detractors, who have for years proclaimed us as “the industry pessimists” with the first call public statement that the supply-demand numbers suggest new supply is once again, from a quantitative perspective, feasible. The sub-header however is “in reasonable quantities, in the right locations with the right type of supply.” Historically, there’s been a lot of subjectivity in those 3 criteria as well as some bad math which previously produced MAI feasibility studies (Made As Instructed, credit to longtime colleague Steve Fanning down in TX for that gem). These were part of the gas fueling the build-a-course-a-day fire which…didn’t consider locations, overall types and levels (enter the real estate barons where every situation was a “nail” to their “hammer” of build a golf-centric housing development).
In this issue, we’re going to focus on figuring out what type of golf is needed in any particular market (we’ll use Designated Market Areas or DMAs) and how we approach advising clients on this element:
- Facility segmentation by access, experience and value-point is the cornerstone to looking at the “supply shape” of any geography. We re-wrote the industry perspective on how to do this from Private/Public-Muni/Public-Daily Fee to Pellucid’s 5 facility classifications (Private, Learning & Practice, Public-Premium/Value/Price) and customized them to each of the 210 US DMAs
- Using that segmentation approach, we’ll take a look at how Price/Value/Premium “floats” as you move across markets and can provide guidance on where a new project might land in that market’s segmentation which will, in turn, help you define the competitive set
- This leads to the final challenge by our clients of figuring out whether there exists a location in a market that can be economically developed and “pencil out” for the type of supply that’s lacking. The eternal (and historical) challenge has been that few have been willing to heed this final step as they try to build new, premium golf in a location that’s already over-supplied in that type but they can’t bring themselves to lower expectations to Public-Value and they’ll muscle their way in, establish their Augusta National and make one of the other existing premium facilities downgrade to Value in submission. Rarely works…
We’re currently in multiple discussions with potential clients around this subject so I can’t say for sure whether the market will behave differently this time around but, for those who have ears and will listen, we think we have a better roadmap for the next phase of supply expansion than our forebears hailing from Jupiter, FL. For our subscribers, read on for the full Monty; for our casual observers, you can join the World of Pellucid and start that journey (with this issue) one of three ways:
- Subscribe to the Pellucid Publications Membership for $495/yr (most comprehensive coverage & detail) – Annual subscribers get access to the following:
- Outside the Ropes monthly digital newsletter (including this issue for starters!)
- Annual State of the Industry report portfolio (PowerPoint presentation, PDF commentary report, access to Jim/Stuart video of presentation)
- Geographic Weather Impact Tracking (US, 45 regions, 61 markets) or Cognilogic for Golf Playable Hours/Capacity Rounds for individual facilities
- National Consumer Franchise Health Scorecard (expanded data and tables underlying this issue’s summary figures)
- Subscribe to OtR, 12 monthly issues for $250/yr. Subscribers also get access to the historical archive of past issues (last two years) via the members-only section of the Pellucid website
Subscribe to Golf Market Research Center (for operators wanting a combination of insights and action tools) – In addition to an OtR subscription (hence, this issue), you’ll get the State of the Industry presentation along with the full suite of Performance Tracking reports and weather impact services (Cognilogic for historical Golf Playable Hours/Capacity Rds, Foresight for the 60-day forecast for your facility location for Capacity Rds and daily key weather forecast variables)
