(Qualified) “Yes”
One of the top 5 questions that Stuart and I get these days is, “When will we know it’s time to resume building courses in the US?” In a recent podcast recording of Frankly Speaking hosted by well-known and respected agronomist Frank Rossi with Cornell University, he baited Stuart with a different variation: “So, Stuart, please tell me you’re not advocating that we return to the build-a-course-a-day mentality and messaging, are you?” To be clear, “No, we’re not” however, as analysts we’re compelled to follow the numbers and, as we’ve outlined in these issues over the post-COVID era for golf, the surge in rounds demand coupled with the previous supply contraction has brought supply/demand back in balance (and beyond) in an amazingly short span. As counterpoint to that, an article in Club & Resort Business in August caught my eye with the article lead in of “A study conducted by THK Associates found that Midland County, TX has a demand for approximately four to four-and-a-half new 18-hole golf facilities in the area.” Wait? What?
In this issue, I’ll take us through the following points which outline that yes, there are areas of opportunity for more golf supply in the US but, unlike last build cycle, we need to be smarter about where and what type of golf we build. We’ll use Midland County TX as our example since it’s not a hypothetical question there currently:
- Using better tools than the early 2000s (our Golf Local Market Analyzer or GLMA), we’ll start by estimating how many golfers are in the study area and how much supply that golfer base should reasonably support
- Still using the GLMA as our fact foundation, we’ll then switch to estimating how much demand exists and whether the golf ecosystem there is running flat-out or has some slack (using our proprietary measures of Velocity and % Utilization)
- Concluding with GLMA data, we’ll look at the supply distribution by our 5 Pellucid, consumer-based facility classes (Private, Learning & Practice, Public Regulation-length Premium/Value/Price) what the current balance is and what type of supply is most under-represented and needed (spoiler alert, it’s not Public-Premium)
That final point will introduce the “rub” in the next building phase as identified by colleague Stuart Lindsay; trying to square the circle between what someone wants to build, what can be built at what cost (land + development) and…that pencils out as profitable in our lifetime. That challenge for the next 3-5 years, in our opinion, is the basis for the parenthetical “qualified” in this article’s headline. 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)
As always, samples of all our publications, reports and services are available on the Reports and Services pages of the Pellucid website.
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