The Pellucid Perspective - March 2012 - (Page 15)

MARKET FOCUS Cleveland, OH Core Business Statistical Area (CBSA) his month we take a look at the Cleveland, OH CBSA, proudly hailed as the home of the Rock and Roll Hall of Fame by its supporters and dubbed the “mistake on the lake” by detractors. For this narrative, however, all we care about is whether it’s a good, neutral or poor climate for golf from both the operator/owner perspective as well as golf consumers. Cleveland ranks 22nd of the Top 25 golf markets in the US by number of golfers. The sizeable golfer base of roughly 225K is served by a healthy number (116) of 18-hole equivalent (EHE) facilities producing a ratio of just over 1,900 golfers per EHE, which is just above the national average (remember, this doesn’t count part-time or seasonal residents or any tourist bodies). The supply mix skew vs. the national distribution across Pellucid’s five access/value/usage segments shows a higher concentration of Public-Value (38% vs. 33% nationally) with Public-Price being the most under-represented segment at 8% of total holes vs. the national average of 13%. The balance of Value-added golf supply (Private & Public Premium) vs. Value golf (Public Value, Price and Learning & Practice) is 50%/50%, mirroring the national average of 51%/49%. Within PublicRegulation golf, the distribution between Premium/Value/Price is 32%/56%/12%, which is biased toward the midpoint (PublicValue) compared to the national distribution of 30%/42%/27%. Noticeably under-represented is the Public-Price segment at only 8% of total supply vs. 18% nationally. During the “go-go” years of supply development (19902000), Cleveland fully participated in the build-a-course-a-day mentality, expanding at an annual rate of 1.8% and creating a cumulative supply dilution level of -10%. Since 2000, the change in supply has moderated to a very manageable annual rate of <0.5%, which is in line with the “new normal” of supply expansion (and even that’s stretching it in the face of continued rounds declines). Cleveland, however, has the unique benefit of seeing modest rounds demand since 2000 increase marginally (+0.6%/yr), which means that their supply/demand balance situation is currently better than neutral vs. the 2000 baseline year. That’s a very unusual situation in today’s industry and means that local operators here are not fighting the supply dilution headwind faced in most markets due to supply overhang (prior to 2000) and rounds declines (post 2000). The average facility has throughput of roughly 28,000 rds/ yr, slightly above the national average before factoring in climate and daylight influences. The more accurate measure is www.PellucidcorP.com T Private PublicPremium PublicValue PublicPrice Learning & Practice Future Facility Golfer Base – Est. # of Golfers (Ks) – # of 18 Hole Equivalent Facilities – Golfers per 18-Hole Equiv. Supply Mix – Private – Pub-Prem – Pub-Val – Pub-Price – Learn & Prac Cleveland, OH Tot US Index vs. US 225.2 26,300 116 14,924 1,941 1,762 28% 22% 38% 8% 5% 26% 20% 28% 18% 8% 110 108 110 136 44 63 50 N/A N/A 101 106 79 94 Supply/Demand Balance 4% 8% – ’00-’10 Cume Supply Growth/Decline 6% –10% – ’00-’10 Cume Rds Demand Growth/ Decline 2% –18% – ’00-’10 Cume Mkt Supply Dilution (-)/Absorption (+) Level* – Avg Ann Rds Velocity (18-hole Equiv.) 28,090 27,745 Rounds & GF Revenue Health – % Utilization Rate – Avg. Ann. Rev. per Public Regulation EHE ($Ks) – Revenue per Available Round (RevpAR) * Period % Chng in Rds vs. Period % Chng in Supply + Inverse index, lower is better 55% $779 $15 52% $983 $16 Above average level vs. US (Index 105+) Average level vs. US (Index 95-104) Below average level vs. US (Index <95) Cleveland’s 55% utilization rate, which beats the national average by 3 points. This means that, after factoring out the weather favorability of a 12-month season, the average golf “factory” in (See Market Focus on page 17) The Pellucid PersPecTive 15 http://WWW.PELLUCIDCORP.COM

Table of Contents for the Digital Edition of The Pellucid Perspective - March 2012

The Pellucid Perspective - March 2012
Contents
New twists in Cincinnati muni course taxation situation
Study cites “Best Practices” to generate more female play
Chip Brewer chosen to write Chapter V of Callaway Golf
Knowing your customer and making it work
Golf Industry Show, CMAA Expo to share San Diego venue in 2013
February weather impact: The hits just keep coming!
Cleveland, OH
Southworth Development acquires Willowbend CC from Reebok head Fireman
Show me the money

The Pellucid Perspective - March 2012