The Pellucid Perspective - October 2012 - (Page 14)

MARKET FOCUS Growing Nashville market holding its own Nashville, TN Core Business Statistical Area (CBSA) C ontinuing to move down our list of the Top US Golf Markets by number of golfers, we find ourselves this month in the Country Music Capital of the World, Nashville TN. Nashville is one of those great, overlooked 2nd tier cities (by population, not by quality) that has a good distribution of business, education, and of course a thriving music industry. By number of golfers (which is influenced by sheer population but also factored by the state participation rate, unlike standard NGF analyses and market rankings), Nashville ranks number 28 in the nation. Compared to last month’s market focus, Baltimore MD, you can see that the golfer base falls off pretty steeply from 210K last month to just under 100K this month. The golfer base of roughly 99K is served by 58 18-hole equivalent (EHE) facilities, producing a ratio of roughly 1,700 golfers per EHE which is roughly dead on the national average (remember, this doesn’t count part-time or seasonal residents or any tourist bodies). The supply mix vs. the national distribution across Pellucid’s five access/value/usage segments skews slightly to Public-Premium. On the flip side, Public-Price and Learning & Practice (the combined “bunny slopes” for golf ) are under-represented supply segments vs. the US average. The balance of Value-added golf supply (Private & Public Premium) vs. Value golf (Public Value, Price and Learning & Practice) is 76%/24%, considerably more concentrated to the high end vs. the national distribution of 46%/54%. Within Public-Regulation golf, the distribution between Premium/Value/Price is 34%/42%/24%, which shows a slightly higher concentration in the Premium segment at the expense of the Price segment compared to the national distribution of 30%/42%/27%. All in all though, this isn’t a dramatically skewed supply distribution and isn’t nearly as out-of-whack towards Public-Premium golf as most other US markets. During the “go-go” years of supply development (1990-2000), Nashville participated fully in the build-a-course-a-day craze, adding 252 holes of golf during the period. Offsetting that 3% increase in supply, however, was 2% annual population growth, which mitigated the cumulative supply somewhat, topping out at 10% (or about the national average). Since 2000, the change in supply has moderated to a very manageable annual rate of -1% which is less than the annual population growth (+2%), suggesting that modest supply absorption may be taking place. In the post-2000 period, however, we track supply dilution by comparing supply change to change in rounds demand, which results in Nashville basically adding slightly to their supply dilution (flat annual rounds (not bad compared to US -1% annual decline) 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 Nashville, TN Tot US Index vs. US 98.8 26,300 58 14,924 1,718 1,762 27% 23% 28% 16% 6% 14% 1% –13% 30.7 26% 20% 28% 18% 8% 8% –10% –18% 27.7 98 104 115 100 89 75 173 N/A 75 111 Supply/Demand Balance – ’00-’10 Cume Supply Growth/Decline – ’00-’10 Cume Rds Demand Growth/ Decline – ’00-’10 Cume Mkt Supply Dilution (-)/Absorption (+) Level* – Avg Ann Rds Velocity (ks per 18-hole Equiv.) 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 + Inverseaverage level vs. US (Index >105) Above index, lower is better 53% $838 $14 52% $983 $16 101 85 90 Average level vs. US (Index 95-104) Below average level vs. US (Index <95) coupled with 2% annual continued supply growth). The net effect is an additional 10% of supply dilution during the 20002010 decade, added to the 10% overhang at the beginning of the millennium. This means that the average facility in Nashville has OctOber 2012 14 The Pellucid PersPecTive

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

The Pellucid Perspective - October 2012
Contents
Pacific Links – golf ’s new kid on the block
Which markets will recover first? A guide to supply absorption patterns
Moving forward, in different directions
Don’t sign away your web domain
September golf weather impact: Stayin’ alive
Growing Nashville market holding its own
Cordillera to be sold by year-end according to mediation decision
Trick or treat!

The Pellucid Perspective - October 2012