The Pellucid Perspective - May 2013 - (Page 15)

MARKET FOCUS San Diego: America’s healthiest golf market? San Diego, CA Core Business Statistical Area (CBSA) W ith the recent update of Pellucid’s Top 25 US Golf Markets, we’ll start to recycle through the list in the new order of the most healthy of the largest golf markets in the land. A little surprisingly, the golf weather utopia capital of the US, San Diego, lands in the top spot using Revenue-per-Available-Round (RevpAR) as the criteria . Since RevpAR factors out weather, we know it’s not due to the favorable climate, so let’s see what contributes to the health of this golf market that puts it at the top of the list. By rounds demand (our selection criteria for inclusion in the Top 25 list), San Diego ranks number 14 of US markets with facility-reported annual demand of just over 5M rounds for the market (remember this includes rounds by both local and nonlocal golfers). That golfer base is served by a relatively sparse 92 18-hole equivalent (EHE) facilities, producing a ratio of roughly 3.0K golfers per EHE, which is well above the national average (78% higher). The supply mix vs. the national distribution across Pellucid’s five access/value/usage segments shows a bias to Learning & Practice (entry-level golf facilitators) and Private. The balance of Value-added golf supply (Private & Public Premium) vs. Value golf (Public Value, Price and Learning & Practice) is 48%/52%, which is similar to the national distribution of 50%/50%. Within Public-Regulation golf, the distribution between Premium/Value/Price is 31%/43%/27%, which suggests a slight bias to more affordable golf, primarily driven by the significant presence of Learning & Practice facilities, compared to the national distribution of 34%/42%/24%. All in all, it’s not a bad distribution, especially in light of the high cost of living for the area. (Remember, though, that the value groups are established at the local market level, so affordable golf in San Diego extends up to $90!). So, we’ve got a solid golfer base and a reasonable amount and mix of supply as a foundation. During the “go-go” years of supply development (19902000), San Diego showed admirable restraint (in fairness, part of it was you couldn’t buy land at an affordable enough price to support a golf course, although that didn’t stop the City of Carlsbad and their “new math”), adding 297 holes of supply or a Compound Annual Growth Rate (CAGR) in excess of 2%. Mitigating that industry-pacesetting annual increase in supply was modest annual population growth of about the national average (1%) meaning the market entered the 21st century with an 11% supply “overhang” (similar to the national average, which was also 11% supply dilution vs. 1990). Since 2000, the rate of supply growth has moderated to ~1% against a similar, steady www.PellucidCorp.com Private PublicPremium PublicValue PublicPrice Learning & Practice San Diego, CA CBSA Future Facility Supply Mix – Private – Pub-Prem – Pub-Val – Pub-Price – Learn & Prac Tot US Index vs. US 271.7 24,400 92 14,675 2,953 1,663 Golfer Base – Est. # of Golfers (Ks) – # of 18 Hole Equivalent Facilities – Golfers per 18-Hole Equiv. 178 33% 15% 21% 13% 18% 27% 23% 28% 16% 6% 122 65 75 81 300 11% 6% 3% –15% 333 N/A –6% –19% 29 49.6 26.7 186 57% $2,710 44% $836 130 324 $24 $11 218 Supply/Demand Balance – ’00-’11 Cume Supply Growth/Decline – ’00-’11 Cume Rds Demand Growth/ Decline – ’00-’11 Cume Mkt Supply Dilution (-)/Absorption (+) Level* – Avg Ann Rds Velocity (ks per 18-hole Equiv.) Rounds & GF Revenue Health – % Utilization Rate – Avg. Ann. Rev. per Public Regulation EHE ($Ks) – Revenue per Available Round (RevpAR) * Period % Chng in Rds vs. Period % Chng in Supply + Inverse index, lower is better Above average level vs. US (Index >105) Average level vs. US (Index 95-104) Below average level vs. US (Index <95) The Pellucid PersPecTive 15 http://WWW.PELLUCIDCORP.COM

Table of Contents for the Digital Edition of The Pellucid Perspective - May 2013

The Pellucid Perspective - May 2013
Contents
The battle for the soul of golf
Is it time for nine?
Who’s that knocking at your door?
Dire participation projections inspire “Tour Test” concept
Familiar faces in new golf industry places
April golf weather impact: Not as bad as March, but off double digits
San Diego: America’s healthiest golf market?
Escalante Golf to buy 4 Houston area clubs
The big Why-Me-jian

The Pellucid Perspective - May 2013