The Pellucid Perspective - February 2015 - (Page 18)

MARKET FOCUS Like oil prices, Houston market hard to figure Houston, TX Core Business Statistical Area (CBSA) F or our new readers, in this section we profile one of the Top 25 US Golf Markets (based on a composite score of the golfer base, the supply level and rounds demand). Within that Top 25 universe, we then rank them based on relative health using a Pellucid weighted scoring system on 8 variables ranging from Population Growth to Estimated Profitability-per-Available Round. In this issue, we'll profile the 6th healthiest market, the Houston-The Woodlands-Sugarland Metro Core Business Statistical Area (CBSA). Home of the Shell Houston Open leading up to the Masters and "ground zero" for the US oil industry, this has been a market of highs and lows for the local population. Enron encapsulated both extremes and now we're seeing perhaps the next boom and bust with US oil production skyrocketing due to "fracking" only to see prices drop dramatically due to the convergence of US and Middle East supply forces. We're more concerned with whether all those folks down there are slipping on their FootJoys and hitting the links or not (and whether they're paying decent money when they play). By rounds demand (one of our 3 selection criteria for initial inclusion in the Top 25 list), Houston ranks 16th among US markets with facility-reported annual demand of approximately 4.2M rounds (that facility-reported tally counts both local and tourist play). Looking at the golf consumer base, we see that Houston is home to a relatively healthy local golfer base of roughly 410K golfers (this is only local, resident population, doesn't count the tourism crowd). That golfer base is served by a healthy supply amount of 138 18-hole equivalents (EHE) producing an average ratio of nearly 3K local resident golfers per EHE, well above the national average. The supply mix vs. the national distribution across Pellucid's five access/value/usage segments shows a strong primary bias to Private at 42% of total holes compared to the national average of 27%, while Learning & Practice is the most under-represented segment at only 3% of holes. The balance of Value-added golf supply (Private & Public Premium) vs. Value golf (Public Value, Price and Learning & Practice) is 63%/37% vs. the national average of 50%/50%, meaning that the market shows a meaningful skew to Value-added (driven almost exclusively by the high incidence of Private vs. the national average). Within Public-Regulation golf, the distribution between Premium/Value/Price is 38%/36%/25% vs. the national picture of 34%/42%/24%, which skews slightly to the Premium segment so golf in Houston probably wouldn't be described by locals as "affordable" in its distribution. That said, remember Pellucid allows the definitions of Premium/Value/ 18 The Pellucid PersPecTive Private PublicPremium PublicValue Golfer Base - Est. # of Golfers (Ks) - # of 18 Hole Equivalent Facilities - Golfers per 18-Hole Equiv. PublicPrice Learning & Practice Tot US Index vs. US 409.5 23,400 138 14,672 2,967 1,595 186 Houston, TX CBSA Supply Mix - Private - Pub-Prem - Pub-Val - Pub-Price - Learn & Prac Supply/Demand Balance - '00-'13 Cume Supply Growth/Decline - '00-'13 Cume Rds Demand Growth/ Decline - '00-'13 Cume Mkt Supply Dilution (-)/Absorption (+) Level* - Avg Ann Rds Velocity (Ks per 18-hole vs. ks) Rounds & GF Revenue Health - % Utilization Rate - Avg. Ann. Rev. per Public Regulation EHE ($Ks) - Revenue per Available Round (RevpAR) Future Facility 42% 21% 20% 14% 3% 27% 23% 28% 16% 6% 156 91 71 88 50 9% -1% 9% -12% 100 11 -10% -21% 50 26.8 33.8 79 37% 56% $971.8 $1,155 66 84 $13 $19 68 * 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) February 2015

Table of Contents for the Digital Edition of The Pellucid Perspective - February 2015

TOC
Oro Valley has ‘golden’ opportunity with El Conquistador purchase
Whither golf equipment in 2015: Up, down or sideways?
Notes from 35,000 feet
USGA annual meeting: Nothing earth-shattering
Rival FootGolf groups state their cases
Golf and public policy find common ground
No time to play? Trilogy at Ocala Preserve offers a unique solution
January golf weather impact: Off to a good start relative to ’14
Like oil prices, Houston market hard to figure
Tough week for sports legends

The Pellucid Perspective - February 2015