The Pellucid Perspective - July 2016 - (Page 13)

MARKET FOCUS Cleveland's favorable supply "trumped" by low revenues Cleveland, Oh Metro Core Business Statistical Area (CBSA) I n this monthly section we profile one of the Top 25 US Golf Markets based on a Pellucid composite score of the golfer base, supply level and rounds demand. Within that Top 25 universe, we then rank them based on relative health using a Pellucid weighted scoring system of 8 variables ranging from Population Growth to Estimated Profitability-per-Available Round. In this issue, we'll profile the 23rd healthiest market, the Cleveland Metro Core Business Statistical Area (CBSA). We wish we could take credit for incredible planning to make Cleveland come up timing-wise the month of the Republican National Convention but, truth is, it was just dumb luck. As proposed in a recent Wall Street Journal article, Cleveland will likely be known (for the next 30 years or so) as the capital of government economic development. (The article provides this description: "the 20-block surrounding the Downtown Cleveland Hilton should be called the "Government Subsidy District." , pointing out as support that the Hilton is actually owned by Cuyahoga County)). Somewhat ironic that it will host the Republican vs. Democratic convention but, in this election year, those types of ironies are rife. There are not many places where you can be the home of the reigning NBA Champions and it becomes, at least for the next month, but a footnote for the upcoming drama. What we're interested in this section however is whether Cleveland is a good, average or marginal economy for golf. By rounds demand (one of our 3 selection criteria for initial inclusion in the Top 25 list), the Cleveland CBSA ranks 21st among US markets with facility-reported annual demand of just over 3M rounds. (That facility-reported tally counts both local and tourist play). Looking at the golf consumer base, we see that it's home to a healthy local golfer base of roughly 0.2M golfers (ranking 25th in the US, remember this is only local, resident population, doesn't count any tourists that trickle into the city for business meetings or the summer tourist base). That golfer base is served by a reasonable supply amount of 116 18-hole equivalents (EHE) producing a healthy ratio of roughly 1.7K local resident golfers per EHE, slightly above the national average. The supply mix vs. the national distribution across Pellucid's five access/value/usage segments shows a strong skew right down the middle (Public-Value) compared to the US average. The Private vs. Public access balance is 25%/75% which is in line with the national average of 27%/73%. The balance of Value-added golf supply (Private & Public-Premium) vs. Value golf (Public-Value, Price and Learning & Practice) is 47%/53% which tilts slightly to Value golf vs. the 50%/50% national distribution. Within Public-Regulation golf, the distribution between Premium/Value/Price is 32%/57%/11% vs. the national picture of 34%/42%/24%, which shows that the Public-access www.PellucidCorp.com Private PublicPremium PublicValue Golfer Base - Est. # of Golfers (Ks) - # of 18 Hole Equivalent Facilities - Golfers per 18-Hole Equiv. PublicPrice Learning & Practice Cleveland, OH 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) (EHE) Rounds & GF Revenue Health - % Utilization Rate - Avg. Ann. Rev. per Public Regulation EHE ($Ks) - Revenue per Available Round (RevpAR) Future Facility Tot US Index vs. US 202.8 22,900 116 14,672 1,748 1,561 112 25% 22% 40% 8% 5% 27% 23% 28% 16% 6% 93 97 143 48 79 5% -8% 9% -12% 57 67 -13% -21% 63 25.5 26.7 95 49% 56% $786 $1,155 $16 $19 88 68 84 * Inverse index, lower is better ** Period % Chng in Rds vs. Period % Chng in Supply Above average level vs. US (Index >105) Average level vs. US (Index 95-104) Below average level vs. US (Index <95) regulation supply skews heavily to the Value segment (57% local vs. 42% nationally). Remember that in this particular analysis Pellucid allows the definitions of Premium/Value/Price to "float" across each of the markets driven by the local market The Pellucid PersPecTive 13 http://www.PellucidcorP.com

Table of Contents for the Digital Edition of The Pellucid Perspective - July 2016

Toc
A Peek Inside the Golfnow Kingdom: Revealing but Not Shocking
Bad Rap?
PGA, Tourgolf Team to Promote Play and Revenues at Pga Facilities and Events
Landscapes’ Success Unlimited by Industry Shifts
June Golf Weather Impact: June Up Marginally; May Utilization Lags
Cleveland’s Favorable Supply “trumped” by Low Revenues
A Long, Very Hot Summer for the USGA

The Pellucid Perspective - July 2016