The Pellucid Perspective - April 2020 - 16

MARKET FOCUS

Detroit, the indefatigable
market faces down
another challenge
Detroit-Warren-Dearborn, MI
Core Business Statistical Area (CBSA)

n this monthly section we profile one of the Top 25 US Golf
Markets based on a Pellucid 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 of 7 variables ranging
from Population Growth to Avg. Facility Utilization. In this
issue, we'll profile the 13th-ranked market, the Detroit-WarrenDearborn MI Metro CBSA. Our hearts and prayers go out to
Motown as it wrestles with the COVID pandemic and particularly for the minority communities which are suffering disproportionately from the data that has been released. For a city
that has fought back from a dramatic downsizing of its primary
employment and economic engine (bad pun) and a pioneering
bankruptcy proceeding, the resiliency of Detroit's citizens is
battle-tested and proven and we're sure that they will come together and rally, with the support of the nation, to emerge from
COVID stronger and forge a path to successful recovery.
By rounds demand (one of our 3 selection criteria for initial
inclusion in the Top 25 list), Detroit punches above its composite ranking weight coming in 10th among US markets with
facility-reported annual demand of roughly 5.5M rounds (that's
facility-reported, through-the-turnstiles tally counts both local
and (limited) tourist play). Looking at the golf consumer base,
we see that Detroit is home to a healthy local golfer base of over
500K golfers (this is local, resident population only, doesn't count
any of the golf tourist crowd). That golfer base is served by a
healthy supply base of 217 18-hole equivalent (EHE) facilities
producing an average ratio of over 2K local resident golfers per
EHE, a very healthy level at ~1.5x the national average.
The supply mix vs. the national distribution across Pellucid's
five access/value/usage segments shows a meaningful bias to
the Public-Premium segment at 29% of holes (a 154 index vs.
the national contribution). The split between Private/Public is
23%/77% which is significantly more skewed to Public than the
national average of 28%/72%. The balance between Value-added golf supply (Private & Public Premium) vs. Value golf (Public Value, Price and Learning & Practice) is 52%/48% skewing
slightly to Value-added golf vs. the national average of 47%/53%.
Remember also that we establish the Premium/Value/Price segments by individual market so that's factoring in differences in
cost of living/cost of golf as we cross markets (unlike NGF where
Manhattan NY has the same price segmentation as Manhattan
KS, go figure). Within Public-Regulation golf, the distribution
between Premium/Value/Price is 42%/32%/27% which meaningfully "tilts" the direction of Public-Premium vs. the national

16 The Pellucid Perspective

Private

PublicPremium

PublicValue

PublicPrice

Learning
& Practice

Future
Facility

Detroit-Warren-

Tot US
Dearborn CBSA
Golfer Base
- Est. # of Golfers (Ks)
521.2 25,500
217 16,749
- # of 18 Hole Equivalent Facilities
2,402 1,535
- Golfers per 18-Hole Equiv.

Supply Mix
- Private
- Pub-Prem
- Pub-Val
- Pub-Price
- Learn & Prac
Supply/Demand Balance
- '00-'17 Cume Supply Growth/Decline
- '00-'17 Cume Rds Demand Growth/
Decline+
- '00-'17 Cume Mkt Supply Dilution

(-)/Absorption (+) Level*+
Av. Facility Throughput & Efficiency
- Avg. Ann Rds Velocity (Ks, per EHE)
- %Utilization Rate

23%
29%
24%
19%
6%

28%
19%
29%
14%
9%

5%
-7%

11%
-7%

-12%

-17%

25.3
47%

26.5
42%

Index
vs. US

156
84
154
78
136
63

95
113

* 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)

picture of 31%/47%/23% (at the expense of Public-Price).
Using our new methodology for calculating Supply/Demand
equilibrium and how the picture has changed from '00-'17 based
on rounds demand change vs. supply change, you can see in the
table above that Supply expanded 5% over that period compared
to the national average of 11% (a Compound Annual Change
Rate (CACR) of roughly 0.6%). On the facility-reported rounds
demand side of the equilibrium equation the modest supply expansion during that period was exacerbated by a rounds demand
decline of 7% over the '00-'17 period (same as the 7% national
April 2020

The Pellucid Perspective - April 2020

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