The Pellucid Perspective - January 2021 - 15

index). The split between Private/Public is 36%/64% tilts to Private vs. 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 54%/46%
skewing markedly to Value-added golf vs. the national average
of 47%/53% (driven by the Private component). 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 33%/47%/20% which is relatively balanced
to the national picture of 31%/47%/23%.
Using our new methodology for calculating Supply/Demand
equilibrium and how the picture has changed from '00-'19 based
on rounds demand change vs. supply change, you can see in the
table above that Supply expanded a modest 4% over that period,
significantly lower than 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, that modest supply expansion was accompanied by an 11%
rounds demand decline over the '00-'19 period which is higher
than the -7% US level. The confluence of these two factors results
in the cumulative supply dilution resting at -15% or similarly
diluted as the national benchmark of -17%. This suggests that
Cincinnati needs to slim down by ~16, 18-hole facilities to get
back to their '00 equilibrium level (all this changes in the postCOVID world though given the huge spike in rounds demand,

tune into the State of the Industry to understand the " new math "
not yet incorporated into the GLMA).
Looking at the productivity of the average facility using our
proprietary velocity measure, they produce ~ 26K rounds per year
which is right on (98 index) the national average. Applying our
industry-exclusive Utilization measure (played rounds/capacity
rounds), we see that, after weather adjustment, the market outperforms the US " productivity " rate with a 49% Utilization Rate
(116 index).
In summary, Cincinnati as a market has significantly more
" plusses " than " minuses " anchored by a healthy golfer base, good
Utilization and a relatively balanced distribution of supply across
the access/price segments. The current surge in rounds, if we can
hold it, will largely " fix " the supply dilution challenge (OH state
rounds through Nov according to Golf Datatech are +13% vs.
YA) but that's a big " if " long term. Even if they only keep half of
it, erasing half that 15% supply overhang in a 2-year span would
go a long way for the average facility owner/operator in Cinci.
We'll see how '21 plays out for golf as consumers (likely gradually) return to their regularly-scheduled lives and how much of
the COVID endowment we can keep..
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The Pellucid Perspective - January 2021

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