The Pellucid Perspective - December 2021 - 4

Industry
Performance
nationally) or fall short. Using Pellucid's projection off the
Golf Market Research Center (GMRC) participants' submitted
results for November, we eclipsed last year's number and
still have a month to go to add to the " overage " .
Let's look at what went right (for the industry and team
Merchant/Lindsay) or wrong (for Team Koppenhaver) in retrospect
en route to this amazing and unexpected outcome:
* Q1 - I had anticipated that we'd play roughly to a
draw vs. '20 due to Q1 '20 being relatively healthy
(until 3/15 when all the lockdowns went into effect)
and Q1 '21 continuing the '20 Q4 momentum. As
you can see in the above table, we came out of Q1
with a ~13M rounds " surplus " to '20 or +20%. This
meant that 20's momentum was actually increasing
in Q1 vs. stabilizing. Advantage team Merchant/
Lindsay
* Q2 - I had anticipated that we'd go soaring over '20
due to the Apr-May restrictions across many of the
US states and we did, adding another 26M rounds
of excess to '20 (+21%) so we ended H1 39M rounds
over '20 (wow, Jim's " oh s*** " moment)
* Q3 - Where I made my biggest error was that I
thought COVID would largely be in the rearview
mirror by July '21 and, with the return of all the other
recreational, sports, entertainment and dining options
back on the discretionary time " buffet " , that we'd see
a 15-20% decline in rounds vs. '20. In addition, I
thought that much of the workforce would be back
in office and commuting which would wipe out some
number of " convenience " rounds that we've enjoyed.
To this day, we're still largely remote as a workforce
which extended this play flexibility benefit into the
Fall. You can see in the table that we did see our first
instance of negative comps but demand was more
resilient than I had anticipated by 2-2.5x. The 12M
" giveback " vs. '20 only put a dent in the H1 surplus
so we ended Q3 still +27.6M to the good. Given the
amount of volume concentrated in the first 3 quarters,
the bottom would have to fall out in Q4 to now fail to
match '20
* Q4 - I thought we'd see a repeat of 15-20% decline vs.
'20 and, even in defeat, it looks like our Q4 is " only "
going to be down 7-11% so the demand resilience
continues but it is showing quarter-to-quarter erosion
increases, wiping out another 11M rounds of the
surplus
4 The Pellucid PersPecTive
So the good news for the industry in general (and Pellucid,
we tend to be healthier when our clients are making money
and we're not telling them how bad things are) is that the
COVID surge in demand is proving to be more durable than
I had anticipated. To be fair, part of that is being driven by
the nagging persistence of COVID variants and the various
health agencies/states requirements on protection and movement
that go along with the continued uncertainty. Even so,
I'm encouraged by the fact that we've now captured the attention
and interest of some number of people to play the sport or
play it at increased frequency for two consecutive years which
should give us more insulation from defection than the " 1-year
wonders " that plagued us pre-COVID.
What we still don't know, but we're planning to explore and
quantify, is how much of this demand durability is regular golf
participants (we're calling them Veterans) playing at a higher
frequency and how much is New/Returning golf participants
and their accompanying frequency. As we outlined in last year's
SoI, our hypothesis is that the bulk of those rounds are coming
from Veteran golfers but with significant help from Lapseds and
Rookies. I had opined at the time that this would likely bode better
for the industry due to the historically fickle nature of our new
and low-involvement golfers. It is possible though that we're getting
more contribution from the non-Vets and that they're proving
more dedicated and loyal in this current cycle than previously.
Answering that question more quantitatively will provide the key
to the subsequent question we're asked weekly, " At what level will
we settle and can that level be sustained ? " (or, dare we say it, grow
from there?) We'll have more on this at the State of the Industry
(SoI) end of January as well as the yearend '21 final number. For
those of you who grabbed your calculator to sum up the above
table, yes it's projecting we'll eclipse half a billion rounds but we'll
leave it at that for now.
Speaking of the SoI, our tentative plan will be to hold
either an in-person or webinar (or both) on our traditional
Thursday of the PGA Show week (1/28/22), this year from
10AM-11:30AM EST. In a slight twist from last year, where
we welcomed Pellucid clients at no charge and non-clients for
a fee, we're currently considering just limiting the SoI to Pellucid
clients so the price-of-admission would be becoming a
Pellucid client. To simplify it, that would mean three options
for participation:
* Pellucid Publications Membership National - For the
majority of industry stakeholders who aren't facility
owner/operators, this provides annual distribution
and access to all our publications (Outside the Ropes,
December 2021
The Pellucid Perspective - December 2021

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