The Pellucid Perspective - November 2023 - 8

TECH TRENDS
We could stop here - if your weather adjusted course utilization
is over 70% and rounds are up over 21% (since 2020); your
course is performing well. Since all the courses we work with
have raised prices and assume most courses have done the same;
that means your revenues should also be up by more than 21%.
Unfortunately, another year of good performance doesn't
guarantee 2024 will automatically follow suit. It also doesn't tell
you whether you have upside rounds potential or room to further
boost prices.
Also, as you can see in the above table, the reduction in tee
space inventory coming from course closures is not equal in
all geographies. When we pulled the data from all 50 states;
we also looked at golf participation rates, demographic factors
(Age, Ethnicity and Income) and annual rounds frequency. We
also have rounds demand history and golfer base history that
vary wildly over all the states. Some areas have experienced better
rounds demand with no growth in the actual golfer base.
Some areas have seen growth in the golfer base, but declining
frequency. These variances are even more noticeable when you
run a Golf Local Market Dynamics report using, for example,
10, 20 and 30 minute drive times around your facility (Pellucid
has that data for your facility).
For example, Michigan has seen a remarkable recovery after
losing golfers over the last 20 years. On the other hand, Wisconsin
normally pretty much mirrors Michigan - fortunately,
the loss of Badger golfers has been mostly offset by higher frequencies.
Part of the answer may be that Michigan has had a
slightly higher than average closure percentage while Wisconsin's
closure rate is below the average; but it really means that
the Cheesehead market will likely be more competitive in the
future.
As we reviewed all the states, the most glaring issue is that
8 The Pellucid PersPecTive
Golf Participation has not gone up as much as rounds demand.
Yes, we have attracted about 2M new " net " golfers, but that is
only +10% compared to the 21% increase in rounds demand.
The higher frequencies that accompany that data makes it even
more important that we retain our existing golfer base into the
future. See charts above.
Returning to the debate issue regarding the impact of digital
golf options on green grass traditional golf; the data would
suggest that there has been an overall positive effect. While we
are not aware of any specific research tracking whether our new
golfers are all coming from the digital options; we certainly can't
say that all these new options are hurting green grass rounds
demand and/or golf participation.
To confuse the issue, we also know that 70+M (including
an estimated 35M non-golfers) pre-Pandemic visits to TopGolf
did not move the needle on golf participation. While the
Pandemic may have been the catalyst; we still need to factor
in our " new golfer " research which indicates that the younger
new players have higher frequencies than beginners in the past.
Based on our conversations with Full Swing, aboutGolf and
others; there have been at least 5,000 - 10,000 simulators installed
since 2019, with about 75% going to " commercial use "
venues. This is actually amazing since every simulator effectively
represents a golf course in terms of tee space inventory - actually
more because they can operate at night.
When I drove past XGolf the other day, I noticed that they
had added some new, prominent signage - " Play, Train, Entertain " .
That's a pretty good summary of what these digital options
offer. My daughter and her friends using TopTracer have
also improved - they all are playing better, and having a lot more
fun, when we venture out to a real golf course. Our hypothesis
is that there are many facets to these new digital options and it
November 2023
The Pellucid Perspective - November 2023

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