The Pellucid Perspective - August 2024 - 7

The challenge, as we all know now in hindsight, is that the Tiger
effect was fleeting and I guess one could make the argument
that Tiger's fading performance (not popularity) contributed to
the next 12 years' doldrums for golf as we gave all those golfers
and rounds back hitting post-Tiger nadirs of ~20M golfers and
~440M rounds. To satisfy my curiosity on how the COVIDend
compares to the Tiger surge, I went back and did the same type
analysis for the period '20-'23 and I can tell you that, for both golfers
and rounds, COVID is " smoking " the Tiger surge through the
initial four years but we'll have to see how that story plays out. I'll
do that comparison in an upcoming Outside the Ropes but you'll
have to pay to see those cards by subscribing (ha, ha).
The next industry belief we'll put some numbers to is, " Supply
begets demand " . You'll likely recall that this was one of the
fundamental underpinnings of build-a-course-a-day; the fact that
growth in golfers and rounds was being choked off by a lack of
availability of a tee time for some number of golfers some number
of days in the US. In fairness, getting a weekend primetime
teetime was a challenge in many markets during this period but a
painful lesson we learned (should have realized) is that you can't
make a golf course pencil out if its primary role in the market is to
service weekend demand overflow. Here's what the tale-of-thetape
looks like on this experiment:
on Public-Value golf and that's the 18 holes it needs. " Everyone
wanted to build Public-Premium so you can see the genesis of
the trainwreck there of " right quantity, wrong type " . What we've
learned over 15+ years of building and refining the GLMA is the
normal distribution of supply for Public, Regulation-length golf
within " local golf-driven " markets is 30% Price/40% Value/30%
Premium so that's a fairly established and stable yardstick we use
when doing a market evaluation for new entrants or purchasers of
existing golf courses. Net answer, we have no quantifiable proof
that building more supply magically grows golfers or rounds.
The final, more fun (and tougher) industry storyline to fact
check is " TopGolf creates new conventional golfers " . Before I
show you the figures, I'm going to state that obtaining and aligning
figures on this is equal parts of math and magic. The more I
delved into public domain information on the visitor counts for
Topgolf, the less and less I could find from trusted sources and/or
get the figures from any sources to align. Colleague Stuart Lindsay
took a pass at this in our '18 State of the Industry and I " borrowed "
a number of his researched facts as the foundation for this
" best guess " approach to whether Topgolf has been a significant
contributor to the new golfer ranks:
* To address this " latent need/demand " , during the fiveyear
period I selected which was the pinnacle of the
building boom, we built ~700 more 18-hole equivalents
(EHE, falling short of a-course-a-day but we were trying
really hard) and were rewarded with 32M fewer facilityreported
rounds of golf (oops)
* Part of that was attributable to the fact that the golfer
base was shrinking while we were busy building supply
(something the industry advisors were either failing to
reveal or unaware of), shedding ~2M golfers during that
stretch
This scorecard should put a stake in the heart of golf's version
of Field of Dreams, " If you build it, they won't necessarily come. "
Now I know some of you are going to say, " ...but Chambers Bay "
and yes, I agree that there have been isolated incidents where vision
led reality but those have been the exception vs. an established
pattern of success and criteria to figure out where to plant dreams.
The other challenge that I saw in the early 2000s when we built the
first Golf Local Market Analyzer, was very few people wanting to
create new supply were paying attention to the distribution of golf
supply by type in markets. They would get their feasibility study
from the leading industry (association) provider and it would say,
" Yes, you could put 18 more holes of golf here. " What they either
didn't know or didn't say was, " The draw area is under-developed
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* Stuart's take in the '18 SoI was, " Topgolf has had tens of
millions of visitors in recent history, if they're introducing
golfers to green grass, we should see hundreds of
thousands of new-to-sport golfers simply as the " exhaust "
from Topgolf's success and growth "
* In the above table, I've made triangulated estimates of
the total visitors to Topgolf (US) from '18-'23 which is an
impressive 131M cume. Interesting side note, I had one
of my sons run an AI query on " Topgolf visitor counts
over time " vs. me spending an hour or so surfing the web
looking for individual years from multiple sources and
evaluating which ones were reliable. While the figures
weren't, IMO, 100% reliable or consistent, they provided
another datapoint (in seconds) for me to pressure check
my going-in assumptions by and they're one of the
factors used to create the Guesstimates (ha, ha, couldn't
resist) in the first line above
* From information on Topgolf's website historically
( " Fun Facts " ), they previously stated that ~51% of visitors
identify as non-golfers (haven't previously played the
game on a golf course). So...I factored down the guest
count to come up with the " uninitiated " or ~67M cume
* Here's where it gets tricky. Golf pre-Topgolf was doing a
decent job of attracting non-golfers all by itself and that
number was, conservatively, between 2.5-3.5M/yr. So...I
set '18, which was in that range, as a baseline (we're going
to get those folks with or without Topgolf and then I
gave everything above that baseline to Topgolf)
*
That produces the Topgolf Converts estimated increment
The Pellucid PersPecTive
7
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The Pellucid Perspective - August 2024

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