The Pellucid Perspective - September 2011 - (Page 14)

MARKET FOCUS Seattle, Washington Core Business Statistical Area (CBSA) idden away in the relatively obscure Pacific Northwest is one of the healthiest golf markets in the country, Seattle. The primary factor is the relative supply/demand balance that exists either due to better planning, its relative remote location, good luck or some combination of all three. The Seattle CBSA ranks 25th of the Top 25 golf markets in the US by number of golfers. The moderate golfer base of roughly 252K (about half the size of last month’s featured market of Miami) is served by just 89 18-hole equivalent (EHE) facilities (about 1/3 of last month’s Miami) producing a ratio of just over 2,800 golfers per EHE which is well above the national average. The supply mix skew vs. the national distribution across Pellucid’s five access/value/usage segments shows a favorable skew to affordable, entry-level golf with 21% of supply being Public-Price and Learning & Practice a combined 124 Index vs. the US average. What’s also of interest is that, within regulation length golf, there’s an almost perfect symmetry between Value-added (Private & Public Premium) and Value golf (Public Value and Price) with both groups contributing roughly 47% of supply. Maybe their success is not only in not over-developing but also getting the supply mix right? The change in supply since 2000 has been modest when compared to the US level (5% expansion vs. 14%). Just to show they’re not perfect in Seattle, they did participate in the 1990s “irrational exuberance” movement by expanding supply at an annual clip of 2.4%, but their population growth of 2%/yr helped them absorb that better than the rest of the country. Seattle has not been immune since 2000 to the decline in rounds demand, however, shrinking -0.5%/yr which is on par with the national average. This results in a cumulative dilution rate for existing facilities of 5% which is significantly healthier than the national oversupply situation of 22% since the turn of the century. This means that, compared to 2000, the average existing operator in Seattle has suffered an estimated 5% revenue decline due to supply dilution through some combination of rounds loss and/or rate erosion. The average facility has throughput of roughly 33,000 rds/ yr, only slightly above the national average before factoring in climate and daylight influences. The more accurate measure is Seattle’s 57% utilization, which leads the national average by 4 points. This means, after factoring in the more frequent rain but the longer daylight hours of the northern latitude, facilities in Seattle are more efficient in generating rounds than the “aver- H Private PublicPremium PublicValue PublicPrice Learning & Practice Future Facility Golfer Base – Est. # of Golfers (Ks) – # of 18 Hole Equivalent Facilities – Golfers per 18-Hole Equiv. Supply Mix – Private – Pub-Prem – Pub-Val – Pub-Price – Learn & Prac Seattle, WA CBSA Tot US Index vs. US 251.7 26,600 89 15,929 2,828 1,774 27% 20% 31% 15% 6% 29% 20% 33% 13% 4% 159 93 100 94 115 150 33 6 23 104 107 146 131 Supply/Demand Balance 5% 14% – ’00-’09 Cume Supply Growth/Decline –1% –8% – ’00-’09 Cume Rds Demand Growth/ Decline –5% –22% – ’00-’09 Cume Mkt Supply Dilution (-)/Absorption (+) Level* – Avg Ann Rds Velocity (18-hole Equiv.) 32,900 31,512 Rounds & GF Revenue Health – % Utilization Rate – Avg. Ann. Rev. per Public Regulation EHE ($Ks) – Revenue per Available Round (RevpAR) * Period % Chng in Rds vs. Period % Chng in Supply 57% $1,439 $21 53% $983 $16 Above average level vs. US (Index 105+) Average level vs. US (Index 95-104) Below average level vs. US (Index <95) age” golf facility nationally. On the revenue productivity side, Seattle generates just over $1.4M per public, regulation length EHE, which is 46% higher than the national average. After factoring that for weather influence, Seattle’s Greens Fee Revenue sePTember 2011 14 The Pellucid PersPecTive

Table of Contents for the Digital Edition of The Pellucid Perspective - September 2011

The Pellucid Perspective - September 2011
Contents
The China syndrome
Shift happens: The impact of Hispanic growth on local golf markets
Promoting rounds at rate card — a novel concept?
Promoting rounds at rate card — a novel concept?
There’s golf in them thar’ (sand) hills
August weather impact, July utilization
Seattle, WA Core Business Statistical Area (CBSA)
Seattle, WA Core Business Statistical Area (CBSA)
The long and the short of it

The Pellucid Perspective - September 2011