January weather is the first of many ugly comparables vs. 2012 we expect in 2013 as Golf Playable Hours (GPH) registered down 13% vs. the same period last year at the national level (this also becomes the Year-to-Date value since we’re only 1 month into the year). That sets the initial breadth ratio at the national level for the Year-to-Date (YtD) period at 1:2 with 2 regions having favorable weather against 16 regions with unfavorable weather (no regions are in the neutral zone of +/- 2% and the remaining 27 regions are out-of-season). Looking at YtD weather impact performance by day-of-week, the unfavorable weather was slightly more skewed to weekends vs. weekdays. For the full-year forecast, our initial call is that 2013 will give back all of 2012’s favorability which simply means that we’ll return back to the long-term averages (so, no Armageddon but fighting tough “comps” all year vs. 2012). The values for the above two metrics, the monthly timeseries for the entire year as well as market-level Utilization for the preceding month are available to Pellucid Publications Members via the Client section at the Pellucid website (go to www.pellucidcorp.com for information or to subscribe).
Looking back on December rounds played (as reported by Golf Datatech/NGF) to calculate the facility % Utilization Rate (UR), rounds demand (-4%) trailed the neutral weather (+2%) resulting in a UR level for the month of 49% which lags the benchmark 2011 year-end value of 52% by -3 pts. For the YtD period, the UR held its own (51%) and finishes the year down only 1 point comprised of a healthy increase in rounds demand (+6%) slightly trailing even better weather (+8%). At the market level for the YtD period, the UR breadth continued in the negative with a 1:2 ratio of favorable/unfavorable markets (comprised of 9 markets up vs. 14 down and 38 in the neutral zone) as most markets have been unable to keep pace on the rounds demand side against the incredible and broad-based weather favorability.
Jim Koppenhaver comments, “As Stuart Lindsay and I outlined in the 2012 State of the Industry presentation at the PGA Merchandise Show in Orlando, 2013 is going to be a “return to normalcy” as it relates to weather after 2012’s off-the-charts performance. The good news is that our initial forecast suggests that we’ll return to weather more in line with the long-term average rather than getting the whipsaw of a record high year and then an abnormally low year. The bad news is that the “comps” vs. 2012 on revenue and rounds will be ugly nearly every month for most US geographies. Our advice to our clients is to budget off your long-term averages, not year-ago and they’re going to have to get smarter and invest some of 2012’s windfall into intelligent and efficient marketing in order to cushion the “fall” as much as possible. Without weather favorability, the strategy of increasing share-of-golfer and stealing rounds from your competitor among your shared customers (i.e. customers playing your course and your competitor’s course) will become a survival skill in 2013, not a nice-to-do. Our clients have been gearing up in the tools and tactics of this guerilla warfare over the past several years and 2013’s weather environment will be a true test of whether tying customers to transactions, establishing ongoing dialogues and using targeted communications can be the differentiator in a less-friendly weather year.”
As of this publication, the PGA of America hasn’t yet released the December 2012 figures for Revenue and Rounds but, with 11 months in the books, the following reprise on the November YtD numbers will not be far off from the year-end values when they’re reported. On the Golf Fee Revenue (GFR) side via the November PGA PerformanceTrak numbers, they’re reporting flat performance for the month (slightly lower than the 1% rounds increase which means rate-per-played-round was off 1% vs. YA). For the YtD period, GFR is +7% (statistically even with the 7% rounds increase meaning rate-per-round is flat vs. YA). Inferring Revenue per Available Round (RevpAR, or the revenue efficiency of our “factories”) by comparing the YtD GFR gain (+7%) against the GPH gain (+8%), it suggests that RevpAR is off only slightly (-1%) vs. year ago meaning we can explain all of the positive revenue variance within favorable weather.
A broader and more detailed scorecard of the monthly key industry metrics can be found in Pellucid’s free digital magazine, The Pellucid Perspective. To register to get the current and future editions, go to http://www.pellucidcorp.com/news/elist, fill in the information and you will be registered for the next edition on 2/18/13.
Intelligent, curious and courageous industry stakeholders wanting the detailed metrics and monthly updates on weather impact at the national, regional and market level as well as utilization and the full year forecast numbers can subscribe to the Pellucid Publications Membership (Outside the Ropes monthly newsletter, 2011 State of the Industry, Monthly Weather Impact and Top 25 Golf Markets reports) for $495 annually. For individual facility owner/operators who need facility-level history, current year results by month and day-of-week and full year forecast data, Pellucid/Edgehill’s self-serve, web-delivered, real-time weather impact service product, Cognilogic, is your answer. It’s available for $240 for the year-end report and 12 month tracking or $120 for a single year-end report. For more information, contact Stuart Lindsay of Edgehill Golf Advisors (edgehillgolf@msn.com). You can now order either of the above information services via Pellucid’s online store at http://www.pellucidcorp.com/purchase-reports/online-store.
Contact:
Jim Koppenhaver, President, Pellucid Corp.
jimk@pellucidcorp.com
www.pellucidcorp.com
