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Thursday, March 21, 2013
February Golf Weather Impact: No Surprise ... Down Again
As we outlined in the 2012 State of the Industry report, given the phenomenal weather in 2012 (particularly first quarter), February was doomed to disappoint as Golf Playable Hours (GPH) registered down 14% vs. Year Ago (YA) at the national level. For the Year-to-Period (YtD), the GPH comparative measure now stands at -13%. For the YtD period at the national level that is comprised of a breadth ratio of 1:7 with 2 regions having favorable weather against 14 regions with unfavorable weather (3 regions are in the neutral zone of +/- 2% and the remaining 26 regions are out-of-season). Looking at YtD weather impact performance by day-of-week, the unfavorable weather was slightly more skewed to weekdays vs. weekends which is a slight positive mitigation. For the full-year forecast, our February update suggests that the year-to-year weather comparison will give back all of the 2012 favorability.....and then some. 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 Login section at the Pellucid website (go to www.pellucidcorp.com for information or to subscribe).

Looking back on January rounds played (as reported by PerformanceTrak) to calculate the facility % Utilization Rate (UR), rounds demand (-12%) roughly equaled the unfavorable weather (-13%) resulting in a UR level for the month of 51% which is similar to the benchmark 2012 year-end value of 51%. For the YtD period, the figures are the same since January is the YtD.

Jim Koppenhaver comments, "The optimists in the crowd will say that "we held utilization in February" meaning we didn't lose more rounds than the weather unfavorability which is a true statement. January and February are setting up what will be a recurring theme in 2013 which is, "How do we make the most of what we know are going to unfavorable weather comps compared to a near-record weather year in 2012?" The key measure to watch this year will be Utilization because it will succinctly answer how we're doing on that front. 2013 will also place a premium on both planning (use your long-term averages, not year ago) as well as marketing because the average facility doesn't have enough "fat" left in their budget to try and save their way to prosperity this year. We've already begun with our Sharper Edge Marketing clients the challenging planning for this season and how we're going to generate demand against the weather trend in an attempt to hold Utilization. As I said back in 2001, to great industry protest, "This is going to be a battle for share-of-golfer. What you get in rounds increases will rely heavily on how many golfers you can steal from your competition."

On the Golf Fee Revenue (GFR) side via the January PGA PerformanceTrak numbers, they're reporting -11% for Median Total Revenue (similar to the 12% rounds decline which means GF rate-per-played-round was up 1%; this relationship doesn't seem to ever move in the PGA universe, very similar to the Performance Factor where rounds never stray from the Days Open figure). Inferring Revenue per Available Round (RevpAR, or the revenue efficiency of our "factories") by comparing the YtD GFR decline (-11%) against the GPH decline (-13%), it suggests that RevpAR is up slightly (+2%) vs. year ago meaning our efficiency in generating Golf Fee Revenue was slightly better vs. last year.

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 3/18/13.

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, 2012 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

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