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The torrid pace of favorable weather through May took a breather in June after 5 months of double-digit gains as Golf Playable Hours (GPH) registered +0.3% (statistically flat) vs. last June at the national level.
That slightly eroded the national Year-to-Date (YtD) GPH favorability to +17% vs. the same period year ago. The regional breadth for the YtD period continues to be widely favorable at 13:1 with 38 regions having favorable weather against 3 regions with unfavorable weather (the remaining 4 in the neutral zone of +/- 2%). Looking at performance by day-of-week, weekday weather continued to be the slightly more dominant factor in favorability which is slightly less beneficial to the average operator due to the rounds and rate differentials. For the full-year forecast, we saw a slight uptick in the full year GPH forecast suggesting that we’ll get to keep the bulk of this early-season weather “dividend” when the books close in December. The values for the above two metrics 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 May rounds played (as reported by Golf Datatech/NGF) to calculate the facility Utilization Rate, it comes out as the first Utilization gain month for the year. The May Utilization registered at 54% (comprised of a 8% increase in Played Rounds against a 6% increase in Capacity Rounds) which is 2 points higher than the 2011 year-end value. In other words, May’s rounds demand exceeded the weather favorability. For the YtD period however, Utilization still lags year-ago due primarily to the abnormally high weather favorability. At the market level for Utilization we continue to see negative breadth with a 1:1.2 ratio of favorable/unfavorable markets comprised of 17 markets up vs. 20 down and 24 in the neutral zone. This suggests that the mosaic of weather variance at the key market level is slightly more nuanced (to the downside) than the more macro regional view and we’re seeing more separation between “winners” and “losers” in Utilization.
Jim Koppenhaver comments, “The more greedy among us would probably be disappointed that June didn’t continue the robust favorability that we’ve seen through May. Like my golf game however, while a bogey isn’t a par, it isn’t the dreaded double bogey either so the more realistic among us are pretty happy and satisfied that we logged neutral weather for a key play month in the season. One of the things that may adversely impact the neutral weather results when the June rounds played figures come out is that large portions of the country experienced extended, record heat and lack of rain which most likely will depress rounds and may not be captured in the weather impact calculations (we have rules for extreme temperatures but not drought, all part of the process of finding a balance between precision and economic reality). Importantly however, our Cognilogic clients with real-time, web-delivered, self-serve weather impact reports can quantify for their management and owners how much of the current rounds and revenue favorability is due to weather and how much of it is due to superior marketing and operations (for those on the front lines brave and confident enough to want to know at least). What’s comical is the continuing stream of industry commentary on performance from facility to national level which gives all the credit for this season’s success to the weather with absolutely no quantification or substantiation of the facts. We can tell you however that there are at least 25+ operators who are beating the robust weather through June because we know and are contributing to their results (they’re called Pellucid Sharper Edge Marketing Services clients).”
On the Golf Fee Revenue (GFR) side via the May PGA PerformanceTrak numbers, they’re reporting a +9% gain for the month (slightly lagging the 10% increase in rounds meaning a marginal drop in rate-per-round vs. YA). For the YtD period, GFR registered +17% also reflecting a lagging rate (by comparing this result to the 19% rounds increase producing a rate decline of 2% vs. YA). Given the much stronger May YtD GPH results vs. GFR (+24% GPH vs. +17% GFR), it suggests that Revenue per Available Round (RevpAR, or the revenue efficiency of our “factories”) is lagging last year and all of our GFR favorability can be explained by weather (vs. the industry “saw” of superior management, marketing and operations).
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 7/18/12.
