Last Update :1/3/2019

Dec OtR Abstract: '18 Forgettable, but not as bad as it looks

Volume 17 • Number 12

2018: Still Looking for that Elusive Industry “Bounce”

This will be an abbreviated issue due to the holiday season but I’ll provide a preview of the ’18 State of the Industry for our subscribers for the key metrics that are already known or can be reliably projected with 11 months of history in the books.  For those who had earlier predicted the rebound of golf in tandem with an improved American economy, I’m sorry to say that storyline isn't panning out for us collectively.  This debunks yet another NGF historical myth that “the golf industry trails the economy into recessions and leads the economy indicators out in a rebound” (Joe Beditz slide/quote at one of the PGA Show presentations circa '10).  While I can’t argue that improvements in the average Americans’ employment and earnings are helpful to a sport that requires discretionary time and income, the ~3%+ growth in GDP estimated for ’18 will not be enough of a force to offset, let alone reverse, the macro industry trends of slow and steady attrition.

In this issue we’ll take a quick tour of the key metrics for Utilization, Velocity and Play Rate:

  • Utilization – will finish up for '18 as the result of played rounds declines that were shallower than the decline in capacity rounds.  This is one we missed, in January we were forecasting a 1% decline in capacity rounds vs. ’17 and we got a 5%+ decline.  The Utilization gain is a bright spot in the overall year’s results
  • Velocity (average played annual rounds per 18-hole equivalent) – Will once again be down as a result of the meaningful decline in rounds offset by only fractional supply contraction (<1%)
  • Play Rate (annual rounds per capita) – The Play Rate continued to crumble, the result of marginally fewer golfers amidst a slightly higher population and playing at a lower frequency.  The relative stabilization in the golfer count is encouraging but couldn't overcome the meaningful frequency decline (new worry, but weather impact is a mitigating factor as I'll quantify)

Anecdotally, I believe there’s another positive metric beneath the surface but for which we have no quantitative support.  That is average price metric which I believe was up for the industry compared to ’17 based on the financials of our client courses and supported more broadly by colleague conversations throughout the year.  This highlights the hole left by PerformanceTrak and yet to be filled by ORCA or other industry initiatives which would tell us if the increase in average price was enough to fully offset the 5% rounds decline and produce flat revenue (golf or total) for the average facility.  For our subscribers, read on to get the facts and insights supporting these summary results. For our Executive Summary recipients, you can be "in the know" one of three ways (all can be previewed and purchased at Pellucid's website

  1. Subscribe to the Pellucid Publications Membership  for $495/yr.  Annual subscribers get access to all Pellucid publications (Outside the Ropes monthly digital newsletter, annual State of the Industry report portfolio (PowerPoint presentation, PDF commentary report, access to Orlando video of presentation), monthly Geographic Weather Impact Tracking (US, 45 regions, 61 markets), Top 25 US Golf Markets Ranking Scorecard (25+ dimensions and ranking for largest 25 markets) and the National Consumer Franchise Health Scorecard (expanded data and tables underlying the SoI's summary figures)
  2. Subscribe to OtR, 12 monthly issues for $130/yr with a money-back guarantee if you're not satisfied at any time during your subscription.  Subscribers also get access to the historical archive of past issues (50+) via the members-only section of the Pellucid website.
  3. Purchase single issues (including this one) for $14.95 per issue; click here to view available issues by title and select those of interest to purchase and download

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