Golf Operation Analysis
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Course Utilization (CU) & Revenueper-Available Round (RevPAR)
Local Demographic Adjustment Indices
A Pellucid/Edgehill proprietary methodology for calculating weather impact on a rules-based, nationallyapplied methodology around the variables of in-season, daylight hours, temperature (absolute & relative), precipitation, wind speed and other variables. Using the above factors, we have developed standardized and consistently-applied rules for what constitutes a Golf Playable Hour (GPH). We partner with nationallyacclaimed AccuWeather and their underlying data from over 5K stations nationally for which they have 10-yr historical data at the hourly level up to yesterday. By applying our rules to their dynamic weather data and tying each US golf course to its nearest weather station, we calculate GPH for each and every course for various periods (current month, current year, previous 2 years, 10-year Normal etc.). We apply a constant throughput of 28 rounds per hour (uses alternating 8 and 9 minute tee time as our arbitrary but consistent standard) to extend GPH to Capacity Rounds. For example, at the national level for the year 2017, the average US facility had ~2,232 GPH which translates to Capacity Rounds of ~62,500 annual. CU then becomes the simple calculation of Played Rounds/ Capacity Rounds. RevPAR becomes the similarly simple calculation of Total Revenue (or Golf Fees Revenue)/Capacity Rounds. Given that we use weather specific to each facility and a constant throughput for GPH, facilities of any type and geography can be comparatively measured for productivity (CU). For financial performance one has to consider that the lower Greens Fee and average total ticket for facilities <18 holes are going to be lower in RevPAR than facilities that are 18 holes or more.
Because the participation data applied is at the state level (lowest geography due to incidence rates and lack of industry support for larger annual survey), we need to acknowledge how the local market/draw area demographics differ from the state distribution (for ethnicity, this data is only stable at national level so we’re factoring how the local ethnicity mix compares to the national number to create this index value). We know that the Play Rate (annual rounds per capita) varies widely across these three key demographic breaks: •• Income - participation correlates highly to household income, the higher the income the higher the participation rate and frequency •• Age - rounds played frequency correlates highly to age (older is better) so the presence of seniors in a geography will positively impact the estimated rounds played •• Ethnicity - participation varies widely across the 4 key groups from the highest (White/Caucasian followed by Asians) to lowest (tie, African Americans and Hispanics). We apply these differential Play Rates to the distribution of the population by to create Rounds Potential estimates. If the demographic distribution in the chosen market or draw area matches the state distribution, the indices for Income, Age and Ethnicity will all be 100. If an area has a higher household income bias, the Income index will be >100. If an area has a higher concentration of African Americans than the state benchmark, then the Ethnicity index will be <100. When these indices are applied to the rounds estimates coming, they will either inflate (Index >100) or deflate (Index <100) the results due to the locality’s demographic differences and their impact on golf participation.