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Golf Industry in 2010
Turning the corner or just another blind dogleg?
Stuart Lindsay29 June, 2010 © 2010 Edgehill Golf Advisors
Macro Economics
• Stocks peak 3rd Quarter of 2007 and start to tank signaling the start of Recession.
• Housing market collapses in tandem
• Huge net worth destruction on 2 fronts.
• Recessions always have a negative impact on both travel and recreation based on discretionary spending.
• Recession technically ends in 1st quarter 2010
• However, stock market has only recovered ½ of value lost in Recession
• Housing starts and Sales of Existing Homes continue slow, meaning no recapture of home equity values lost during recession.
• Consumer spending is showing signs of life, but will be conservative (NML Study, June 2010)
Hot off the PressConsumer Fundamentals from NSGA
• We had a “net” loss of 700,000 golfers in 2009.
• Rounds stayed steady on a “weather neutral” basis.
• This actually means that the average annual frequency per golfer increased !!
Positive Growth in the “Avid Golfer” Segment
• Loss of participation is in the groups of casual involvement
• The growth in the “committed” group is consistent with demographic trends (aging Boomers)
• Overall results are sideways, but that is not necessarily a bad performance.
2009 Rounds
2010 Rounds YTD through April
2009 and so far in 2010 Not Kind to Resort Areas
2009
National - 0.6%
Hawaii - 12.8%
Phoenix - 1.4%
Las Vegas + 3.4%
Orlando - 3.1%
Myrtle Beach - 5.0%
Hilton Head - 1.5%
2010 (Jan – April)
National - 3.0%
Hawaii - 15.1%
Phoenix + 2.0%
Las Vegas - 4.0%
Orlando - 9.9%
Myrtle Beach - 1.8%
Hilton Head - 6.6%
Has the recession ended for golf?The answer is mixed after we look at the
Weather.• We look at Weather in a
variety of ways with a set formula of static data points (monthly, day of the week and Year to Date)
• If we look at Orlando through the first half of the year, they lost a lot of Playable Hours to poor weather
• Orlando’s 1st four months were off 9.9% - the same amount as their rounds decline
JAN 166 196 -15%FEB 158 198 -20%MAR 205 245 -16%APR 264 241 9%
HISTORY - Golf Playable Hours
1,260
1,280
1,300
1,320
1,340
1,360
1,380
1,400
1,420
1,440
1,460
201020092008NORMAL
Weather had a major impact to start 2010
2010 (Jan – April) Rounds WeatherNational - 3.0% + 4.0% Hawaii - 15.1% - 4.3%Phoenix + 2.0% - 1.7%Las Vegas - 4.0% - 2.6%Orlando - 9.9% - 9.9%Myrtle Beach - 1.8% - 8.0%Hilton Head - 6.6% - 10.7• With the exception of Hawaii and Las Vegas, the others out-
performed the weather.• While nationally the northern climate courses got an early break of
favorable weather, warmer resort areas have mostly been hammered with very poor weather to start 2010.
You’ve never met a one-armed Economist
On One Hand• The Recession is
supposedly over• Resort areas have out-
performed poor weather to start 2010
• Consumer spending is picking up
On the Other Hand• The recovery is “shallow”• We have only recovered
a portion of the household wealth destroyed in the stock and home equity markets.
• Consumers appear to be taking a conservative approach to spending.
Golfer/Consumer FundamentalsDo Resorts all Chase the Same Consumers?
Are they really the same?
Bucket List Golfers
1. Affluent
2. Avid Golfers
3. Want to play as many top courses as possible
4. More likely to come from public golf ranks
Comfort Golfers
1. Affluent
2. Avid Golfers
3. More likely to return to same resort every year
4. More likely to come from private course ranks
What both Types Have in CommonAffluent, Avid and Older
• Golf Population and rounds played is skewing older – This is being confirmed as we see our projection of 50% of all golf being played by golfers over 55 in 2010 holding true.
• Golfers are becoming more concentrated in higher income levels
• Internet Adoption not keeping pace with other industries
• Internet Usage 55+ = 55.9%*• Internet Usage All = 71.0%*• Golf’s primary market segment is
using the Internet 21.4% less than the general population
*Source: Pew Research
% of Golf Rounds By Age-2010
30%
21%
50%
Age <40
Age 40-54
Age 55+
6%6%
11%
18%
25%
34%
4%4%7%
12%
24%19%
30%
4%4%
6%
11%
23%20%
32%
2000, 2006, 2007 Golfer Composition by HH Inc.
<$15K
$15-$24.9K
$25-$34.9K
$35-$49.9K
$50-$74.9K
$75-$99.9K
$100K+
You Have to Market to both GroupsCustomer Information is Key
1. Who are our customers?
2. Do they come back?3. How often do they
return?4. What % of our revenues
does each group represent?
5. What customer Information have we collected? (Name, Address, Phone, Email)
Where do my Customers Really Come From?
AlabamaAlabamaAlabamaAlabamaAlabama
AlaskaAlaskaAlaskaAlaskaAlaska
ArizonaArizonaArizonaArizonaArizonaArkansasArkansasArkansasArkansasArkansas
CaliforniaCaliforniaCaliforniaCaliforniaCalifornia
ColoradoColoradoColoradoColoradoColorado
ConnecticutConnecticutConnecticutConnecticutConnecticut
DelawareDelawareDelawareDelawareDelaware
FloridaFloridaFloridaFloridaFlorida
HawaiiHawaiiHawaiiHawaiiHawaii
IdahoIdahoIdahoIdahoIdaho
IllinoisIllinoisIllinoisIllinoisIllinois
IowaIowaIowaIowaIowa
KansasKansasKansasKansasKansasKentuckyKentuckyKentuckyKentuckyKentucky
LouisianaLouisianaLouisianaLouisianaLouisiana
MaineMaineMaineMaineMaine
MichiganMichiganMichiganMichiganMichigan
MinnesotaMinnesotaMinnesotaMinnesotaMinnesota
MissouriMissouriMissouriMissouriMissouri
MontanaMontanaMontanaMontanaMontana
NebraskaNebraskaNebraskaNebraskaNebraska
Nev adaNev adaNev adaNev adaNev ada
New HampshireNew HampshireNew HampshireNew HampshireNew Hampshire
New JerseyNew JerseyNew JerseyNew JerseyNew Jersey
New MexicoNew MexicoNew MexicoNew MexicoNew Mexico
North CarolinaNorth CarolinaNorth CarolinaNorth CarolinaNorth Carolina
North DakotaNorth DakotaNorth DakotaNorth DakotaNorth Dakota
OhioOhioOhioOhioOhio
OklahomaOklahomaOklahomaOklahomaOklahoma
OregonOregonOregonOregonOregon
South CarolinaSouth CarolinaSouth CarolinaSouth CarolinaSouth Carolina
South DakotaSouth DakotaSouth DakotaSouth DakotaSouth Dakota
TennesseeTennesseeTennesseeTennesseeTennessee
TexasTexasTexasTexasTexas
UtahUtahUtahUtahUtah
VirginiaVirginiaVirginiaVirginiaVirginia
WashingtonWashingtonWashingtonWashingtonWashington
WisconsinWisconsinWisconsinWisconsinWisconsin
WyomingWyomingWyomingWyomingWyoming
BostonBostonBostonBostonBoston
HartfordHartfordHartfordHartfordHartford
BrocktonBrocktonBrocktonBrocktonBrockton
BrooklineBrooklineBrooklineBrooklineBrookline
CambridgeCambridgeCambridgeCambridgeCambridge
ChicopeeChicopeeChicopeeChicopeeChicopee
Fall RiverFall RiverFall RiverFall RiverFall River
FraminghamFraminghamFraminghamFraminghamFramingham
LynnLynnLynnLynnLynn
MaldenMaldenMaldenMaldenMaldenMedfordMedfordMedfordMedfordMedford
New BedfordNew BedfordNew BedfordNew BedfordNew Bedford
QuincyQuincyQuincyQuincyQuincy
SomervilleSomervilleSomervilleSomervilleSomerville
SpringfieldSpringfieldSpringfieldSpringfieldSpringfield
TauntonTauntonTauntonTauntonTaunton
WalthamWalthamWalthamWalthamWaltham
WeymouthWeymouthWeymouthWeymouthWeymouth
WorcesterWorcesterWorcesterWorcesterWorcester
CranstonCranstonCranstonCranstonCranston
PawtucketPawtucketPawtucketPawtucketPawtucket
ProvidenceProvidenceProvidenceProvidenceProvidence
WarwickWarwickWarwickWarwickWarwick
Hartford CountyHartford CountyHartford CountyHartford CountyHartford County
New London CountyNew London CountyNew London CountyNew London CountyNew London County
Tolland CountyTolland CountyTolland CountyTolland CountyTolland County
Windham CountyWindham CountyWindham CountyWindham CountyWindham CountyBristol CountyBristol CountyBristol CountyBristol CountyBristol County
Essex CountyEssex CountyEssex CountyEssex CountyEssex County
Franklin CountyFranklin CountyFranklin CountyFranklin CountyFranklin County
Hampshire CountyHampshire CountyHampshire CountyHampshire CountyHampshire County
Norfolk CountyNorfolk CountyNorfolk CountyNorfolk CountyNorfolk County
Plymouth CountyPlymouth CountyPlymouth CountyPlymouth CountyPlymouth County
Worcester CountyWorcester CountyWorcester CountyWorcester CountyWorcester County
Kent CountyKent CountyKent CountyKent CountyKent County
Newport CountyNewport CountyNewport CountyNewport CountyNewport County
Prov idence CountyProv idence CountyProv idence CountyProv idence CountyProv idence County
1. Are we National or Regional?
2. How Much Play is actually “local”?
Area % Local DemandMyrtle Beach < 10%Hawaii < 10%Williamsburg < 25%Phoenix > 60%Orlando > 60%Las Vegas > 60%Sources: Pellucid Golf Local Market
Analyzer, Arizona State University
Customer Attraction and RetentionEnhance Total Guest Experience to Boost
Customer Attraction and/or LoyaltySurvey Results
Reasons for choosing a course to play:
Condition: 1.6Price: 1.7Pace of play: 1.8Layout: 1.9Availability of promo prices: 2.0Availability of tee times: 2.0
Key satisfaction areas of client courses:Overall enjoyment: 2.1
Condition: 2.2Customer service: 2.2 Price: 2.6Pace of play: 2.6
Do we know who our customers are, how much they spend and whether they come back?
YTD Unique Customers
0
5,000
10,000
15,000
2007 1,605 2,497 3,882 5,224 6,591 7,896 9,227 10,349 11,135 11,903 12,573 13,049
2008 973 2,153 3,920 5,296 6,892 8,331 9,681 10,874 11,635 12,431 13,177 13,671
2009 1,739 2,525 3,645 4,922 6,394 7,687 8,963 10,178 11,053 11,954 12,713 13,194
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Year to Date Player Retention
0
2,000
4,000
6,000
2007
2008 279 574 1,075 1,509 2,056 2,543 3,057 3,528 3,866 4,199 4,561 4,797
2009 315 605 1,022 1,427 1,983 2,467 2,986 3,448 3,809 4,121 4,444 4,694
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
ConclusionCustomer Relationship Marketing (CRM)
Customer Segmentation and Targeted Marketing• Golf fared better in the Recession than many other industries, but
Resorts generally got hammered worse than the golf industry in general.
• Resorts are showing better early 2010 results than the general golf industry, especially on a weather adjusted basis.
• Golf in general and Resorts in particular will continue to fight over the same golfers, even though resort golfers are generally more affluent and avid.
• In spite of economic “recovery”, golf will continue its relatively stagnant growth pattern into the foreseeable future.
• Courses will have to adapt using more modern CRM principles and customer service tools that will require better staff selection and training.
• Management will have to provide better technical tools and better customer analytics in order to grow revenues.
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