VOLUME 12, NUMBER 1
Web Street Golf Report
VOLUME 12, NUMBER 1
Monday, January 5, 2009
FORE SALE: CSX Corp. is examining strategic options for its West Virginia luxury resort The Greenbrier, which houses a facility that was maintained during the Cold War as an emergency shelter for members of Congress. The resort, which boasts among its amenities three 18-hole championship courses: The Old White, The Greenbrier and The Meadows, is located in White Sulphur Springs, W.Va.
"The Greenbrier is at a crossroads," said Michael Ward, president, chairman and CEO of CSX. "While we have continued to make investments to keep the resort competitive, the market for luxury hospitality services is shrinking rapidly in this economy. The Greenbrier lost $35 million last year, and the resort faces even more difficult challenges in 2009. It is imperative that we respond to this situation without delay. Our goal is to make The Greenbrier not only one of America's great destinations, but also a viable business entity."
The Greenbrier Course is the only resort golf course in the world to be the site of both the Ryder Cup Matches (1979) and the Solheim Cup Matches (1994). Tom Watson is the golf professional emeritus for The Greenbrier, a position previously held by the legendary Sam Snead.
The company hired Goldman Sachs Group Inc. as a financial adviser in its review. Additionally, CSX said Michael Gordon would replace Andrew Fogarty as president and managing director of Greenbrier. Gordon had served as general manager of the resort since February 2007.
WRITE DOWN OR WRITE OFF? Equus Total Return, Inc. (EQS: NYSE) has taken a write down of its debt and equity investment in Nickent Golf, Inc. The latest write down is the most substantial as it went from $8.43 million to $180,000. According to Equus, the write down is based on Nickent's current financial condition and the effects of the market economy on its business. Back on September 30, 2008, the investment fund had written its investment in the golf company down to $8.25 million from $9.18 million.
HAVING A BALL!!! While the news, in general, hasn’t been particularly optimistic lately due to the economy, there continues to be some silver linings. Bridgestone reported, despite difficult overall market conditions in November, its recently introduced B330-RX continues to be the number three selling model in the golf ball category, according to Golf Datatech. The model achieved a 6.6% dollar share in the Off Course channel and alone outsold all of TaylorMade, Pinnacle, Srixon, Top-Flite as well as Wilson models. Bridgestone said the B330-RX propelled its golf ball to an all time high of 20.3% dollar share in November.
In the On Course channel, Bridgestone ball products experienced a 1.2% share point gain to a total of 4.4%. The RX impact (only .5%) has not really been felt in the On Course segment mainly due to only 13% distribution so far, the company said. With a stronger expected inventory position in 2009, Bridgestone said it expects to improve distribution of the product in this channel. With modest growth expectations in the On Course channel coupled with continued strength with Off Course retailers, the company anticipates a very tight race for the overall #2 On/Off share spot between it and Callaway.
CHANGE UP: Acushnet Company, the golf business of Fortune Brands, Inc. (FO: NYSE), has initiated an exchange program due to its ongoing patent dispute with Callaway Golf against certain Pro V1 products. A court injunction went into effect on January 1, 2009, but the company said it converted production in September of existing Pro V1 model golf balls to be outside the patents at issue, which it said it then began shipping to retailers in November. Converted product can be identified by a black or red circle on the dozen box and sleeves. Acushnet has requested that retailers sell only these converted Pro V1 and Pro V1x golf balls starting this year. The injunction and exchange program are limited to the United States and do not apply to retailers, distributors or tour usage outside of the U.S.
"We have made every possible effort to ensure that this legal dispute did not find its way into the golf marketplace,” said Wally Uihlein, Chairman and Chief Executive Officer, Acushnet Co., in a prepared statement. “Unfortunately, our attempts to resolve the difference of opinion on the retail inventory issue with Callaway have been unsuccessful. As a result, we decided that it is critical to remove this uncertainty for golf retailers and minimize any impact on their business, particularly during these already challenging times.”
SMART START EXPECTED IN ’09: Fujikura has introduced the new Motore F1 Series for 2009. The latest from the company feature Fujikura’s proprietary H.I.T., which the company says, stores more energy during the downswing and releases it just before impact while maintaining the shaft and club’s stability. Motore’s "smart" shaping of the tip, according to Fujikura, enables these benefits while minimizing weight, allowing the tip end to accelerate faster than conventional tips for greater distance and accuracy in all clubs.
“Our excellent 2008 performance across all Tours, especially our eighth consecutive year being the #1 Wood Shaft Brand on the PGA Tour, gives us confidence that our new product introduction of the Motore F1 Series in 2009 will help us not only maintain, but grow and solidify our expanding leadership position,” stated Dave Schnider President/COO of Fujikura. “Motore means ‘Engine’ in Italian and we believe this is a very fitting name as the shaft has been recognized as the engine of the golf club.”
Pat McCoy, Fujikura’s Tour Manager added, “We’re excited to introduce the Motore F1 Series line in Hawaii. After our off-season player testing, many PGA Tour pros are now playing the Motore shaft. In my 15 years of working with pros, this is truly the most positive reception to a new product introduction. In fact, at the PGA Tour Q-School, with just a handful of prototype designs, our Motore 80 HB became the leading model of hybrid shaft at the event.”
The Motore F1 Series shafts will be introduced in January 2009 at the PGA Show. It will be available through Fujikura’s Charter Dealers across the United States and around the world beginning in February.
MAJOR SIGNING: FootJoy has entered into a multi-year agreement with the reigning Open and PGA Champion, Padraig Harrington. The Irishman will wear FootJoy’s new SYNR-G shoe, which debuts January 1. “FootJoy is a brand that just about every golfer is brought up wearing, and I’m no different,” said Harrington. “The belief is, and you’ve got to have this, that you are playing the very best shoes you can get, and that gives you an edge over the field. The new SYNR-G shoes from FootJoy are fantastic. They support the foot well throughout the golf swing, which is so important to hitting solid, powerful shots.”
Harrington will be featured in new FootJoy television advertisements as well as print and online creative throughout the year. “We are thrilled to welcome Padraig Harrington to Team FJ,” said Rob Kelley, Director of Brand Marketing for FootJoy. “Padraig not only brings an unparalleled record of worldwide success but also an intimate knowledge of the research and technology behind footwear development.”
ANOTHER ONE IN THE FOLD: In its fourth major signing in the past two months, Sligo Wear Inc. has signed Bubba Dickerson to a contract to wear the company’s apparel at all Nationwide Tour and PGA Tour events in 2009. Dickerson joins Brian Gay, Ben Crane and Steve LeBrun on the Sligo Wear staff of Tour professionals.
“Bubba is really excited to be with Sligo Wear and we’re certainly excited to have him with us,” said Sligo Wear Director of Sales Shawn Aucoin. "Bubba is a big fan favorite. We’re confident he, along with Brian, Steve and Ben, will give Sligo Wear some terrific exposure to fans and fellow players.“
Dickerson, the 2001 U.S. Amateur champion, earned more than $189,000 on the Nationwide Tour in 2008. He posted four top 10 finishes on the Nationwide Tour in ‘08, including a second place finish at the Oregon Classic and a fourth place finish at the Mexico Open. “We think Bubba is going to have a great year in 2009 and we look forward to going on the ride with him,“ Aucoin said.
STOCK WATCH: The sentiment on the street might be out with the old and in with the new. The idea being that 2008 was a disaster, one that no one predicted, or for that matter saw coming.
The Dow Jones Industrial Average closed out 2008 at 8,776. The blue chip index lost 34%, yielding its worst year since 1931, which happens to be when the Great Depression was in full swing! The S&P 500 plummeted 38.5% in 2008. The technology-heavy Nasdaq Composite Index finished at 1,577.03, off 40.5% for the year.
But the blood wasn’t felt only in the United States. Britain's FTSE 100 had its worst year on record, down 31.3%, with similar falls in Paris and Frankfurt. Shanghai was one of the worst hit major markets, ending the year 65% (representing a loss of nearly $3 trillion) lower, which was also a record loss.
Japan’s Nikkei closed 2008 at 8,859.56, booking its worst year ever with a loss of 42%. This follows an 11.1% decline in 2007. On a more upbeat note, the index marked its first positive month in December since May. One further data point regarding the Nikkei, on the last trading day of 1989, Tokyo's blue-chip index had touched an all-time high of 38,915.86.
In Hong Kong, which is in a recession, the Hang Seng index closed the year 48% lower. This was its second-biggest drop to date and its worst since the global oil shock of the early 1970s. Meanwhile, India's main index in Mumbai has more than halved.
But that was then and this is now... Wall Street started the New Year out with a bang on Friday, as investors, brushing aside a disappointing report on manufacturing, sent the Dow Jones industrials up more than 250 points. It was the first close above 9,000 in two months and started the blue chip index higher by 2.94% for 2009. The Nasdaq composite index rose 3.50 % and the Standard & Poor's 500 index gained 3.16 % in their first trading day of the New Year.
So the question is: Is the glass half empty or half full going into 2009? The expectation bar, perception wise, hasn’t exactly been set too high. But it remains to be seen if and when the pendulum will swing from fear back to greed within the global investment world...
PAST, PRESENT AND FUTURE: Smith Travel Research (STR) released its revised 2008 and 2009 forecasts as well as its projections for the U.S. hotel industry’s performance in 2010. “We look for things to get tougher before they get better,” said Randy Smith, CEO of STR. “We’ve had an entire year in which we’ve had a cheap dollar fueling more international visitors, and New York to date has had another good year. We expect those two things to level, so two of the things that have been good for the U.S. lodging industry aren’t going to be there in the foreseeable future.” Mark Lomanno, STR president, added development pipeline attrition would be higher than normal—even with projects that have broken ground—due to the continued tightness in the financial markets.
The revised 2008 forecast include the following:
• A 3.0-percent drop in occupancy from year-end 2007 to 61.2 percent;
• A 3.4-percent increase in average daily rate average from year-end 2007 to $107.44;
• A 0.4-percent increase in revenue per available room from year-end 2007 to $65.75; and a 2.5-percent increase in supply and a 0.5-percent decrease in demand.
For 2009, STR projects:
• A 3.5-percent year-over-year decline in occupancy to 59.1 percent—the lowest level since 2003, when it was 59.2 percent;
• A 1.0-percent year-over-year increase in ADR to an all-time industry best of $108.52;
• A 2.5-percent year-over-year decline in RevPAR to $64.10.
• A 2.4-percent year-over-year increase in supply and a 1.0-percent decrease in demand.
For 2010, STR projects:
• A 0.6-percent year-over-year decline in occupancy to 58.7 percent;
• A 2.1-percent year-over-year increase in ADR to a record $110.80;
• A 1.5-percent year-over-year increase in RevPAR to $65.06; and
• A 1.2-percent increase in supply and a 0.6-percent increase in demand.
MORE OF THE SAME BUT ONLY DIFFERENT: While marketers of travel services may gladly bid adios to 2008, the year ahead promises to be equally challenging as competition for travelers heightens, according to Peter Yesawich, president and CEO of Ypartnership.
According to research conducted by Ypartnership, the travel intentions of Americans remain encouraging with 71% of active travel households planning at least one overnight trip during the next 6 months, the same as a year ago. "Our most recent tracking surveys reveal there is still plenty of demand for travel services in the marketplace for those who are aggressive and clever enough to capture it," says Yesawich.
Additional travel trends for 2009 revealed by Yesawich include:
Value Is King - Expect consumers to demand more in exchange for what they pay. They won't necessarily opt for the least expensive alternative, but they will shop aggressively to ensure they don't overpay for what they consider rightfully theirs in the current economic climate: a good deal. They are also more likely to purchase inclusively priced travel services to exercise greater control over the total cost of the trip before they depart;
Both Vacations And Business Trips Will Get Shorter - Two thirds of active travelers who participated in the October 2008 travelhorizons survey stated that "staying fewer nights" was one of the strategies they intended to employ to manage the cost of their travel in the year ahead;
Consumers Will Use The Internet Differently - While the percentage of American travelers who go online to plan and purchase travel has remained essentially unchanged during the past two years (approximately two thirds), consumers are increasingly embracing the Internet's ability to assist with comparison shopping. The growing popularity of meta search engines such as Kayak and Farecast that pull prices for competitive products and services from multiple supplier Web sites and display them in a user-friendly manner will accelerate this phenomenon;
Marketing Will Go Mobile - Almost eight out of ten Americans own a cell phone, yet only 15% of them are Internet enabled. This percentage will rise quickly in the year ahead given the growing popularity of the iPhone, Blackberry Storm and similar devices. With this growth expect more travelers to plan and purchase travel services with these devices. In fact, according to the 2008 NEXTGEN Traveler survey, one out of four "next generation" travelers plan to use their mobile phone or PDA to make or change travel plans (other than through voice communications) in the next two years;
All Vacations Are Not Created Equal - As revealed in a survey of over 4,000 adults conducted by Ypartnership for Walt Disney Parks & Resorts, vacations are increasingly perceived as an appropriate way to recognize certain life events (e.g. anniversaries, school graduations, retirement, etc.). Vacations taken to celebrate life events tend to be special by practically every measure: they are planned further in advance, budgeted at a higher amount, longer in duration, and include more people in the traveling party. Seven out of ten adults have taken a "Celebration Vacation" before, insight which inspired one of next year's most innovative promotional offers: free admission to any Walt Disney park on your birthday in 2009.
Travel Agent Usage Will Continue To Rise - Travel agents are not down for the count. On the contrary, three out of ten American travelers use the services of a travel agent on a regular basis, and this percentage is growing for two reasons: 1) many travelers now place a higher value on the time it would take to pick through multiple Web sites to find the best options/prices than the fee they have to pay an agent to do the work for them, and 2) consumers see agents as "in the know" and a potential source of otherwise unadvertised deals (of great interest when value is king);
Going Green Is Good For Business - Although most Americans are unfamiliar with the term "carbon footprint," 85% consider themselves to be "environmentally conscious." Four out of ten now state they would consider shifting their patronage to a travel service supplier that demonstrates environmental responsibility. Most, however, are not willing to pay a premium fare or rate to green suppliers as they expect them to be good stewards of the environment in which they operate;
Diversity Awaits Discovery - Two thirds of Americans are non-Hispanic whites, yet at its present rate this percentage will decline to 50% by the year 2043 and become the minority (46%) by the year 2050. At that time, Hispanics will represent 30% of all Americans. African Americans will represent 13%, and the Asian population will represent 8%. Hence, diversity represents a powerful market force, and one that will gain considerably more recognition in the year ahead given the recent election of President-elect Obama.
There will be no shortage of challenges in 2009, according to Yesawich. "But the year ahead is also one that holds great opportunity for those who amend their marketing practices to reflect the manner in which consumers live, work and travel today."
LET THE COUNT DOWN BEGIN: Pawleys Plantation in Pawleys Island, S.C., is offering a value-laden “Inauguration Package” which combines luxurious accommodations, golf on Pawleys Plantation and a sampling of the resort's gourmet cuisine. In 2009, the inauguration of Barack Obama aligns with the Martin Luther King holiday to provide Federal workers and many others with the opportunity to enjoy a four-day weekend. This unique celebratory weekend prompted Pawleys Plantation to create a getaway package that delivers luxury for less.
In honor of Barack Obama's swearing in as the 44th President, the four-night “Inauguration Package” is priced at $344 dollars per person. It includes accommodations in a spacious villa, two rounds of golf on Pawleys Plantation’s award-winning Jack Nicklaus course, dinner at one of the on-site restaurants, and Pawleys Plantation's famous gourmet Sunday brunch. Friday, January 16th check-in is required. Taxes and gratuities are included.
“On this inaugural weekend, more than four million people are expected to descend on Washington, D.C. and surrounding areas, so it's the perfect time for those living in the Baltimore/Washington area to escape the traffic and crowds with a trip to the tranquil atmosphere of Pawleys Plantation,” said Jann Walker, director of marketing at Pawleys Plantation. “We're offering an elegant getaway for an extremely affordable price. With gas prices low, it's an opportunity to enjoy one of the Southeast's finest resorts.”
While the “Inauguration Package” is designed primarily for golfers, special rates are also available for non-golfers. More information is available online at www.pawleysplantation.com or by calling 800-367-9959.
THE INFORMATION CONTAINED IS BELIEVED TO BE RELIABLE, BUT IT IS NOT GUARANTEED. THE OPINION EXPRESSED IS THAT OF TERRY MCANDREW AND SHOULD NOT BE CONSIDERED A SOLICITATION TO BUY OR SELL SECURITIES IN ANY OF THE COMPANIES DISCUSSED WITHIN THIS NEWSLETTER. CONTENTS OF THIS NEWSLETTER MAY NOT BE REPRINTED OR REBROADCAST WITHOUT THE EXPRESSED WRITTEN CONSENT OF TMAC GOLF
Last Updated (Wednesday, 03 February 2010 10:41)