VOLUME 1, NUMBER 143

Web Street Golf Daily Pulse

VOLUME 1, NUMBER 143

Friday July 23, 2010

ANY IDEA WHO SAID THIS? “I seem to be getting asked this a huge amount the last couple of days. I don't know why people are asking it. Is there a hare running on this one?"

ON THIS DAY: In 2000, Tiger Woods completed the career Grand Slam with a victory at the British Open. Six years later on the exact same day, Woods won the British Open again and became the first to top $60 million in career earnings

RELIEF? The U.S. House of Representatives passed the Miscellaneous Tariff Bill (MTB) this week, restoring duty relief for a number of sport goods among them being golf bags, which had expired on Jan. 1, 2010. House Democrats passed the legislation under special rules to get around Republican opposition to the bill, which they say is the product of a deeply flawed process. The final vote was 378-43, in favor of the MTB, providing the super majority vote required under House rules. The bill now moves to the Senate.

The new language would reduce the duty on volleyballs from 4.8% to free; on rubber basketballs from 4.8% to 0.7%; leather basketballs from 4.8% to free; synthetic basketballs 4.8% to 1.1%; and the duty on golf bags would be cut from 7% down to 1.5%. There was duty relief on these products from 2007 through 2009.  The new duty reduction would run through 2012 if approved by the Senate and the President.

"The support of the Miscellaneous Tariff Bill in the House was long overdue and greatly appreciated," said Bill Sells, SGMA's vice president of government relations.  "It's now time for us to focus on getting this bill approved by the U.S. Senate and signed by President Obama"

SGMA will continue to work for passage of the MTB and keep the sporting goods industry informed of any developments.

This bill would also allow companies to request retroactive relief from January 1, 2010 by filing a liquidation or re-liquidation request within 180 days of passage of the bill, according to the "The support of the Miscellaneous Tariff Bill in the House was long overdue and greatly appreciated," said Bill Sells, Sporting Goods Manufacturers Association's vice president of government relations.  "It's now time for us to focus on getting this bill approved by the U.S. Senate and signed by President Obama"

The SGMA will continue to work for passage of the MTB and keep the sporting goods industry informed of any developments. This bill would also allow companies to request retroactive relief from January 1, 2010 by filing a liquidation or re-liquidation request within 180 days of passage of the bill, according to the Outdoor Industry Association. Customs and Border Patrol then has 90 days to process payment.

If the bill is ultimately passed, it remains to be seen whether the duty savings in the instance of golf bags, will be passed on to the consumer. It may simply be absorbed by at the company level in an attempt to enhance profit margins that have been under attack ever since the recession kicked into top gear.

THE PURSUIT TO BE BETTER: Golfsmith (GOLF: NASDAQ) is looking to turn the heat up as its offering consumers a chance to improve their game the next time they buy from the retailer. The retailer has partnered with GolfTEC to provide avid and aspiring golfers an opportunity of $1 million worth of free lessons. The way it works is any Golfsmith customers who make a purchase of $199 or more at any of its stores will receive a FREE 30-minute GolfTEC Swing Diagnosis conducted by a GolfTEC Certified Personal Coach. The offer is only available while supplies last. The Swing Diagnosis, valued at $85, is one of GolfTEC’s most popular lessons, according to the company, because it identifies improvement opportunities in any player’s swing using high-speed video, motion measurement, and biofeedback to improve swings.

“At Golfsmith our goal is to inspire golfers to play better golf with great equipment and credible, professional instruction provided by our partners at GolfTEC,” said Marty Hanaka, president and CEO of Golfsmith.  “This groundbreaking promotion is yet another example of how Golfsmith is helping to grow the game of golf and make golf more affordable.  More than 12,000 golfers will get free lessons with their purchase only at Golfsmith.”

Joe Assell, cofounder and CEO of GolfTEC, added, “GolfTEC has given over 2.3 million lessons using our Proven Path approach. Our consistent 95% success comes from five unique factors that make GolfTEC far more than just a lesson. The Swing Diagnosis is a great way to experience the power of video and motion measurement technology.  We are excited to work with our partner Golfsmith in supporting this great event.”

For more information visit: www.golfsmith.com/freelessons.

GET THEM STARTED WHEN THEY’RE YOUNG: Titleist has long been recognized for its overwhelming golf ball usage and success across the worldwide professional tours, with club professionals and at every level of competitive golf. The brand maintains a dominating position in the pay for play ranks and it doesn’t appear that will be changing anytime into the future. It shouldn’t come as a surprise that it also resonates at an extremely high level with amateurs.

As the country’s top junior boy golfers gathered at the Egypt Valley Country Club in Ada, Mich., for their national championship this week, 134 of the 156 players, or 86 percent of the field, relied upon Titleist golf balls. That is more than 11 times the nearest competitor with 12 players.  In addition to its golf ball success, Titleist also was the clear choice across every major equipment category, including drivers (69), fairway metals (90), hybrids (48), iron sets (80), sand, lob and approach wedges (255) and putters (100).

The trend continued at the U.S. Girls’ Junior Amateur Championship being contested at the Country Club of North Carolina in the Village of Pinehurst. Titleist accounted for over 78 percent of the field in the golf ball category with 122 players, more than nine times the nearest competitor with 13. Titleist also was the top choice of more players in the wedge (173) and putter (63) categories.

The success across all equipment categories is continued evidence that when endorsement money is taken out of the equation, there doesn’t appear to be a substitute for Titleist in the future of competitive golf and with serious golfers everywhere. At the U.S. Amateur Public Links 84% of the field (131 players) choose to tee it up with a Titleist in both the Men’s and Women’s events. At the NCAA Division 1 Men’s Championship, 77% (120) of the field played Titleist, while 91% (114) in the Women’s Championship trusted the product for the greatest test of the playing year.

At the Australian Amateur, Titleist came out on top as 71% (169 players) used the ball in competition. At the British Amateur, 78% (225 players) played a Titleist.

Some things happen in life by chance, while others are calculated. In the case of Titleist’s preference with aspiring amateurs with an eye towards making their passion an occupation one day, it would be difficult to suggest its success has anything to do with happenstance.

CIOA BELLA: Verdura Golf & Spa Resort on Sicily’s southwest coast promises an unrivaled golfing experience for golfers around the world. The resort’s spectacular three courses, designed by world-renowned architect Kyle Phillips, opened for its first full year in March 2010.

According to Sir Rocco Forte, Chairman and CEO of the luxury hotel company The Rocco Forte Collection, no other golf resort on the continent can compare to Verdura. He may be a bit biased on the topic but his view shouldn’t be ignored. “There wasn’t anywhere in Europe that offered the kind of golfing holiday I was after,” claimed Sir Rocco, who spent eight years nurturing Verdura as the company’s first resort venture.

Verdura’s 570-acre site enjoys 1.2 miles of private coastline. Kyle Phillips, who created the universally acclaimed Kingsbarns Links down the road from St. Andrews (home of the Old Course) and The Grove near London, enjoyed a pristine canvas to design his vision for the two 18-hole championship courses, the East and the West, as well as the engaging 9-hole par-3 course.

“Sir Rocco Forte found a beautiful piece of seafront ground where we have combined our respective skills to develop a 5-star hotel and spa, 36 holes of championship golf, plus a 9-hole par-3 course and full practice facility,” said Phillips. “It’s a unique low-density concept for a coastline property, with only electric vehicles allowed inside the resort. Golf purists will absolutely love it. Near the seashore, I tried to give the golf a linksland feel with a rougher seaside look, transitioning to large rolling Muirfield-like landforms as it moves back away from the sea.”

Verdura’s East Course is 7,221 yards and the West Course measures 7,474 yards from the championship tees. Phillips has routed holes from both the East and West layouts so that a Composite Championship Course is formed to present a challenging venue for a future professional tournament. This strategic design would play at 7,458 yards and all of Verdura’s ocean holes are featured, which will provide stimulating and dramatic visuals for a television audience.

Verdura’s Director of Golf, Niall Cameron, has a rich pedigree of golf operations experience at such notable clubs as Turnberry (last year’s Open Championship host), Royal St. George’s (next year’s Open Championship venue) and the ultra-exclusive Lyford Cay in the Bahamas. He also spent a number of years competing on the European Tour. According to Cameron, “the sheer size of the resort gives a wonderful feeling of being totally isolated and at one with nature. The peace and quiet of the courses, punctuated only by birdsong and the gentle rustle of the wind through the native Sicilian grasses, makes the stroll through the rolling fairways a genuine delight. The fairways are well separated and with the deep pot bunkering you can easily imagine that you are playing on one of the historic Scottish links courses. On top of all this, we have strategically rich and enjoyable golf in a spectacular setting. Kyle Phillips has designed yet another masterpiece which is surely destined to become a must-play venue.”

The hotel expertise of the Rocco Forte Collection married with Kyle Phillips’ golf course design skills will undoubtedly surpass the most discerning golfer’s expectations. To discover more on the paradise awaiting at the Verdura Golf & Spa Resort visit www.verduraresort.com.

*Images are courtesy of Iain Lowe

RESEARCH SAYS: The resort and daily fee courses in golf may be able to learn a thing or two from the hotel industry. The two have similarities, namely daily capacity issues (rooms versus rounds) as well revenues being tied to the traffic each experiences on a daily, weekly and monthly basis. With that as an introduction consider the following as food for thought with regard to whether the world is getting, staying the same or showing signs of weakness.

The U.S. hotel industry reported mixed results in the three key performance metrics for the first half of 2010 in year-over-year measurements, according to data from Smith Travel Research (STR). The industry’s occupancy was up 4.4 percent to 56.4 percent, it reported, the average daily rate (ADR) fell 2.0 percent to US$97.18, and revenue per available room (RevPAR) increased 2.3 percent to US$54.80. In second-quarter 2010, occupancy increased 6.2 percent to 60.7 percent, ADR ended the quarter flat at US$97.87, but RevPAR increased 6.2 percent to $59.44.

“First-half and second-quarter U.S. hotel industry performance demonstrated marked improvement from 2009—particularly on the demand (rooms sold) front,” said Bobby Bowers, senior VP at STR. “Second-quarter room demand increased 8.7 percent—the industry’s largest quarterly demand increase since STR began tracking performance in 1987. ADR growth is slowly improving, primarily at the upper-end, and we expect continued gradual improvement through the second half. We’re forecasting full-year 2010 RevPAR growth of just over 5 percent, driven almost exclusively by occupancy gains.”

In the first half of 2010, 23 of the Top 25 Markets experienced occupancy increases. Boston, Massachusetts, led the increases, rising 14.8 percent to 65.4 percent, followed by Detroit, Michigan (+11.2 percent to 51.4 percent), and New Orleans, Louisiana (+10.7 percent to 66.7 percent). Houston, Texas, reported the largest occupancy decrease, falling 4.6 percent to 56.7 percent, followed by Norfolk-Virginia Beach, Virginia, with a 2.9-percent decrease to 49.6 percent.

New York, New York, posted the largest ADR increase, rising 5.4 percent to $209.42. Tampa-St. Petersburg, Florida, reported the largest ADR decrease, falling 10.7 percent to $97.98, followed by Detroit with an 8.5-percent decrease to $75.29.

Four markets achieved a RevPAR increase of more than 10 percent: New York (+15.2 percent to $165.56); Boston (+13.7 percent to $89.39); New Orleans (+12.4 percent to $81.66); and Miami-Hialeah, Florida (+11.0 percent to $117.33). Houston dropped 10.0 percent in RevPAR to $51.60, reporting the only double-digit decrease in that metric.

WEB GEMS:

FEEL THE LOVE: While the Open Championship is nearly a week old, the love affair with the venue and surrounding town is still very much in an afterglow mode. While the play inside the ropes represent the most compelling story around the Open Championship, its what happens out of it that takes on a fairytale appearance. READ MORE>>>

TWO FORE ONE: K.J. Choi has ended an experiment using two caddies after people were making fun of him. It appears he may have the last laugh though. READ MORE>>>

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ANSWER: R&A chief Peter Dawson on the burning question whether the Open Championship will return to St. Andrews in 2015.

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