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Changes to the importance of work and leisure

The Worlds Values Survey is periodically conducted in almost 100 countries containing almost 90% of the world’s population. It is used by political scientists, sociologists, social psychologists, anthropologists and economists to analyze many topics including the importance of different life activities and subjective well-being.

We dug into the survey data to see if the Great Recession had any impact on how people in the U.S. value work and leisure. The following graph shows the percent of adults who consider work and consider leisure as rather important or very important in their lives.

Importance of work and leisure

As the graph clearly shows, there was a dramatic drop in the importance of work around the time of the Great Recession that has stayed low through last year. The importance of leisure went up.

When we looked at the ratings based on adults’ education levels, in the 2010-2014 survey, there was little difference based on educational attainment for the importance of work. But more adults with college degrees rated leisure as rather/very important (94.0%) than adults with lower levels for education (89.5%).

We will be taking a look at other countries in the future to see how adults there compare.

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Where does pizza at FECs and Chuck E. Cheese’s fall in the four pizza groups?

Chuck E. Cheese’s new owners, Apollo Global Management, aim to grow sales by pleasing grown-ups’ palates. They want the place where a kid can be a kid also to be the place where mom can get a cappuccino and dad can chow down on an artisan-style like pizza.

The chain’s push toward an adult-pleasing menu, including new pizza, comes as the pizza industry nationwide is raising the bar.

For example, this last November, Pizza Hut, the nation’s largest pizza chain, announced the most expansive brand update in the company’s half-century history including menu additions that mirror items seen at artisan pizza shops and at the new fast-casual players.

Michigan-based consultant Big Dave Ostrander says the pizza market is dividing into four distinct groups.

“I think that there’s going to be three big winners when it’s all said and done,” said Ostrander, a frequent pizza contest judge and presenter at Pizza Expos. “No. 1 will be the very highest quality providers, (restaurateurs) that just make a fantastic pizza. No. 2 is going to be the lowest cost provider, and we all know who they are.

“The third ones are the fast-casual types. Some of it is above average to very good,” he added. “The rest are going to be slugging it out for the same customers.”

That means more competition in the middle of the pack, where many consumers now place Chuck E. Cheese’s and most FEC pizza.

“I eat pizza a lot,” Ostrander added. “I haven’t eaten their [CEC’s] pizza in a long time. I don’t think they’d win gold, silver or bronze in the competitions I’ve judged.”

Of course, Ostrander hasn’t tried CEC’s new pizza. We’ll have to give it some time to find out whether Chuck E. Cheese’s has successfully repositioned their pizza to a competitive positive.

Most family entertainment centers are as far behind pizza trends as CEC was until their new menu. The new fast-casual pizza chains that are rapidly expanding into every market are quickly raising consumers’ expectation levels for pizza. These chains are assembling fresh-made, fresh-dough (choices typically include regular, thin-crust, whole-wheat thin crust and gluten-free), customizable pizzas right in front of customers in the same style as Chipotle’s front line, often delivering the final product in five minutes.

Fast casual pizza chains FECs

The preassembled frozen pizzas and par-baked pizza crust pizzas that many FECs continue to offer have now fallen to the bottom of the barrel in terms of quality in the minds most consumers. In fact, many of the frozen pizzas you can now buy in the supermarket are better. Consumers today also now expect pizzas to be prepared in plain sight, often in stone-hearth ovens for the gourmet pizzas, not behind closed kitchen doors (CEC is still behind the eight ball on this).

Most FECs need to wake up and get with it, or they will see drastic revenue declines no different than Chuck E. Cheese’s has seen over the years due to their behind the times, non-adult appealing pizza. In today’s out-of-home entertainment market, the food and beverage has become as important of an anchor attraction as the entertainment. Offering subpar food, including pizza, based on new contemporary expectations is now a detriment to success.

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Digital video & media increasingly consuming our leisure time

In this blog and in our company’s Leisure eNewsletters we have been documenting how at-home and mobile screen digital entertainment is increasingly taking both leisure time and expenditure market share away from location-based entertainment, including from family entertainment center venues. In that context, here’s some of the latest data on the growth of digital video viewing and changes to the use of other types media.

Adults in the US now spend five and one-half hours watching video each day. Total viewing time has grown by more than half an hour from 2011 to 2015 (4:56 to 5:31). While daily television time has declined by 20 minutes, time spent watching videos on digital devices—PCs, mobile devices, game consoles, over-the-top (OTT) and other Internet connected devices—has grown by almost one hour over the five years (0:21 to 1:16).

TIme spent with video media

The greatest growth in digital video has been on mobile devices, growing from 3 minutes a day in 2011 to 39 minutes in 2015, accounting for almost 2/3s (65%) of all digital video growth. With the launch of Meerkat on Twitter and Periscope, mobile is predicted to grow even more in the future.

Time spent with digital media video

Overall, US adults now spend 12 hours (12:04) each day with major media. That is almost a one-hour (0:53) increase since 2011. Digital media now consumes almost half of that total media time (5:38).

Time spent with video digital media

With the exception of mobile and other connected devices excluding PCs, time spend on all other types of media has declined. Mobile and other connected devices now account for 45% of all time spent on major media.

For an overview of the disruptive impact of digital media and entertainment on location-based entertainment and FECs, check out our company’s December 2014 white paper The Perfect Storm, LBE Disruption & Opportunity.

 

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Parents pan Chuck E. Cheese’s food and experience

Each year National Restaurant News and WD Partners conduct a national Consumer Picks survey of restaurant customers’ top brands. This year’s survey included 42,196 consumer responses on 172 brands, ranking 10 attributes of the dining out experience—atmosphere, cleanliness, craveability, food quality, likely to recommend, likely to return, menu variety, reputation, service and value. The scores for the 10 attributes were then combined to create an overall score for each chain.

This year’s survey rated 111 limited-service restaurant chains and Chuck E. Cheese’s came in dead last among them. CEC had a score of 35.9 compared with the 71.9 score for the category winner, In-N-Out Burger. CEC’s last place rating is consistent with previous year’s ratings.

For years Chuck E. Cheese’s has seen declining same store sales, totally attributable to their declining food and beverage sales. Their average store inflation-adjusted food and beverage sales declined by almost one-half (46%) between 2003 and 2012. A major factor has been the quality and selection of their adult food offerings (or lack thereof). To turn around this decades-long decline, the company’s new owners, Apollo Global Management, recently introduced an “all-new menu for grown-up tastes,” aiming to grow sales by pleasing grown-ups’ palates. They want to become the place where mom can get a cappuccino and dad can chow down on an artisan-like pizza.

The point according to Tom Leverton, chief executive of the parent company, CEC Entertainment Inc., is to recognize that while children drive the desire to visit, it’s the parents who hold the car keys. “We want to make sure the adults are as excited about the visit as the children. The menu was a great opportunity to really do that.,” said Leverton.

Nationwide, CEC rolled out the new menu that includes Cali Alfredo pizza along with an update to its BBQ chicken pizza, now with a smoky barbecue sauce and fried onions. Any pizza on the menu now comes in a “thin and crispy” option. It also has introduced whole-wheat tortilla wraps such as chicken Caesar and a club wrap as well as adding churros with dipping sauces.

We’ll have to wait until next year to learn whether the new menu selections result in Chuck E. Cheese’s gaining favor with adults and winning a higher rating in the Consumer Picks survey and turning around CEC’s long declining food sales.

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Update on location-based entertainment spending trend

Our company has been tracking the long-term trend in location-based entertainment spending that has shown a decline started around the turn of the century. We now have new, more current data thru June 2014 and it appears that trend is continuing.

The U.S. Bureau of Labor Statistic’s Consumer Expenditure Survey is an incredible resource for analyzing consumer spending and participation trends. It has been published on a calendar year basis. However, starting in 2012, BLS also started publishing a midyear update. They have just released the midyear update for July 2013 thru June 2014. So we now have three consecutive midyears of reports to look for trends.

The midyear reports don’t break spending into the finer segments that the annual data allows. They only report entertainment in a very broad category of fees and admissions that includes all recreation expenses; social, recreation and health club memberships; fees for participant sports; admissions to cinemas, theaters, amusement parks, museums, sporting events and other similar venues; and recreational lessons. Nevertheless, the broad category is still a good indication of out-of-home entertainment and recreation spending.

Since 2000, we have seen an overall decline in location-based entertainment, sports, recreation and club spending. Inflation-adjusted, it is down by 21% from 2000 spending and down by nearly one-quarter (23%) from its high point right before the start of the Great Recession.

Average household spending on entertainment fees admissions copy

The new midyear report confirms the downward spending trend is continuing. Average inflation-adjusted household spending for this broad category of entertainment declined by 9% between the July-June midyear ending in 2012 and the most current one ending June 2014.

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More Proof that High Fidelity is the Winning Formula

Today the entertainment landscape is highly competitive and is only growing more so. Location-based entertainment venues (LBEs), including all types of family entertainment centers (FECs), are now competing for consumers’ discretionary dollars and leisure time with the expanding options of at-home and mobile digital entertainment as well as an increasing selection of other out-of-home entertainment experiences including retail-tainment and many free options. Both on this blog and in our Leisure eNewsletter we have featured a number of articles discussing that in order for LBEs to win today and into the future, they need to offer High Fidelity.

High Fidelity quote copy

When it comes to spending on fees and admissions for entertainment on trips and vacations, since 2004 we have seen a 20% decline in household participation and a 28% decline in average household spending (inflation-adjusted). That’s a tough market to compete in and one you would think would be very price sensitive.

Spending & participation entertainment on trips 04-13 copy

Well, just the opposite appears to be the case. The High Fidelity venues are winning and are even able to raise their prices faster than inflation.

There’s probably no Higher Fidelity entertainment experience than The Magic Kingdom at Disney World in Orlando, Florida. And it isn’t cheap when you consider not only the admission price, but also adding the cost of travel, hotels and meals for a family to go there.

Guess what? Despite a shrinking market for entertainment on trips and vacations, between 2006 and 2013, The Magic Kingdom grew its attendance by 13%, 2.5 times the rate of growth of the US population. That’s an 8% increase in their US market penetration rate. And most amazing, between 2006 and 2015, they raised their admission price from $63 to $105, 44% faster than inflation. If they had only grown their admission price by inflation, today it would only be $73, $32 less than what it currently is.
Magic Kingdom price increase & attendance 2006-2015This clearly demonstrates that in today’s increasingly competitive entertainment marketplace, High Fidelity plays an important role in the formula for success. Even with the mindful frugality of spending brought on by the Great Recession, if people are going to visit an LBE, they are opting for the High Fidelity choices and are more than willing to pay a premium price for the experience. It’s not about the price, but rather the value you get for what it costs. People no longer are willing to waste their precious leisure time for a mediocre experience. If they are going to leave the comfort of their homes and the convenience of their digital screens, it needs to be a really great, High Fidelity experience.

Additional reading:

To win today, it’s all about offering a High Fidelity experience

More High Fidelity proof

Proof that moving to a High Fidelity customer experience is a winning formula

More proof that High Fidelity wins

 

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Be an LBE disrupter before you get disrupted

Often, when I give presentations or discuss the trends we are seeing with the shrinking market for community location-based entertainment venues, I often hear a response along these lines, “But people will always go out for entertainment.” Well, that is not totally true. Our company’s research finds a long-term trend of a declining percentage of people going out, and for those who still do, many visit out-of-home entertainment venues less often.

What we are seeing today for just about every type of consumer business is business-model disruption. When it comes to location-based entertainment venues (LBE), it’s not so much about disruption from other LBE competition (although that is happening some), but rather much more about disruption from the fast-evolving innovation occurring with the Triple Revolution – the Internet, social media and smartphones.

Consumer digital technology is dramatically changing consumers’ behaviors and expectations and taking away LBEs’ market share of both consumers’ leisure time and discretionary spending. At-home and mobile digital technology options are rapidly expanding in availability, selection and quality while declining in price. Average household expenditures on all types of consumers’ at-home and mobile digital technology (equipment, downloads and subscriptions) increased by almost 1/3 (+31%) from 2004 to 2013 while average household expenditures on fees and admission for entertainment and the arts decreased by over 1/4 (-27%) over the same ten years. The average dollar increase to household spending on digital technology over the ten years was more than three times greater than the total amount that the average household spent on for fees and admissions in 2013.

During those same ten years, there was a more than 1/3 (-38%) decrease in the number of people attending entertainment and arts venues on any given day while time spent on digital devices of all types has skyrocketed. Just over the past three years, the average amount of time adult Americans spend on their mobile devices is up 75% and total digital time is up daily by one-half hour. And research shows that time on digital devices is displacing leisure time spent at real world locations.

Time spent on digital leisure '12-'14 copy

LBEs are fast being disrupted by the siren call of the digital world, including all of its forms of entertainment and social media, which most users consider as a form of entertainment.

To counter digital Darwinism and avoid the innovator’s dilemma, LBEs need to disrupt their current business models. This disruption requires a paradigm shift from thinking that LBEs are entertainment destinations to re-conceptualizing them as great, upscale, social destinations targeting adults rather than everyone in the family. Great contemporary food and beverage becomes a major attraction and the entertainment shifts to a less prominent role.

Location-based entertainment no longer has the draw it did just a few years ago, as now entertainment alternatives are conveniently available in the digital world 24/7, not matter where you are and at low or no cost. The LBE formulas of just a few years past are no longer future proof. Be a disrupter before you get disrupted, because that disruption is already underway.

To learn more about the long-term trends affection LBEs, check out our company’s white paper, The Perfect Storm: LBE Disruption & Opportunity.

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Vietnam’s Largest FEC Opens

Helio Center, considered Vietnam’s largest and most modern FEC, opened to the public on February 11, 2015 in time for the Tet holiday. The 157,000 square foot (14,600 square meter) indoor and 2.5-acre (one hectare) outdoor family entertainment center is located Da Nang, Vietnam. Da Nang is located on the coast midway between Hanoi and Ho Chi Ming City (formerly Saigon). It has a metropolitan area of one million and is a very popular tourist location for Vietnamese and foreigners alike with its beaches, 5-star resorts and less crowded and laid back lifestyle.

Randy White, CEO of the White Hutchinson Leisure & Learning Group, designers and producers of Helio Center, said work started on the project in July 2012 with market and culture feasibility. It then immediately proceeded to design and construction. Considering the complexity of the building design with its ground floor, mezzanine and a basement garage for 1,000 motorbikes and 53 automobiles plus sourcing and procurement of entertainment equipment and finishes from all over the world, Randy said, “The FEC was actually completed in a very timely manner, even by Western standards.”

Man Quang, CEO of Helio Center, said, “It is exciting to be able to bring a totally new entertainment experience to Vietnamese people with this state-of-art, world class FEC. I am confident it will be a major attraction and bring much joy and happiness to both residents and tourists for many years to come.”

The FEC includes both adult-oriented and family attractions:

  •   14 lanes of duckpin bowling including VIP lanes
  •   Children’s edutainment (play and discovery) center
  •   Indoor ice skating
  •   4 indoor rides
  •   Combination Ballocity and soft modular play structure
  •   150 redemption, simulator and video games
  •   Redemption prize store
  •   Indoor go-karts
  •   19 private karaoke rooms
  •   Celebration and birthday party rooms
  •   Multi-purpose theater-style performance, karaoke and meeting room
  •   Coffee and bakery café
  •   Food court featuring five different world cuisines and a bakery

The outdoor area includes:

  •   Children’s discovery play garden
  •   Multi-level seating for the coffee and bakery cafe
  •   Restaurant village which will seat over 600 buildings featuring different cuisines
  •   Children’s boating school
  •   Children’s motorbike and automobile driving school
  •   Bumper boats

 

At peak times, the FEC will accommodate 4,000 guests. The center employs a staff of 600. Helio Center cost more than USD 45 million by Western cost equivalents.

Helio Center Grand Opening Ribbon CuttingHelio Center started its marketing campaign, predominately on Facebook, well before opening. By opening, it had already registered 50,000 members who will use its Power Card debit card system to pay for games, attractions and food and beverage, get discounts and earn points towards VIP status.

Unusual for entertainment projects, White Hutchinson designed the building with a natural daylighting roof monitor system that allows the majority of the center to be totally lit by daylight during the day to save on electrical lighting costs. The project also incorporates a number of special acoustic treatments to prevent it from being too noisy.

A unique feature of the basement garage is the security system it has to prevent the theft of motorbikes, something you won’t find in the West. There is a small charge to park your motorbike, 2,000 dong (10 cents US). When a motorbike enters the garage, they stop at the security check-in, pay and a computer-camera system records both the driver’s face and the license plate. Then when leaving, the driver drives through a security checkpoint that verifies the original driver is on the motorbike by matching the license to the original photo of their face.

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Smartphones are sucking the fun out of leisure time

Our company’s Leisure eNewsletter and this blog have been giving continuing coverage to the disruptive impact digital technology is having on location-based entertainment (LBE) including data on how the use of digital technology both at home and on mobile screens is taking leisure time and discretionary spending market share away from LBEs.

Now along comes research that indicates a new type of disruption – that the use of digital technology, and more specifically the smartphone, is actually decreasing the fun many people have during the leisure time when you aren’t on the phone, included at LBEs.

Researchers at Kent State University surveyed a random sample of 454 undergraduates and examined how different types of cell phone users experience daily leisure. They measured each person’s total daily smartphone use, personality, and experience of daily leisure. Students were categorized into three distinct groups based on similar patterns of smartphone use and personality: low-use extroverts, low-use introverts, and a high-use group who averaged more than 10 hours per day of smartphone time (about 25% of the sample).

Compared to the two low-use groups, this high-use group experienced considerably more leisure distress – feeling uptight, stressed and anxious during free time.

On the opposite end of the spectrum, the low-use extrovert group averaged only three hours of smartphone use per day and showed the least boredom and distress and greatest tendency to challenge themselves during leisure time.

The researchers suggest that for all those who feel the need to check their phones incessantly, the issue may not be that they enjoy their phones more than others do; rather, the obsessive habit could demonstrate a need to stay connected, an obligation to remain in the know — which ultimately spills over into their leisure time.

“In our previously published research, we found that high-frequency cell phone users often described feeling obligated to remain constantly connected to their phones,” one of the researchers said. “This obligation was described as stressful, and the present study suggests the stress may be spilling over into their leisure.”

So it’s bad enough that smartphones are taking leisure time and spending entertainment market share away from LBEs. Now we learn that at least for one segment of the population, the highly addicted smartphone user, it is contaminating their enjoyment of other leisure time activities, including time spent in an LBE and accordingly decreasing the perceived value of attending.

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The digital death of boredom and its implications for LBEs

I’m bored; let’s do something. Not all that many years ago that is something most people frequently experienced. Back then basically all we had to do at home was listen to radio, watch network TV shows on our cathode ray televisions and play board games. And when we were away from our home electronics, we could really become bored. When you’re bored, you look to do something to relieve that boredom. A visit to a location-based entertainment venue was often the answer back then.

Today that situation has dramatically changed. We are bored far less often due to all the digital content options at home, whether it is watching streaming movies, television shows or sports on our HDTVs, playing video games or immersed in social media or other content on our digital screens. And we are no longer bored when away from our home electronics with the smartphones and sometimes tablets we carry with us everywhere. According to Nielsen’s Third-Quarter 2014 Cross-Platform report, U.S. adults spent an average of 46 hours, 44 minutes per month connected with content through a smartphone app or mobile web browser. That’s almost double the 26 hours, 13 minutes they spent in the same quarter two years earlier. And Nielsen reports that 68% of adults used smartphone apps to relieve boredom or to kill time, 70% of the time while they were by themselves.

Smartphone content time on app or web browser copy

Boredom used to be location-based entertainment’s friend. That has changed today. The bar has been raised to get guests in the front door of entertainment venues, as they’re rarely bored anymore.

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