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Nascent new technology will be a game changer

Virtual reality isn’t just an exciting new technology. It’s a new type of media and a game changer that has high potential to change the way we live, especially our leisure lives.

Imagine sitting home in your comfy lounge chair sipping a cold one while you are transported to Progressive Field to watch the Chicago Cubs recent World Series win just like you are sitting there instead of watching the action on your TV. Or how about being immersed in watching the US Open, or an NFL or NBA game or how about attending a Live Nation music concert just like you were there. Well, that is not something in the future. It’s already here. NextVR makes it possible to attend any of these events from home in 360-degree virtual reality (also called stereoscopic 3D VR), just like you are there. And they’re not the only company
streaming live VR sports and entertainment events to our living rooms. Sportsnet will offer 360-degree virtual reality of NHL games. And coming soon will be eSports. Next year you’ll probably be able to watch the entire Super Bowl in 3D virtual reality.

This is just the beginning of all the new live steaming VR at-home sports and music experiences that will be available to enjoy from our personal immersive caves.

Right now the VR headsets are still big, bulky, heavy and basically uncomfortable. The maximum time that most people will wear them with great content is around 35 minutes. But that is quickly changing. In the near future headsets will be very light and comfortable, the equivalent of wearing a pair of glasses, enough to wear for an entire event. VR glasses will be coming out this year that only weight about 5 ounces. With that and reasonable VR glass prices, 360 VR can really go mainstream.

Diodle lightweight V1 VR glasses

So there is no doubt livestreaming 360 VR will disrupt the sports and live music and entertainment industries. All the more reason to stay home rather than attend.

So why am I writing about the sports and live entertainment industries when our company predominately works with out-of-home community leisure venue (CLV) clients, which includes family entertainment centers (FECs) and entertainment venues that include bowling, laser tag and other interactive games? It’s real simple. If you had owned a CLV around two decades ago, in terms of competition, you only worried that someone wouldn’t open a new center down the street. Your competition was limited to bricks-and-mortar locations.

That has all changed today. Today, if you own a CLV, your competition is just about everything else people can do with their leisure time, and that includes just staying home with all the digital technology options available today. The CLV industry is undergoing disruption no different than retail stores are with ecommerce and the movie industry is with live streaming Netflix onto the living room HDTV. Unfortunately, no different than the retail industry just a few years ago, most CLV owners haven’t recognized the growing disruption from digital at-home entertainment. With 360 VR it is going to get a lot worse and those that don’t respond will lose market share, no different than the noticeable loss of market share Amazon and ecommerce is now having on retailers.

So you don’t think livestreaming VR sports and music events is competition to CLVs? Here’s why it is. People have a choice to go out or just stay home. Going out takes far more time, effort and money than staying home. You have to travel to some venue, which takes time and has cost. Stay home and all that time is saved. Maybe you don’t now go to live music events due to the time it takes and cost. With livestreaming VR you will be able to immersively enjoy them in your living room. So do you stay home and enjoy the music concert in 360 VR or do you go out to some CLV? Many people will take the path of least resistance.

360 VR is what I call the digitalization of place. The digital world brings the place into your home. Yes, it’s still only visual and aural immersion, not total physical immersion, what is called total presence like on Star Trek’s Holodeck. But it is a whole new superior experience compared to the 2D viewing options we have been previously limited to.

If you follow my blogs and our company’s Leisure eNewsletters, you’ve read that consumers make leisure choices in terms of the trade-off between Fidelity, the quality of physical out-of-home experiences, and Convenience, the ease of access in time, effort and money the digital world offers. The more Convenient digital leisure options become, the higher the Fidelity of an out-of-home experience has to become to compete and attract people.

What livestreaming, or even non-live 360 VR is doing, is adding an improved fidelity component to Convenience, dramatically raising the bar that a CLV experience will have to achieve to get people away from their VR glasses and out of their homes. We previously said you had to be High Fidelity to get them out of their homes. With the mainstreaming of 360 VR, CLVs will now need to become ULTRA High Fidelity to compete with at-home VR experiences that will become mainstream in the very near future.

Posted in digital, Disruption, Experience, Leisure, Location based entertainment, Out-of-home, sports, VR & AR | Tagged , , , , | Comments Off on Nascent new technology will be a game changer

First mover gets better by default

Back in November, in my blog, First mover doesn’t succeed unless its also best mover, I compared two first mover community-leisure center (CLV) chains that are rolling out centers across the country, Main Event Entertainment with its new model, and Top Golf. Main Event was the example of a first mover that wasn’t a best mover, whereas Top Golf was the example of a best mover.

Point Orlando, a 408,000-square-foot retail-restaurant-entertainment destination on International Drive in Orlando, Florida, originally opened in 1997 and has been under redevelopment since 2007. As part of the redevelopment, it needed another entertainment anchor to drive footfall. Its owners, Brixmor Property Group, finally landed Main Event by making 48,000 square feet available on the ground level under the Regal Cinema IMAX theater.

However, the space was not the standard size, dimensions and shape of Main Events’ prototype big box centers they are building from the ground up everywhere else. For one, the space was longer and not as deep. It also had lower ceilings. This forced Main Event to change its design.

I had a chance to visit the center several weeks ago. It looks like Main Event’s need to come up with a different design to fit the space at Pointe Orlando may be its good fortune, as the center is a major improvement over its big box prototypes. For one, with a lower ceiling, the space is more intimate. You don’t feel like you are in their typical high ceiling, wide-open big box. Different areas have more definition, rather than just being spread out on a big box floor where you see everything from one location. They also did something smart with their bowling. They put family bowling at one far end next to the gameroom and ropes course. At the other far end is the adult area with billiards and an adult bowling area. The bar and restaurant areas separate the family and adult areas.

So although they continue to try to follow yesteryear’s FEC model of serving two markets at once, families with children and adults (no longer the most successful formula in the evolved specialized age of CLVs that focus on one niche market), at least the two different areas are a better match for each group in terms of separation and specialization.

With the lower ceiling and the different space shape, Main Event ended up with more walls that allowed for far more attractive interior finishes. In fact, they definitely upgraded the interior feel of the space.

They still haven’t mastered how to be a destination restaurant, especially with the design, as the restaurant area is just one big space with the tables spread out in a large open area, not very intimate in feel. On the plus side, they do have an outdoor patio area. The food was mediocre at best. My pizza had what at least felt and tasted like a frozen par-baked crust. The crust was almost tasteless.

Point Orlando has many high quality restaurants including Copper Canyon Grill, Maggiano’s Little Italy, The Capital Grille, Tommy Bahama & The Oceanaire Seafood Room. Compared to all the other dining options at Pointe Orlando, Main Event will have little appeal as an adult dining destination, although I can see it working for families. And in terms of adult entertainment, Main Event is competing with Dave & Buster’s and King’s, both just 5 minutes away up International Drive. They each offer free parking, whereas it’s pay parking in Pointe Orlando’s garage, $6 for 2-3 hours and $8 for 3-4 hours. In terms of the expectation for quality food in a bowling-based venue, Splitsville Luxury Lanes in Disney Springs has set the standard in Orlando. It even serves sushi. Main Event’s food comes nowhere close.

One thing Main Event continues to completely fail at is acoustics. At Pointe Orlando, they did nothing to address it. They didn’t even use carpet throughout most of the center, including in the gameroom (a standard industry practice), which can help moderate poor acoustics. I’ve heard from some residents in Orlando that on a busy night it is almost impossible to hold a conversation. Main Event still doesn’t understand that the primary reason people go out to CLVs of all types is not necessarily the entertainment, it is to socialize. And that requires being able to hold a conversation without shouting.

One potential problem the Pointe Orlando center may cause Main Event is that it is nicer than their other locations. Since Orlando is a major tourist destination, many customers from their other locations come to Orlando on vacation. After visiting the Pointe Orlando Main Event, they’re expectations are raised for what to expect at a Main Event, so when they go back home, they could be less satisfied with the Main Event in their home town. Customer satisfaction = what customers expect minus what they actually experience.

This is not good for Main Event, especially since their same store sales for the six months ending December 31st were down 2.9% while other entertainment chains like Dave & Buster’s saw increases (+1% for D&B’s 2nd quarter and +5.9% for their 3rd quarter ending October 31, 2016).

Despite its flaws, the Orlando Main Event is a clear contrast to the typical FEC big box model they are rolling out with their built-from-scratch new centers. The Orlando Main Event clearly shows how inferior the big box model is in many respects.

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First mover doesn’t succeed unless its also best mover

In the community leisure venue (CLV) industry, which includes what are commonly known as FECs, hybrid bowling and laser tag centers, we are seeing new concepts and business models emerge. The conventional wisdom in the industry is that first to market can establish a stronghold in the market, a first mover advantage, making it difficult for later entrants to capture market share. However, a first mover advantage is never a sure thing. Being a first mover at the expense of being the best mover will often lead to a competitive disadvantage.first-mover-advantage

One simple example in the consumer product market is Fage, the first Greek yogurt that came to American grocery shelves. It wasn’t until almost a decade later that Chobani arrived. Instead of focusing on plain yogurt or family-size containers like Fage, Chobani offered single-serve yogurts in mainstream flavors and now has a market share many times the size of Fage. While speed to market has its advantages, it clearly isn’t always the winning strategy. Futurist Joel Barker put it this way, “Speed is useful if you are running in the right direction.”

Today we are seeing new entertainment-oriented CLVs, the classic FEC models, only making incremental changes as they view their only competition as existing FECs; they look at what their competition is doing and try to up the ante, get a little better. The problem with this approach is that since the turn of the Century, the pervasiveness of the Internet, social media and mobile devices has caused seismic shifts in peoples’ tastes and how they live, learn, work, socialize and engage in leisure activities. As a result, the new FECs are only tweaking legacy business models from bygone days when the consumer and the leisure landscape were far different. And the accelerating pace of technological and digital innovation means that evolution is still underway. Legacy FEC models, even with improvements, don’t match the values, preferences, behaviors and aspirations of the current and future digitally connected leisure consumer. That approach is destined for failure.

As a result of having so many out-of-home leisure options plus so many at-home and screen-based social and entertainment options, today the winning formula for a CLV now requires competing with every other option consumers have for where they can spend their limited leisure time and discretionary spending. That now means best to market has to be best compared to all those options, not just better than the FEC down the road.

To be relevant and compelling to the evolved leisure consumer means letting go of the past FEC models developed in a completely different era for a completely different leisure consumer. Today that requires offering what is a High Fidelity, social, food and drink and entertainment experience, not the legacy model of almost totally focusing on entertainment attractions. As a result what we are now seeing emerge are completely new and innovative CLV business models.

Here’s a comparison of two fast-expanding CLV chains trying to gain first mover advantage. One is still stuck in the past with nothing more than a tweaked FEC model, while the other has developed a completely new, highly relevant best mover CLV business model.

I’ll look at Main Event Entertainment. It’s new owners, Ardent Leisure, a publically traded company based in Australia, bought the company in 2006. In 2012 they started rolling out a new Main Event model completely different than the existing centers they purchased. There are currently 18 of their new model FECs and Ardent says they plan to open at least 100. The company says their basic strategy is to get first mover advantage in 2nd tier cities.

“We are executing on our strategy to build market dominance in selected locations enabling us to “own” territories” – Ardent Leisure September 2016 Corporate Brochure

The problem with their strategy is they will probably lose whatever advantage they may first gain, as they are not best to market in today’s leisure market. The new Main Events are just a tweaked version of the old classic FEC model and the later hybrid bowling model, which are fast turning into dinosaurs. A second problem with their approach is it tries to be attractive to both families with children and adults coming without children. Today trying to be all things to different types of customers is no longer a winning formula. Additionally, their centers are noisy big boxes without a strong contemporary destination food and drink component. That’s yesterday’s formula only tweaked with a flashy storefront and some minor improvements. To win today you need to zero in on a target market rather than cast a too-wide net. The facility has to have great design, great hospitality and offer a great social experience with a major, significant, appealing food and drink component. To win today, a CLV also has to be designed to have high appeal to a higher socioeconomic customer than in the past. Middle income families are no longer the viable target market. Today, the top 40% of income households account for almost three-quarters (72%) of all spending at CLVs.

Ardent Leisure is also making a classic mistake with their new model rollout. They are just cookie cuttering an unperfected model as fast as possible. They are rolling it out so fast they don’t have the time to learn from the early units on how to improve the later ones.

“The success of 12 [new] centres across nine states outside Texas proves the broader roll-out opportunity.” –  September 2016 Corporate Brochure

Apparently their new centers are losing their appeal as Ardent has reported a 1.7% decline in same store sales while most other CLVs are seeing increases with the improving economy (actually the decline is more like 3.5% when adjusted for inflation. In fact, the same store decline for the new models is probably worse, as the same store sales figures include the original model Main Events that are well established.) This is a case of the classic sophomore slump. You really don’t learn how good a new model is and what is required to make it successful until later into its 2nd year. Just about any new center does well when it first opens as everyone checks it out. The big issue becomes will people consider it attractive enough to come back and promote it to their friends and on social media. That’s why new models take years to perfect.

That is probably what’s happening to the new Main Event model that is not evolving. A permanent sophomore slump is slowly rolling through the new units. What we may be seeing with Ardent Leisure’s rapid expansion is a classic case of corporate hubris expanding a flawed model.

In Main Event’s case, first to market is not best to market. Right now in many markets they are the best of the worst compared to other FECs, but certainly not best to market compared to consumers’ many competing leisure options. Furthermore, the new Main Events are extremely vulnerable to new truly best to market CLV models entering their markets.

Just the opposite is true with TopGolf. TopGolf has taken the golf practice driving range and disrupted its model to create a completely new first to market, but also a best to market leisure venue for adults. It’s not about golf, as they’ve taken the sport out of golf. The majority of their customers are not golfers. And they have created an experience focused on adults, not one designed for multiple target markets like Main Event. They’ve turned whacking a golf ball into a contemporary social game for the digital age. No matter where you are in the facility or what you’re doing, food and drink is a fundamental part of the experience. The experience at TopGolf is not about entertainment anchors like at Main Event. Rather it’s about a great social experience whacking golf balls while enjoying food and drink with friends. Today, the winning best to market models are about great social experiences facilitated by interactive social games paired with great food and drink.

There are other game-changing new CLV models in addition to TopGolf opening in many markets. And interestingly, they don’t focus on the entertainment, but rather on creating a great social experience. Some even have the word social in their names.

So the bottom line is very simple. Being first to market won’t give you a long-term advantage unless you make sure you are also best to market. And today, the bar is very high on what it takes to be best to market, as best means in comparison to every other type of social, dining and drinking and entertainment leisure option, out-of-home as well as at-home. If you don’t meet that best to market standard, consumers will decide you really aren’t that good, attendance will decline and soon a new best to market concept, such as TopGolf, will take an even larger share of your business away.

This is exactly why a number of years ago our company changed the direction we were taking our clients’ projects. Rather than just tweak some out-of-date legacy model and focus on the entertainment like traditional FECs, we’ve focused all our design and production work on offering the higher socioeconomic market a High Fidelity social experience build around top quality contemporary food and drink and interactive games. TopGolf and other new model CLVs are proving this is now the first and best to market formula for long-term success.

Posted in Bowling, Disruption, Entertainment, FEC, Food & beverage, High Fidelity, Leisure, Leisure time, Location based entertainment, Out-of-home | Tagged , , , | Comments Off on First mover doesn’t succeed unless its also best mover

Pokémon Go introduces a new disruptive entertainment technology

Pokémon Go is the hottest craze right now and is quickly becoming one of the most viral mobile applications of all time. Eleven percent of U.S. Android owners have installed the app and six percent are engaged in the game on a daily basis, staring at their phone screens as they walk the streets looking for animated characters. Pokémon Go use now surpasses Twitter’s daily users. People are spending more time in its app than on Facebook. Besides being the hottest new mobile game and a major phenomenon, it’s most significant impact is that it has introduced of a totally new disruptive technology to the consumer entertainment landscape.* Pokémon Go represents one of those moments when a new technology, in this case augmented reality, breaks through from being a niche use by early adopters to going mainstream.

Pokémon Go players move through the physical world following a digital map on their screens, searching for cartoon creatures that appear at random. They look through their smartphone cameras to find Pokémon. When an animated creature appears, they toss Pokéballs at it until it is subdued. (If you haven’t yet been caught up in the Pokémon Go craze and want to learn what the game is all about, check out this video).
Pokemon Go

Up until now entertainment options where basically limited to board and card games, 2D screen-based entertainment and games in the home or on the mobile screen, and visits to entertainment venues. Pokémon Go has now brought the mixed reality of combining augmented reality and real world reality to everyone. Why is it so disruptive? Because it has expanded screen-based entertainment and game options into the entire real 3D world. Previously the only 3D real world options were available at an entertainment venue. Pokémon Go has now shown us that the entire world can be the entertainment venue. The fidelity of the game is so much higher than playing on a 2D screen. The game is free and pokécoin purchases are very inexpensive. It is social at Pokémon Go gym locations. You no longer have to pay to go to an entertainment venue to play a game or be entertained in the real world.

Pokémon Go is only the beginning of the mixed reality entertainment options that will be emerging in the near future. It is also the future of how we’re going to interact with computers. Augmented reality entertainment will be slicing into the available market pie of consumers’ available leisure time and discretionary spending. This mixed reality is a completely new form of competition that location-based entertainment venues need to take very seriously. To continue to attract paying customers, entertainment venues will need to raise the quality, the attractiveness, the Fidelity of the entertainment and social experiences they offer.

* The first augmented reality video game was Ingress by the same developers of Pokémon Go, but it never captured a large enough fan base to attract a mainstream audience.

Posted in digital, Disruption, Entertainment, Leisure, Location based entertainment, Out-of-home, video games, VR & AR | Tagged , , , | Comments Off on Pokémon Go introduces a new disruptive entertainment technology

Eatertainment webinar rescheduled for next Wednesday

Well we tried, but Citrix that hosts the IAAPA webinar had a worldwide system wide disruption at the exact time the webinar was scheduled. So the eatertainment webinar has been rescheduled for 1 PM Easter Standard Time, next Wednesday, February 17th. You will need to reregister at https://attendee.gotowebinar.com/register/5279121834839278091 .

If you are not an IAAPA member, use this access code where it asks for your IAAPA member ID – “RW22016”

I will be a presenting at the webinar along with Kevin Williams, Founder of KWP Limited and Mike Abecassis, CEO of GameTime. The webinar will explore today’s fast-evolving food and drink trend of “eatertainment” including how food and drink is becoming increasingly important to success for leisure and entertainment venues and what it takes to succeed in that space. In addition the webinar will showcase some of the more innovative and successful eatertainment concepts that combine entertainment and food.

If you are an IAAPA member and can’t join the webinar next Wednesday, it will be posted on the IAAPA website around two weeks later for viewing.

Posted in eatertainment, Entertainment, Food & beverage, Location based entertainment | Comments Off on Eatertainment webinar rescheduled for next Wednesday

Free webinar on eatertainment this Wednesday

EATERTAINMENT WEBINAR

I will be a presenting at an IAAPA webinar on eatertainment this Wednesday along with Kevin Williams, Founder of KWP Limited and Mike Abecassis, CEO of GameTime. The webinar will be held at 1PM EST, this Wednesday, February 10th.

Although attendance at the webinar is exclusive for IAAPA members, I have arranged for our non-IAAPA member readers to also be able to attend for Free. To register for the webinar, click here, and then use this access code where it asks for your IAAPA member ID – “RW22016”

Eatertainment has created new opportunities for FECs to move beyond being solely entertainment destinations to increase both their attendance and revenues and allow savvy operators to engage with a broader base of customers.

The webinar will explore today’s fast-evolving food and drink trend of “eatertainment” including how food and drink is becoming increasingly important to success for leisure and entertainment venues and what it takes to succeed in this market place. In addition the webinar will showcase some of the more innovative and successful FEC concepts that combine entertainment and food.

To register for the webinar, click here and fill-in the IAAPA membership blank with RW22016

KEYNOTE at Entertainment Experience Evolution conference

Later this month I will be the keynote speaker at the prestigious Entertainment Experience Evolution conference to be held at LA Live, February 24-25, 2015 in Los Angeles. EEE brings together top leaders and executives in the retail, shopping center, restaurant and entertainment industries to learn and discuss how to create compelling environments and experiences to attract contemporary consumers.

My keynote is title The Digitalization of Place – Disruption & Counter Strategies. As always, I will be presenting enlightening insights into how the consumer landscape is changing and how location-based businesses will need to transform themselves to continue to capture business.

To learn more about EEE and to register, click here.

 

 

Posted in digital, Disruption, eatertainment, Food & beverage, Location based entertainment | Tagged | Comments Off on Free webinar on eatertainment this Wednesday

The Tchotchke Index is down, but has discretionary spending on OOH entertainment turned the corner?

American’s spending on tchotchkes—trinkets, junk, yard sale finds, gift shop items, home decor and other decorative items for the home—is an excellent measure of their impulse spending on stuff. It’s thought to be a good gauge of American’s economic wellbeing, rising when Americans are feeling economically flush and falling when they are feeling financially pinched. Back in 2007 the American Consumers Newsletter started to track that spending and dubbed it the Tchotchke Index.

We dug into U.S. consumer spending data to show you what has been happening to the index since it’s 2000 peak of average household tchotchke spending of $244 (in 2014 dollars). It fell to a low of $163 in 2003 following the 2001 recession, 9/11 and the dotcom bubble, recovered to $230 in 2005 and has been on the decline ever since to the low in 2013 of $104. In 2014 it when up slightly to $111, but is still down more than half (54%) from its peak in 2000.

Tchotchke index 2014

It is no coincidence that we have seen a similar long-term decline in out-of-home entertainment spending starting in the early 2000s, rising in the mid-2000s and then declining ever since – a pattern comparable to the Tchotchke Index. Many Americans through 2014 cut back their spending on not only tchotchkes, but also on other discretionary items including location-based entertainment.

The Tchotchke Index’s long-term decline is counter to an upward trend in Americans’ everyday spending. Each day, Gallup asks Americans how much they spent “yesterday” in restaurants, gas stations, stores or online – not counting home, vehicle or other major purchases, or normal monthly bills – to provide an indication of Americans’ discretionary spending. Gallup reports Americans spent a daily average of $99 in December 2015, up from a December 2009 low of $72 in the depths of the Great Recession.

Gallup daily spending chart

There are at least two possible explanations for these opposite trends – a decline in the Tchotchke Index and increasing consumer spending. One is that the spending reflected by Gallup deals more with essentials and not the totally discretionary items in the Tchotchke Index. For example, as consumers feel more economically confortable, they might buy some new clothes they had been putting off or they might buy an occasional steak at the grocery store rather than chicken, whereas they still might not feel flush enough with money to spurge on some home décor item. Another explanation is that they might be shifting their spending from stuff to experiences.

Data on community-based entertainment spending is only available through 2014, and it shows a downward spending trend, basically consistent with the Tchotchke Index. However, there is anecdotal evidence that out-of-home entertainment spending may have turned upward in 2015. We did see an uptick in movie theater per capita attendance in 2015 after its long-term decline that started in 2003 with capita moviegoing rising 4% compared to 2014, but it is still down 24% from its high in 2002 of 4.9 visits per person. There was also some growth in restaurant sales in 2015.

Cinema per capita attendance 00-15

Our company conducts our own proprietary national surveys on participation at different types of location-based entertainment venues and for different attractions. We just completed our annual survey for 2015 with 2,500 adults. The results show a definite increase in the percentage of participating American adults compared to 2014 for every type of major FEC attraction. And, with few exceptions, the increase was across all age and income groups.

What this may mean is a little brighter future for community leisure venues. However, no different than many other industries, it is the “A” businesses that are winning and capturing the lion’s share of business. With location-based entertainment, the vast majority of the business comes from higher socioeconomic households. These households seek out the high quality venues to get the most bang for their leisure time, and are willing to pay a fair price for it. Unlike just a decade or so ago, there is no longer room in the market for mediocrity.

Posted in Consumer expenditures, Entertainment, Leisure, Leisure time, Location based entertainment, Movie box office, Out-of-home | Tagged , | Comments Off on The Tchotchke Index is down, but has discretionary spending on OOH entertainment turned the corner?

Decrease in licensed drivers; its implications

A just released study by The University of Michigan Transportation Research Institute shows that there has been a continuous decrease in the number of people with a driver’s license across all age groups over the past three decades.

Decrease in licensed drivers

The younger the age group, the greater the decline. For 20- to 24-year-olds, the decline has been from 92% holding a license in 1983 to only 77% in 2014, a one-sixth (-16%) decline. The age 25 to 29 age group saw a 11% decline to 85% licensed in 2014 and the 30-34 age group saw a 10% decline to 87% licensed. And remember, this data precedes any impact that could be attributed to the recent Uber, Lyft and other ride sharing options.

This 20-34 age group, basically what are called Millennials, is a prime target market for many types of location-based leisure and entertainment venues. This trend of declining licensed drivers has implications for location-based businesses. Fewer people driving means fewer people with easy access to visiting location-based business. Of course, in some situations this may be offset by improvements in public transportation and now by the ride sharing services.

A more important implication is that the decline in licensed drivers is a result of where people chose to live, especially the younger adults, so it is affecting where many LBEs need to be located to capture that market. Our Leisure eNewsletter that will be emailed out next Monday includes an article that discusses research findings on the migration of young adults to new living locations due to their desire to reduce their commuting time and gain more leisure time. Make sure to check it out.

To subscribe to our Leisure eNewsletter, click here.

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America – a no vacation nation

In my June 2015 blog I reported on Americans’ plans for taking a vacation in the coming summer months. Skift, a travel intelligence and marketing company, periodically surveys Americans about their vacations and just released the results from their January 2016 survey on the actual vacations that Americans took in 2015. The results are not encouraging for any location-based leisure venues that cater to vacationers, whether they are out-of-town on a trip or on a staycation at home. 41% of Americans didn’t a single day off in 2015 and another one-sixth took less than five days of vacation. Those are the same percentages as the results for 2014 (within the range of statistical significance).

# vacation days 2015

Some other highlights from analysis of the data include:

  • U.S. Midwesterner are the least likely to take vacations, while residents of the North, East and West the most likely to.
  • Americans living in rural areas are the biggest group taking no vacations, compared to those living in urban and suburban areas.
  • Wealthy Americans took the most number of days off in 2015, while the opposite happened at the poorer ended of the income spectrum.
  • Parents and their families have more trouble taking vacations than the non-parents.
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Looking back and looking forward at the FEC industry

Here we are at the end of one year and the beginning of another. This is the time when the media recaps the major and best events during the past year and makes predictions of what is ahead in the New Year. I’m going to take a little different direction in this blog and briefly look back far more than one year through the history of the family entertainment center industry and give predictions of what the future holds for its success.

What is referred to as the family entertainment center industry actually has its roots with children’s entertainment centers, probably back in 1977 when Nolan Bushnell created the first Chuck E. Cheese’s Pizza Time Theatre in San Jose, California. It wasn’t till the late 1980s and early 1990s that indoor centers began to offer a broader range of attractions targeting not just children, but all members of the family, meaning all age groups. Thus the term “family entertainment center” or FEC came into being.

The term FEC has survived to this day. Unfortunately it perpetuates what is proving to be a dated legacy concept that still, for the most part, continues to define the industry – designing a center with a little bit of something for everyone in the belief that this strategy maximizes attendance and revenues. However, this now often results in a mediocre performing center that is not special to anyone, and particularly not appealing to adults.

One variable that as changed over the years since the original indoor FECs first opened their doors is the decline in the proportion of the American population that are households with children. Between 1990 and 2014, the percentage of households with children has declined by one-sixth (17%). Furthermore, the choice family market, married-couples with children, has declined from over 3/4s of all households with children to only 2/3s. These demographic changes impact the old school formula’s success since the family market is now smaller, while the adult-only market has grown (remember, the adult market includes adults who are part of the family market, but who come without their children).

Today for sure, the adult market is a far larger market than the family market.

Family vs adult venues infographic copy

This doesn’t mean that old school family entertainment centers that primarily cater to families with children or only children centers still aren’t viable. But it does mean the opportunities for those concepts are far more limited than in the past and basically restricted to dense and more upscale family with children markets.

Over those past almost three decades, as the result of demographic and cultural changes, we have seen an evolution in the industry based on the marketing Law of Division – that a category will divide into multiple categories over time. Today we have many new categories of centers targeting different niche markets.

What is trending today as the most successful formula with the highest revenues per square foot are centers designed for young and middle-age adults that include some combination of boutique bowling, gamerooms, laser tag and other social games along with destination dining and bars. Surprisingly, this is not really a new formula, as we’ve had the Dave & Buster’s chain around since 1982, now at 83 units and growing. We’re now seeing the rapid expansion of adult-oriented concepts including chains such as Pinstripes, Punch Bowl Social, Splitsville, Lucky Strike and Kings, to name just a few, plus many independent centers.

What makes these centers far different than the family entertainment centers from back in the 1990s, besides targeting a narrower age group, is that the food and bar are no longer treated as concessions, but in most cases are anchor attractions generating around half the revenues. And although designed and operated as the centers for adults, a considerable amount a business still comes from families with children, at least school age and older, as a secondary market. That is a lot different than the family entertainment center model that targeted the family, so really didn’t appeal to adults.

So what does the future hold? It holds success for centers designed for the adult market that include a combination of social games and destination food and beverage, as well as other specialized concepts targeting niche markets of sufficient size in their trade areas.

Posted in Bowling, Demographics, eatertainment, FEC, Food & beverage, Household composition, Location based entertainment, Millennials, Out-of-home, restaurant, Trends | Comments Off on Looking back and looking forward at the FEC industry