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2002-2011 Changes to Household Location-Based Entertainment Spending

The world of entertainment is evolving and toppling old models. At its core is the rapid growth of the Internet and digital technologies. How, where and when entertainment is consumed has been changed by less expensive in-home and always available mobile digital entertainment and social media.

The changing landscape of entertainment is having an adverse impact on location-based (bricks ‘n’ mortar) entertainment. The following infographic shows the changes to American households location-based entertainment (LBE) spending (inflation-adjusted) over the decade from 2002 to 2011 by quintiles of household income.

click on infograph to enlarge

In 2002, the highest 20% of income households ($95,000+ incomes) accounted for 44% of all LBE spending. It grew to almost half (48%) in 2011. Household LBE spending has declined for all income groups with the highest quintile group showing the least decline. Overall, the average American household spent 18% less on location-based entertainment in 2011 than 2002.

click on graph to enlarge

These declines were not caused by the Great Recession, but rather are a long term trend.

Most of the decline is attributable to reduced spending for entertainment on trips. Average household spending on trips declined by 31% while spending at community-based LBEs only declined 9%. This is known as the staycation trend, the shift of spending to local entertainment and leisure. In 2002, average household entertainment spending on trips was 44% of all LBE spending. It was down to 36% in 2011.

This spending data is consistent with data on Americans’ use of time that we reported in the August-September issue of our company’s Leisure eNewsletter. The overall participation at location-based leisure venues declined by 17% between 2003 and 2011. What this strongly suggests is that the decline in household entertainment spending is mainly attributable to declines in attendance, not per capita spending on visits. The greatest attendance declines have been with the lower socioeconomic households.

This is not doom and gloom for the LBE industry. There is ample opportunity for success for LBEs that understand the changing culture of entertainment consumption and how to apply this in their business models to compete with the digital and virtual worlds. We have been reporting on such strategies in both this blog and our Leisure eNewsletter and will continue to do so in future issues. Stay tuned.

About Randy White

Randy White is CEO and co-founder of the White Hutchinson Leisure & Learning Group. The 30-year-old company, with offices in Kansas City, Missouri , has worked for over 550 clients in 36 countries in North and Latin America, Africa, Asia, Europe and the Middle East. Projects the company has produced have won seventeen 1st place awards. Randy is considered to be one of the world’s foremost authorities on feasibility, brand development, design and production of experience destinations including entertainment, eatertainment, edutainment, agritainment, play and leisure facilities. Randy was featured on the Food Network’s Unwrapped television show as an eatertainment expert, quoted as an entertainment/edutainment center expert in the Wall Street Journal, USA Today, New York Times and Time magazine and received recognition for family-friendly designs by Pizza Today magazine. One of the company’s projects was featured as an example of an edutainment project in the book The Experience Economy. Numerous national newspapers have interviewed him as an expert on shopping center and mall entertainment and retail-tainment. Randy is a graduate of New York University. Prior to repositioning the company in 1989 to work exclusively in the leisure and learning industry, White Hutchinson was active in the retail/commercial real estate industry as a real estate consultancy specializing in workouts/turnarounds of commercial projects. In the late 1960s to early 1980s, Randy managed a diversified real estate development company that developed, owned and managed over 2.0 million square feet of shopping centers and mixed-use projects and 2,000 acres of residential subdivisions. Randy has held the designations of CSM (Certified Shopping Center Manager) and Certified Retail Property Executive (CRX) from the International Council of Shopping Centers (ICSC). He has authored over 100 articles that have been published in leading entertainment/leisure and early childhood education industry magazines and journals and has been a featured speaker at conventions of over 20 different leisure trade groups. Randy is the editor of his company's Leisure eNewsletter, has a blog and posts on Twitter - https://twitter.com/whitehutchinson
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