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White Hutchinson Leisure & Learning Group, Kansas City, MO, USA

Don't be a prisoner of the past; it's a whole New Reality for FECs and LBEs

The past decade or so has brought major changes to the landscape of family entertainment centers (FECs) and other types of location-based entertainment (LBE). The changes have been occurring at a slow pace, so like the frog in the pot of slowly heated water, many in the LBE industry have not noticed the change. The Great Recession dropped sales across the board for all types of LBEs. However, those sales declines were only a continuation of pre-recession trends that were already well into play.

Many existing operators as well as new FEC and LBE developers continue to operate under the belief that as the economy improves, the sales declines of the recession will disappear. In other words, things will get back to normal. Unfortunately, that mistaken belief makes them what we call prisoners of the past. Their thinking is locked into past paradigms rather than the New Reality.

Over the past years our company has been researching trends for all types of location-based leisure (LBL), including family entertainment centers, bowling centers, amusement parks, museums and other cultural venues, sports venues, cinemas, national parks and restaurants. Our research has looked at spending, participation rates, socioeconomic participation, time use and other dimensions of the American public’s use of LBLs. We have found consistent trends occurring across all types of out-of-home leisure; trends that are having a major impact on not only attendance and revenues at leisure venues, but even more importantly, what the new formulas need to be for LBLs to be successful operating in the New Reality.

In summary, here are the trends that have and continue to shape the New Reality for LBLs.

• Digital media, including social media and video games both in-home and on mobile devices, is capturing an increasing share of both disposable leisure time and entertainment expenditures for all socioeconomic groups. Social and entertainment experiences are slowing migrating from the real world to the virtual world.
• Average household spending on audio and visual equipment and services far exceeds spending at LBEs by a factor of 5.4 to 1.
• Spending on cell phone (many now smart) equipment and cellular services has dramatically increased 367% since 2000 to four times average household LBE spending in 2011.
• A greater share of away-from-home entertainment and restaurant spending is shifting from spending on trips to spending in the local community, what is commonly referred to as staycation.
• Higher socioeconomic households have a declining amount of leisure time.
• Higher socioeconomic households are increasing their LBE spending per visit in the quest for higher quality and premium (higher fidelity) experiences while lower socioeconomic households are decreasing their LBE spending.
• Households where the head of the household is age 35-54 are the biggest spenders at community-based LBEs.
• Overall attendance at all types of LBEs is on the decline. Declines are greatest for not only lower socioeconomic households, but also the middle class. Higher socioeconomic households represent an increasing majority of the LBE market, a trend known as social stratification.
• Higher socioeconomic households are shifting more of their away-from-home leisure and entertainment activities to weekends.
• The social component of LBE experiences is increasingly important to people’s perceived value of the experience, more so than the entertainment (see article in this issue: Industry terminology is limiting its evolution; Get unstuck (www.whitehutchinson.com/ news/ lenews/ 2012/ november/ article109.shtml#article) ).
• The social experience of dining and drinking together can be a greater driver of attendance than entertainment
• Higher socioeconomic households, who now account for about half of all location-based entertainment spending, are seeking authentic and social-entertainment and social dining (social-tainment) experiences and are willing to pay a premium price for them. Price alone is not the determinate of value for them.

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