Cover Story - Future Forward - February 2019

CoverStoryIntro

Funworld looks at global trends in the IAAPA FEC Benchmark Report and at facilities across the world

by Mike Bederka

How do you stack up to other family entertainment centers (FECs) out there? It might be a tricky question, as gut instincts can deceive and lead facilities to misjudge their business, overlook opportunities, or undercharge guests. 

To help prepare its members with the most accurate information available and give a snapshot of the industry’s future, IAAPA has released the association’s FEC Benchmark Report, which covers topics including demographics, admissions, attractions, guests, parking, human resources, and financial details. Based on fiscal year 2017 data from facilities around the world, the report breaks out results by location, attendance, and type (indoor, outdoor, and mixed), and concentrates on metrics management can use when reviewing operations.

Melissa Teates, director of industry research and analysis for IAAPA, compiles this FEC resource, as well as other industry reports for the organization. She says despite the bevy of information the document delivers, some people remain reluctant to complete the survey that fuels the report’s creation.

“They say they’ve been in the industry forever and have a feel for what’s going on,” Teates says. “I understand that perspective, but maybe they’re still missing something. Maybe their attendance isn’t as strong as it should be, or maybe their customers aren’t staying as long as others. You want to know how you compare to others.”

VR/AR Top of Mind

The benchmark report results show diversity in the global FEC marketplace, from attraction mix to facility size to revenue model, Teates says. However, pricing of FEC activities proved to be an effective metric for comparison across all venues. 

The average pricing for individual activities ranged between nearly $6 and $9, with a bumper boat ride the lowest at $5.98 and an hour on a ropes course the highest at $8.62. The two most common activities included one round of mini-golf and a single laser tag game, which averaged $7.07 and $7.78, respectively. All attractions saw a small price increase compared to the last IAAPA FEC Benchmark Report based on fiscal year 2016.

Among all the activities, respondents reported redemption and video games as the most lucrative for their facilities, says Teates, noting that while the report didn’t specifically ask about virtual reality (VR) and augmented reality (AR), she anticipates these attractions to be on the minds of many owners and operators in the near future. 

“VR certainly has everybody’s attention,” agrees Rob Thomas, president of Mulligan Family Fun Centers with three California locations.

Pleased with the results of the four-player VR shooter he purchased in early 2018, Thomas set up several appointments at November’s IAAPA Attractions Expo 2018 to check out other options. He focused mainly on multiplayer solutions to avoid any issues with throughput.

“We’re still trying to figure out the best way to monetize it correctly,” Thomas admits.

The quickly growing ZavaZone FEC chain will look to dip its toe into the AR waters as well—in particular, with AR-enhanced rock climbing walls.

“Fun in motion is one of our taglines,” says Joe Henry, ZavaZone co-owner. “That really drives us when we add new equipment. We try to fuse entertainment and fitness.”

Changing Views

After debuting in Rockville, Maryland, in April 2016, ZavaZone added a second location in fall 2017 in Sterling, Virginia, with franchises coming to Seattle, Washington; Portland, Oregon; and Northern Virginia. Henry plans to have 15 to 20 franchises up and running in three years. 

He anticipates this solid growth due to the fact that customers today desire “a healthy, authentic experience” for the whole family. The FEC features trampolines, ninja courses, and jump areas, as well as a dedicated “parent zone” for adults to retreat to for some quiet and boosted Wi-Fi.

“I want my mother to be comfortable when she comes here for a birthday party,” Henry says. 

He originally sought to fill light industrial retail spaces, ideal with high ceilings and few columns, in urban settings. However, parking issues coupled with the rapidly changing real estate market have Henry now looking toward the empty big-box stores that dot suburban and rural regions.

“People drive more in these areas,” he says. “In Washington, D.C., being five miles apart is like being on the other side of the moon. But in upstate New York, there’s a much bigger circle I can draw from, so that’s changing my view.”

The IAAPA FEC Benchmark Report backs this up. It found guests traveled an average of 19.5 miles and spent 2.6 hours at an FEC per visit.

Season Passes and Minimum Wage

The report also discovered that just 2 percent of respondents offered season passes. It’s a small number for sure, Teates acknowledges, but this could mark the beginning of a trend as no facilities offered season passes when the previous IAAPA FEC Benchmark Report probed the issue.

Thomas is one of the people jumping on the bandwagon. In 2018, he successfully tested season passes at his smallest and lowest volume park in Palmdale, California. Guests averaged about three visits per pass, and Thomas saw enough increased spending on games and food and beverage for him to consider rolling out season passes at his other two California locations.

Along with driving revenue, Thomas plans to explore ways to decrease costs—namely because of the rise in minimum wage. 

Minimum wage staffers at his one venue now earn $13.25 an hour (going up to $14.25 an hour in July) and $12 an hour at the other two. Perhaps not surprisingly, the IAAPA FEC Benchmark Report showed payroll represented the highest cost for owners, with rent/mortgage a distant second.

To reduce front-line staffing levels, he’s currently working with his point-of-sale provider to move toward kiosk-type operations. With this touchscreen setup, guests could easily order food or add gameplay from various locations throughout the facility. Thomas doesn’t expect much of a customer backlash with the change.

“Most guests these days are tech-savvy to check themselves out,” he says.

Learning from Each Other

The report included input from FECs in Asia-Pacific, Europe, the Middle East, Latin America, and North America. In this issue, Funworld takes a deeper look at a sampling of FECs around the world. Read on to discover how FECs are innovating at home and beyond.

Fast Facts from the 2018 IAAPA FEC Benchmark Report

  • The average prices FECs charged per attraction generally went up across the board compared to the 2017 IAAPA FEC Benchmark Report: $5.81 to $5.98 for a bumper boat ride; $6.63 to $7.07 for a mini-golf game; $7.36 to $7.78 for a laser tag game; $5.92 to $6.77 for a rock wall climb; and $7.64 to $8.62 for one hour of a ropes course. 
  • More than half of FECs reported revenue exceeding $1 million.
  • FECs operated an average of 301 days in the 2018 report, up from 294 days.
  • Overall, people spent an estimated $21.95 per guest, including admission/tickets, games, food and beverage, and retail.
  • FECs had an average of 311,354 visitors in the 2018 report, a jump from 282,857.
  • Guests averaged 19 years old.
  • Group sales accounted for 37 percent of attendance. 
  • Most FECs surveyed stood at 20,000 to 40,000 square feet in total size, slightly lower than before.
  • The average price for one-day general admission is $21.08.
  • Most FEC staff members range between 21 and 30 years old.

The IAAPA FEC Benchmark Report is complimentary to IAAPA members as a benefit. Non-members can purchase the report for $499. For more information or to learn about other IAAPA benchmark reports, visit IAAPA.org/research.