2011: Lessons Learned from the First Quarter

April 1, 2011 No Comments

The first quarter of any year usually sets the tone for the rest of the year and 2011’s first quarter has been quite interesting.  The major events unfolding as this issue of Tourist Attractions & Parks goes to press are the uprisings in North Africa (Libya in particular), the horrible earthquake disaster in Japan and the resulting potential nuclear power plants meltdowns, and several United States being forced to deal with their huge deficits (pension benefits owed in particular.) These events are already having an effect on world and national economic conditions. The word that sums it all up is “uncertainty.”

Gas has already reached $4/gallon is some areas of the United States, and is expected to go higher.  However, the amusement industry is starting to show some life.  Shows held during the first quarter, especially the Amusement Expo, were busy and attended by those who were interested in expanding their businesses. Interest rates are still low and great financing and leasing deals are available industry wide. The last nine FECs that my company (Frank) opened over the past five months are doing fantastic and above projections. These facilities are something new and are quickly capturing market share.  The owners (and investors) are happy they jumped in and will reap the benefits through the next several years as their competitors sit back and scratch their heads.

The Food and Amusement Industry

Food is still the sector that the amusement entertainment industry needs to improve on.  Having the Amusement Expo overlap with the Pizza Expo was a great idea. It was evident from those food franchise owners who walked over to the Amusement Expo that they are interested in adding our games and attractions to their businesses, but they are not permitted by their franchisor.  The franchise industry needs to recognize that games and FECs can be an asset to their businesses.  This is very logical to us, so it is evident that we need to take the lead and educate that industry.  Subway has already become a leader in working with the amusement industry. These food franchises spend a lot of money on advertising their brands.  Now, all we need to do is come up with a food-FEC business model that works for both sectors.  Discounting has to be a major part of this model, as our industry is the best at offering birthday party and group discount packages.  Including quality food, a name brand, and great value would provide FECs with a competitive advantage.

The restaurant industry is also concerned about higher gas prices.  In the last quarter, casual dining was up but they also need an additional draw to get people out of their homes.  A few of the smaller chains have already embraced the FEC industry and added games and FEC attractions to their business model.  As an example, Ultimate California Pizza, a chain of 17 pizza restaurants in and around Myrtle Beach, N.C., has added a full FEC component to one of their pizza restaurants that has proven over the past year to be very successful. They have added 50 games, mini-bowling, Lazer Frenzy, birthday party rooms, a full bar, and a takeout/delivery pizza service (on a revenue-share basis with Alpha-Omega Amusements.)

Fast food is also taking a look at our industry because soda has become the number one new target, as the anti sugar/calories groups go after this sector. Low calorie meals are now in fashion once again.  For example, Olive Garden/ Red Lobster’s owner came out with “Season 52” (upscale with piano bar) where every item is less than 500 calories.  California Pizza Kitchen now puts the number of calories on every menu item.  “Gluten free” is now even being offered at baseball games.

Getting back to the amusement entertainment industry, FEC owners and other industry sector owners (bowling, skating, laser tag and waterpark,) should be asking questions such as, “Would I eat at my facility?”  “Would I take my family to eat at my facility?” If the answer to either is “no,” take a look at how well Disney is at food. They offer good food with good service even though they have a captive market. They strive to excel at every aspect of offering a positive guest experience.

Overall, what we have learned from the first quarter is that food, in combination with redemption and merchandise dispensing games, makes a powerful combination.  All sectors of the out-of-home leisure industry can take advantage of this. Regional amusement parks are already leading the way and there is much we can learn from the park industry in this area.  Zoos, aquariums and children’s museums are also slowly moving in this direction.  Another question our industry should be asking is, “What industry is going to be more aggressive in pursuing the other?”  History shows that our industry rarely takes the lead when it comes to looking for new markets. Perhaps now is the time for our industry to get aggressive and take action to self-promote itself? -

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Commercial carpet, printed and decorative patterns, loop and cut-pile construction. Wall coverings in fluorescents, Class A fire rated. Colored turf, both traditional and neon colors.

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Quality coin counters and sorters.

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Lighting supplies.

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Family Fun Corp.

Waterpark walls for rivers, bumper boat and splash down pools.

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Manufacturer of unattended entry systems and change machines.

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Ticket dispensers.

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Ride Development Corp.

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Flagship Carpet

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Boxerjocks robotic boxing amusement ride game attraction.

Cost of Wisconson

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American Changer

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Amusement Entertainment Management (AEM)

Premier entertainment consultants.

Gould Manufacturing, Ltd.

Concession trailers and Antique, Jeep and Grand Prix auto rides.

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Manufacturer of waterslides

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Entertainment bowling center developer and manufacturer of bowling equipment and entertainment products.

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Namco America is a premier manufacturer of coin-op arcade attractions, ranging from the hottest titles like Crazy Typhoon and Jumpin’ Jackpot to classic game-room experiences such as the Pac-Man 25th Anniversary upright that features Pac-Man, Ms. Pac-Man and Galaga. Specialized pieces such as Wonka Sweetland and Flamin Finger are favorites too! For arcade gaming fun, Namco America is your answer.

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Provides innovative IT products and services with a primary focus on card-based solutions and database applications for the leisure and retail industries.

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Frozen food vending machines

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Extreme Engineering

Industry leader in zip lines, climbing walls, jumper systems and adventure products.

Broaster Co., The

Food programs and food service equipment.

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