The Profitability Picture – Drivers for Visitation and Spending

February 16, 2012 No Comments

Even though the economy has everyone tightening their belts, people still want to have fun. Go-kart and mini-golf centers have risen to the challenge, and have come up with creative ways to “drive” people to their centers and keep their businesses running in spite of it all. Here’s a picture of what’s happening at a few centers around the country.

High-powered Fun

Bad weather doesn’t matter at Grand Prix New York Racing in Mount Kisco, N.Y. Come rain or shine, the indoor go-kart racing facility is a destination for all ages within a 45-mile radius that includes New York City. Catering to families, companies that want team-building activities and party planners, Grand Prix Racing aims to please everyone who walks through the door.
There are go-kart tracks for adults, and ones for kids older than 8. If guests don’t want to race, they can play billiards, bowl, visit the arcade, jump around at the Bouncy Village or dine in Fuel, its hip restaurant with upscale comfort food.
The 120,000-square-foot center has an annual visitation of 250,000. Business has been flat, though. Nat Mundy, the company’s vice president, said, “[We] don’t owe any money, so when the recession hit we didn’t have crazy expenses.”
Coupled with not having any debt, Mundy said, the strategy has been to spend modestly. For Grand Prix New York, “spending modestly” means it added a new bowling center and a larger arcade.
“We are a cheap alternative to a vacation,” he said. And when people do come through the door, Mundy relies on his staff to positively affect the bottom line. “If my staff does a good job on execution, people linger longer.”

The Location Factor

Even in a tourist destination like Gatlinburg, Tenn., attractions like Fort Fun have had to be creative since the recession. “We used to see the whole family playing mini golf,” said William Cohen, the attraction’s assistant general manager, “And over the past few seasons, it has been just the kids or maybe the kids with mom or dad playing. On the bright side we finished out the season very strong, and are looking forward to a great 2012.”
Fort Fun is an indoor and outdoor complex with 10 different activities, located on four acres in downtown Gatlinburg, at the base of Great Smoky Mountains National Park. It’s in the heart of all the action, and last year it brought in approximately 75,000 guests. Its mini-golf courses have views of the Great Smoky Mountains.
“We serve everyone from families on vacation, day visitors to Gatlinburg, family reunions, local school and church groups, along with lots of convention and youth group bookings,” Cohen said.
Being right there at the most visited national park in the United States, Fort Fun can count on a steady stream of traffic. But with everyone’s wallets tightening, it means there’s more competition for those tourist dollars in Gatlinburg. And Fort Fun aims to get on visitors’ dance cards before they arrive.
“We have been utilizing the internet with our website [to advertise promotions] and other [online] listings and links such as Chambers of Commerce, attractions associations and the State of Tennessee tourism site, which gives us lots of exposure,” he said. “We also take advantage of social media outlets, such as Facebook and Trip Advisor.”
Fort Fun markets to new and returning visitors. It offers packages for one-day visitors and other deals that can be spread out over the course of guests’ visits, such as unlimited mini-golf or do-it-all passes. “We pride ourselves on providing lots of great family value for your money,” Cohen said.
Fort Fun has a steady schedule of physical improvements and upgrades to remain fresh for those new and returning guests. For example, it just added horticultural nameplates to all the native plants, shrubs and trees to its mini-golf courses, so guests can take a horticultural tour. And this spring, it will have a new façade.

The Price Is Right

A few years ago, the People’s Choice Family Fun Center in Waukegan, Ill., just brought in visitors from the community. Today, people have been driving at least 45 minutes to enjoy its indoor glow-in-the-dark mini-golf course and arcade with 150 games. The attraction is even drawing people from southern Wisconsin.
John Sarantakis, owner and president, said the 43,000-square-foot center used to advertise outside of the community, but it wasn’t effective. Today, people are looking for a bargain, and word-of-mouth and low-cost advertising online and through Groupon have seen a steady increase in visitation, though he doesn’t officially track the numbers.
“We’re working off a lot of volume, and we’re selling more.” he said. The facility that’s “down the street” from Six Flags Great America has kept its pre-recession pricing. “We’re making more money, but less profit. We know people are hurting. People are coming in and not spending as much. But they know they can feed a family of four for $20 and play a game, which is better value than McDonald’s.”
It’s a savvy strategy to stay top-of-mind with families through thick and thin. Using the recession to its advantage, Sarantakis has consciously not raised prices even though operating expenses, from food costs to labor costs, have risen. “When times get better, we’ll be here, and business will skyrocket,” he said.
Keeping the center in the black means the People’s Choice Family Fun Center has put off renovations, such as replacing the carpet, for a couple years. Sarantakis kept improvements to a minimum, focusing only on repainting and putting in energy-efficient lighting. This spring, however, the carpeting and bathrooms will be redone, and bumper cars will be added.
“We’ll do this without raising prices,” he noted. “I believe in my loss leaders. Eventually, they all turn into profit centers.”  -

 


Words of Advice for Opening a New Center

Be prepared to work 70-plus hours a week and not make money for a while.
- Grand Prix New York Racing

Location, location, location! Keep up with the newest trends in the industry. Assemble a team who is very proactive in the success and growth of your business.
- Fort Fun

Diversify. Have food, games and a place to host parties. Have loss leaders that bring people in, and eventually those loss leaders could become profit centers.
- The People’s Choice Family Fun Center

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