By Scott Borowsky and Frank Seninsky 

Industry Overview: The First Quarter of 2019

After a fantastic 2018 and good Christmas/New Year Peak Weeks, the First Quarter 2019 numbers are good, but we all can feel the slight slowdown. Now, do not get depressed. A slight slowdown after a great year is still very optimistic. Our top game factories still cannot keep up with orders so our industry is still upgrading as well as expanding. Giant mall operator Simon Brothers locations are currently 95 percent leased. Note that they reacted quickly and have changed their tenant mix, depending less on retail but more on experience and entertainment, including outdoor festivals. Interest rates have seen three increases and are predicted to remain the same or be slightly increased in 2019. Buzz Boyz overview: 2019 will be a pretty good year, barring that downturn that is coming, but of course, we do not know when.

Class number 48 of Foundations Entertainment University. There were 92 attendees at the class, which was held March 24-25, 2019, during Amusement Expo International in Las Vegas, Nev.

On the flip side, our customers as well as some of ‘We’ have a lot of debt to contend with. Default rates on keys types of consumer loans are increasing. Here’s what we need to be aware of when it comes to our customers:

• Consumer debt is now more than $4 trillion and includes car loans, student loans, personal loans and credit card debt.  It does not include mortgages. Average credit card debt is $5,736. Total household debt in the U.S. is $13.54 trillion (Fourth Quarter 2018.) 

• There are $1.14 trillion in car loans in the U.S. Twenty percent are currently in default or delinquent (leases are not included but they are just as bad) and that default rate is expected to double to 40 percent by 2020. This is really bad news because it is the car companies acting as banks that are making a substantial amount of these loans in order to sell more cars. The defaults are entwined in the financials of the automobile companies. One other thing to be aware of:  Americans are back to buying expensive SUVs and trucks. These vehicles cost on average 50 percent more than small sedans/small trucks and cost 35 percent more to operate.

• There are $1.5 trillion in college loans; 20 percent are currently in default or are delinquent and that default rate is also expected to double to 40 percent by 2020. The average college graduate owes $42,000. The U.S. government has made a significant amount of these loans and they expect to be paid back (at least they do now but that could change, and it would be the taxpayers that ‘eat’ the defaults.)

Scott Borowsky Attended F2FEC 

F2FEC (See related articles in this edition starting on page 30) was held March 5-7 in Colorado Springs, Colo. Scott Borowsky has take-a-ways from two of the speakers:

Paul Saginaw, chief spiritual officer, Zingerman’s, Ann Harbor, Mich.  

• Economy is so strong it is tough to hire people.  “We need them more than they need us.” Solution:  Every new person spends two hours with him or his partner. ‘We are looking for an empowering type of person who has the natural ability to make people happy. Our employee turnover ratio is lower than that of typical FECs.” 

Professor Dr. Melissa Hughes, Andrick Group:

• The Brain – Smiling and happiness translates directly into better customer service.  Converse – A lot of people are not happy and that translates into poor customer service.  

  Conclusion – Hire happy people. If you are the owner, make an effort to smile more. Sometimes it can be better than speaking.