By Scott Borowsky and Frank Seninsky
Two words describe the week of March 12-16, 2017, that the movers and shakers of our industry spent at Amusement Expo Dallas: Optimism Reigns. A thousand plus attendees came ready to buy and share their positive outlook for our industry, which by the way, is currently ranked number in growth among all industries in the United States. Business owners can breathe in the new optimism in the air, and yes, part of the reason can be attributed to President Trump and his initiating policies for easing business regulations. In addition, credit is a bit easier to obtain for small business owners and big box commercial space at reasonable lease rates is currently available for family entertainment center use.
February’s 2017 F2FEC conference was also an excellent experience for everyone involved. Held at Chateau Elan winery resort outside Atlanta, it was an exceptional show where attendees were spending money. More than 200 industry players attended the conference, which had a theme of “Differentiate.” According to a story by Robert Sax covering the conference in this issue’s F2FEC section, the organizers, known as the Three Amigos, Rick Iceberg of C.J. Barrymore’s, Ben Jones of Live Oak Bank and George Smith of Family Entertainment Group, encouraged participants to challenge each other, share money-making ideas and build valuable connections. Over three nights and two days attendees examined how differentiation can improve every facet of FEC operation from customer service to marketing to employee retention to assembling the right entertainment mix, Sax wrote.
‘The first day of the AE Trade Show was the best day I have had in 20 years at an industry trade show’ – Frank. That includes having fun, networking, gaining new business, seeing all of the new games, new attractions, and new technologies. Having the Expo in Dallas rather than Las Vegas may have left out about 200 familiar faces from California, Oregon and Nevada, but there were plenty of ‘new faces’ from Texas and surrounding states. Foundations University attracted 35 attendees from 14 states and Canada.
FEC Expansion is on Steroids
The FEC concept continues to broaden all categories of the leisure out-of-home umbrella, including single attraction facilities. The phrase ‘Time is Money’ now takes on a different meaning. The premise is that guests will spend more time, stay later after birthday parties and group events, and come back more often. The data shows that revenues from food, games, and original attraction(s) increase. Unique examples:
A 10-screen movie theater took out one screen and put in a trampoline park. Another theater complex installed a soft play and slides into one of the screen spaces so the small kids can play while the parents watch the movie.
Trampoline parks are adding redemption games, snack bars, and FEC attractions.
Bowling – It is now ‘cool’ to have waiting lines to bowl. Guests extend their length of stay and per capita spending. Removing lanes (6,8,10,12) and using that space to create a mini-FEC, could increase revenues by as much as $1 million.
Children’s museums, zoos, and aquariums are becoming family entertainment centers by showing movies and going into the catering business.
Education Day Tuesday
This enlarging of our industry was really being emphasized at the seminars that took place on Education Day Tuesday. Approximately 400 spent the entire day attending the 11 AMOA/AAMA seminars and another 100 attending the Laser Tag Convention’s 15 seminars.
Frank’s Favorite Seminar – Tony Leone’s Keynote Presentation & Part II – ‘Sell More, More Often, for More Money, With Less Effort’. ‘This was the best presentation I have yet heard on how to use both your left brain and right brain to effectively grow your business.’ Here are some of the takeaways from Tony:
‘When you lose a deal, it is always a right brain issue’.
First impressions are formed in the first 150 milliseconds.
‘People remember how you made them feel, not the left brain ‘stuff’ you told them about you and your company.’
‘The Golden Rule (Bible) is a lie!’
‘Can I trust this person?’ – What people are really thinking when they first meet you.
‘Do not transfer your nervous energy to a potential customer’. Look them in only one eye, not switching from one eye to the other. If their pupils dilate, it means they are showing interest.
Contract: First page covers ‘What we can do for you.” The second page covers ‘What we do to you.’
First Quarter 2017 and Trends
Economic growth is trending. For the fourth quarter 2016, the US economy grew at a rate of 2.0 percent. For the first quarter 2017, the growth was 2.2 percent. This is a better barometer than tracking stocks going up and down. Economic growth during the Obama eight years averaged 1.75 percent. At this time one year ago the growth rate was 1.2 percent. Many companies in our industry, including FECs, street operators, and manufacturers and suppliers had a good first quarter 2017. As an example, AEM had its best first quarter since 1994 (20 years). More games operators are taking an interest in redemption, the category that is generating 70 percent of the games revenues in a typical FEC. Debit card systems and other payment technologies are gaining traction in the games sector. This is a good lead in to the next topic.
Trend of Eliminating Cash. How Soon Will the United States Become a Cashless Society?
All we can say at this time is – Cashless is coming. Most game operators and basically most FEC owners and even games manufacturers are rear guard. The silent majority take little action while others get satisfaction in fighting something they really can’t stop. Our customers are going in a cashless direction. Young 20s, 30s and even 40s carry little cash, if any. Our customers don’t like extra steps (time and fees to use an ATM or even a credit card kiosk or token changer). Rumor. Just last week we heard that our several legislators in our government are considering eliminating the $100, $50 and maybe even $20 bills. We already know that the banking industry is for cashless. We learned that banks do not want to handle coins and bills (Operation Choke Point) and it may not be long until we have to pay banks to ‘hold’ out digital money. This is known as negative interest. On the other hand, there are strong lobbies and some good economic reasons not to eliminate cash entirely.
And Last But Not Least
Ohio is close to passing a state amusement game regulation that everyone in our industry should be aware of. Having a state gaming authority regulate amusement games is like having the IRS go into the matchmaking and dating service. The current regulations make it very difficult to be a games vendor (huge application and license fees and a no appeal situation that is un-American.) The sad ramification is that 48 other states are sitting on the sidelines waiting to see what happens in Ohio (New Jersey already has a well defined law and has recently made the Dave & Buster’s change). Us Buzz Boyz highly recommend everyone in our industry taking a good look at what is going on in Ohio and hopefully some of you may get involved.