Posted onMay 29, 2025|Comments Off on I LOVE THE MOVIES!!!
The smell of buttered popcorn, the cool sensation of frosty Pepsi in my mouth, and an afternoon of escape into a new and exciting world, this is what the movies meant to me. As a kid, I spent endless hours on these magical, plush red seats.
For years, cinemas were our first and most affordable choice for entertainment. Movies were the anchor for some of the best retail in the United States, aping the days when we went downtown for all our entertainment, be it a shopping trip, a movie, a delicious dinner at our favorite restaurant or maybe even a play. While many of us are not old enough to remember those days, they are certainly the model for modern entertainment districts.
Not surprisingly, the Pandemic, streaming, and other technology that allows entertainment and games in the palm of our hands have significantly affected the cinema industry. The North American Box Office Gross (NABOG) in 2023 and 2024 was between $8.5-$9.0 Billion, a drop from the Pre-Pandemic era of $11-$12 billion or approximately 70%. But even before the pandemic, NABOG was not growing, but hovering, as shown below:
Source: BoxOfficeMojo.com by IMDbPro and JB Research Company
In the last 40 years, 1984-2024, compound annual growth rate of cinema revenue has been 2.8%, while the population of the U. S. has increased only 1.0% on the same basis. As a reference, the North American Amusement and Theme Park gross revenue increased at a rate of 5.0% per annum in the past 26 years. Remember, inflation has been 2.6% in the past 26 years, so the real rate of growth is 2.4% for Amusement and Theme Parks. Adjusted for inflation (2.6% for the past 40 yrs.), cinemas revenue has been fairly stagnant in the period. This is a somewhat disappointing point of view.
What are a few of the reasons for stagnation, even prior to the Pandemic:
Technology, including television even before streaming became available to all.
Shifts in consumer behavior and preferences
Shifting Demographics, including the aging of the U. S. population
The availability of quality film product and again, preferences of the moving going public
Over screening
With all of this disappointing news, there are some bright spots on the horizon. First, theaters are seeking to change the business model. While almost half of cinema revenue still comes from ticket sales, other revenue streams are growing. Some new points of differentiation include:
The availability of premium large format screens
Enhanced seating
Enhanced Food and Beverage, including the highly profitable sale of alcoholic beverages
Adoption of theaters as public assembly facilities offering opportunities for live events, gaming, sports, opera, kids movies and other programming.
I grew up going to the movies as a special treat. In my heart, I hope that theaters can evolve with the times and remain as sparkling, special places where one can lose oneself in a special environment for a few hours. Lord knows we need these safe escapes in our very chaotic world!
Posted onJanuary 27, 2025|Comments Off on Exploring Boomer Spending Trends: Insights for Marketers
Unlocking the Spending Power of Boomers
Americans are a diverse group, and their spending reflects it beautifully. Look at the picture above and the chart below and you will discover that Boomers spend the lowest of overall per capita, but they rival Millennials in their entertainment spending. Yet when you casually observe advertising in any format, digital or print, you rarely see a senior enjoying themselves on an adventure tour, or on an expensive trip to a theme park. Doesn’t make sense!
The percentage of global population by demographic cohort and estimated spending shows a similar situation:
Generation
Share of population (2024)
Global spending (2024)
Gen Alpha
19.5%
10.6%
Gen Z
24.6%
17.1%
Millennials
22.9%
22.5%
Gen X
18.3%
23.5%
Baby Boomers
12.1%
20.8%
Greatest and Silent Generation
2.6%
5.5%
Understanding these percentages assists in understanding the social and economic impacts that each generation has on our industry.
When comparing the population percentages with spending percentages, the following observations can be made:
Baby Boomers: Although they make up 12.1% of the population, their spending represents 20.8%, highlighting their substantial economic influence.
Millennials: Represent 22.5% of the population and their spending is almost the same.
Gen X: Consist of 18.3% of the population but account for 23.5% of spending. This generation shows a higher spending power relative to their population size.
These comparisons reveal that while some generations may have a smaller population size, their economic impact through spending can be disproportionately large, reflecting their purchasing power and consumption patterns.
Boomers, despite being the lowest in overall per capita spending, rival Millennials in entertainment expenditures. They enjoy expensive vacations, gifts for family, and trips abroad, highlighting their substantial economic influence in the entertainment sector.
How often do you see an ad for anyone over 65 doing anything but taking drugs? But they have money and spend money on expensive vacations, gifts for their family, and trips abroad.
If you are concerned about your return on investment and you are in the entertainment field, why aren’t you pitching to this group? Just common sense, don’t you agree?
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Posted onJanuary 12, 2025|Comments Off on Reviving Community – New Trends in Location Based Entertainment
Now more than ever, we need places for people to congregate and connect. With every lifestyle, regional, and community center showing big empty spaces from tenants that have gone dark (due to Covid-related loss) or just bad management and strategy, innovation is the key to rebranding and renewed Covid has been catastrophic for business with major shutdowns and the explosion of e-commerce.
But some things can’t be replaced, and I believe will never be replaced, such as the need for connection and communal gathering places. The isolation and emancipation screens bring for young and old elicits a more urgent need for human contact. As good designers, developers and owners, we can provide interesting, exciting and innovative experiences, and we can bring visitors back to our shopping centers.
The genres of new concepts are as old as the shopping centers themselves and as new as technology will allow. Here are some of the notable Location Based Entertainment (LBE’s) we think are reinventing the genres.
Eataly
Eataly is the delicious Italian gourmet food market/food court on steroids, with 10 locationsin the United States, including New York and Los Angeles.
Eataly is a global operator in Italian food, offering a concept combining high-end Italian food restaurant with retail.
Eataly’s business model was built around the “eat-shop-learn” concept, offering consumers globally a selection of high-quality Italian restaurants and retail experiences with an overwhelming variety of the finest Italian local “specialties” often impossible to buy abroad.
Eataly operates 27 directly operated flagship stores (14 in Italy, 10 in North America and 3 in Europe) and 26 franchised stores located in the Asia Pacific countries and Middle Eastern region, generating revenues of over €800 million globally (including franchise store sales). This indicates average store sales of £15 million per location.
Eatertainment and Sports
I hate the word Eatertainment, but it has become common in our lexicon. The concept involves combining eating and drinking with fun, sports and games. Anything from baseball to golf to bowling to curling (yes, curling!) are tapped to be themes for these venues, which fit nicely into a retail or mixed-use project.
The first class includes many new restaurants which offer simulators for popular sports such as golf and Formula 1 car racing. Top Golf is the most popular sports themed venue with the highest number of units and top grossing sales per unit of the new sports/food/beverage concepts. This concept combines golf simulators and games with food and beverage. The company offers more than 100 plus units with total sales of almost $1.8 billion, average sales per unit of $17-$18 million on newer units sized at approximately 65,000 square feet. Gross margins are known to be about 40%, indicating an EBDITA of $6.8 million. With an industry standard payback of four years, this indicates a warranted investment of more than $27 million, or $415 per square foot. This is the most proven and mature business model of the sports/food & beverage models.
Other models include:
F1 Arcade is based on iconic Formula One racetracks and is offered in Boston, Washington DC, Las Vegas and London. Featuring craft cocktails and seafood, Kobe beef, and bar fare with an upscale theme, the venue allows entrance to customers from 7 years of age and older. The Boston unit is approximately 16,000 square feet. Kindred Concepts, the parent company, recently raised $130 million in financing for expansion.
Camp Pickle is scheduled to debut in Denver and Tulsa in 2025. This new attraction will be like an old-time summer camp, the kind your grandparents attended. Of course, Pickle Ball is the theme, and food beverage and other activities are offered.
Spin is a concept created by Susan Sarandon in New York in 2009, themed on competitive ping pong. With locations in New York, Boston, Chicago, San Francisco, Toronto, Philadelphia, Seattle and Washington DC, the menu provides farm to table, locally sourced food. Units range in size from 4,000-12,000 square feet, fitting nicely into a shopping center configuration.
SixesSocial Cricket offers competition in a sport that many Americans know nothing about… Cricket, with karaoke offered as backup! The food is said to be excellent, featuring typical bar-fare. Bookings include an adjoining table for food and beverage. The first U.S. unit is in Dallas at the Colony.
Goodsurf is an 8,000 square foot sports restaurant based on surf simulator technology that allows waves to be created by machines, taking much less space than a typical wave pool. Food offerings include burgers, fries, vegetarian options, and ice cream for the kids. The first location is in Dallas.
Flight Club is a high-tech dart simulation game with seven units located in the United States in Las Vegas, Denver, Atlanta, New York, Los Angeles, Houston, Boston, and Chicago. The food offerings are gourmet versions of flat breads, tacos, salads and fries. The newest unit is in Denver at 10,000 square feet, close to Coors Field and the Ball Arena.
Culture
My favorite in this category is Meow Wolf, which began in 2008 as a collective of anarchic artists in Santa Fe (NM). It offers interactive installations, each with a different theme. The attraction offers six locations including Santa Fe, Las Vegas, Houston, Washington, and Denver. Each location has a different immersive art theme with hundreds of storytellers from throughout the world and local artists’ features.
The newest and largest store is located in Denver and features more than 70 immersive attractions in 90,000 square feet. (The Houston location is only 32,000 square feet.) Convergence Station, as it is called, is a multiversal travel experience between four alien worlds, inspired by the location near two freeway overpasses.
The newest store is scheduled to open in 2026 and is in final lease negotiations that will bring a Meow Wolf exhibition to West Los Angeles. The location is a vacant movie theater complex. The theme will be cinema. Meow Wolf’s move into its largest market yet is intended as a statement piece, a declaration that weirdness and art-focused ventures still have a place in an immersive economy that’s been racked by closures and layoffs, Meow Wolf included.
In April, Meow Wolf announced it would cut 165 employees. Exhibitions in Denver and Las Vegas were heavily affected.
General admission is $40 for adults and $35 for children and passes are available. The business model is based on buying/leasing low value properties in subsidy rich locales.
Destruction LBE’s
Can we talk about Las Vegas, the lab for all new location-based entertainment? How about Dig This, with an admission price of almost $205? This is a wrecking lot with real earth-moving machines, caterpillar D5Ks, bulldozers, and mini excavators. With instructions being the first step, a neon yellow vest and a hard hat are provided with in-cab training. Then, you get turned loose to wreck real things like a car! This is about the most male-oriented attraction of those researched!
Adventure and Technology Driven Formats
Location based virtual reality is a whole world unto itself with a following that includes mostly young boys and men. But the industry is making a Location Based-Social interaction with games to engage the consumer in a community experience. Some of the themes include war, exploration, and adventure. Research shows that female consumers are loving some of these group games, those that don’t require you to keep a body count!
(Now maybe I’m old-fashioned, but explain this to me. A whole bunch of your friends put things over their eyes where they can’t see each other nor speak to each other, nor touch each other. These are group games that seem to me to be a totally weird way to connect. Just this consultant’s opinion, but I think we have lost our way in terms of entertainment value and the sense of connection that is required to be human!)
Still, one concept is killing it!
Sandbox VR is a location-based concept out of the UK and Ireland, with two locations in the UK (one in London, one in Birmingham), and 31in the United States. Of these, seven are in California, one in Chandler (AZ) and another in Mall of America (MN). The average spend is £37 in the UK and $55 in the United States. The UK locations earn between $1.9-$2.6 million, with an EBITDA of 35%. Capital expenditure on the equipment ranges from $500,000-$750,000. Buildout of the average 5,000-6,000 sqft location ranges from $1.5-$3.0 million, cost of which is borne by the lease and/or can be negotiated with the landlord. The games are story driven and can change constantly. Collaborations with Netflix and Paramount are planned to provide content.
At the writing of this blog, Sandbox VR launched a game based on Netflix’s Zack Snyder’s “Rebel Moon.” This experience has players “gear up with their fellow rebels for battle against the ruthless forces of the Motherworld’s military,” per the game’s description. “Inspired by the vision of legendary director Zack Snyder, players become members of the resistance and are transported to the planet of Daggus, descending through skyscrapers, streets, and a subterranean mine while they defeat enemy soldiers and spacecraft.”
With the development of operating economics reported, this is one of the first VR experiences to complete a “proof of concept” and earn economic industry-standard return.
Intellectual Properties
My favorite location-based entertainment center based on an IP is the Crayola Experience. This format is based on (what else) the iconic Crayola Brand, with the flagship attraction in Easton (PA), where the factory and headquarters are located. At 65,000 square feet, and with lots of colorful activities to do, the attraction boasts an adult/child entry fee of $26.99. Other locations include Chandler (AZ), Bloomington (MN), Orlando (FL), and Plano (TX). Activities offered are very creative such as the Activities Studio, The Cartoon Creator, and the Adventure Lab.
In 2022, the brand began a licensing concept. The growth strategy presented in 2022 includes extending the location-based entertainment footprint domestically and internationally. “We are now looking to develop licensing partnerships that bring new capital and expertise to accelerate our LBE expansion, particularly internationally where local market access and expertise are important,” said Victoria Lozano, Executive Vice President Digital Strategy, GM Attractions & Retail for Crayola.
The first Crayola Experience opened 25 years ago as The Crayola Factory in Easton (PA). Crayola saw an opportunity in LBE and in 2013 reimagined the downtown attraction as Crayola Experience. The company also owns and operates Crayola Experiences in Orlando (FL), at the Mall of America in Bloomington (MN), in Plano (TX), and in Chandler (AZ). With venues ranging from 20,000-60,000 square feet, Crayola Experience engages more than 1.5 million kids and adults annually in activities inspired by/and incorporating proprietary Crayola products and technologies.
Crayola is continuing to develop creative concepts that will help scale its events and exhibitions LBE business. Early this year, Crayola debuted IdeaWorks at Philadelphia’s Franklin Institute, a traveling exhibition encouraging families to explore innovation, invention and design thinking. The company also collaborated with OceanX, a global ocean exploration nonprofit, on a national takeover tour of the Crayola Experience venues that began this summer and runs through summer 2022.
Other notable concepts of IP-based LBE’s include the LEGO Discovery Centers, branded popup retail locations with characters such as Barbie and Peppa Pig. Today, studios and other IP owners are monetizing their brands by creating places where their properties can be owned or licensed out to the LBE owner. One great example is MONOPOLY LIFESIZED, created by Habro (self-explanatory), and Sony has opened a division to license its intellectual properties for developers.
Other retail pop-ups with a brand LBE include Hello Kitty pop-up cafes, the Rolling Stones pop-ups, and the Barbie branded sales areas at Selfridges in London.
Conclusion
Most of the examples presented must continue proof of concept and financial goals. We hope many will stand the test of time and blossom to enrich our industry!
What are your favorites? Let us know, we always love your input and experiences!
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Posted onDecember 11, 2021|Comments Off on Retail Trends for 2022 and Beyond
As the Christmas shopping season continues and New Year’s is not far behind, our thoughts turn to the what’s next. What is the future of retail? The question is still on everyone’s mind and no one has answered it adequately. That’s because we are not fortunetellers, but we try very hard to predict the future, in spite of our shortcomings.
This week I listened to a podcast from Dana Telsey, a retail expert I greatly admire. She always says things that I think, “Gee, I wish I had said that, and so eloquently.” She talked about the three Ps in understanding and predicting change in the retail marketplace:
Process
Purpose
Profit
I keep thinking about these words and continue to develop insights that are essential for an understanding of the future of retail. Try it. Just think about the words and the application to your particular product, location, experience or store. You will find you are a brilliant prognosticator!
Just for fun, I came up with my own “10 Trends for Retail” that are practical and may help you plan. They are as follows:
Consolidations, bankruptcies and other market adjustments will continue until retail product, market supply and demand are equalized. They are good for the industry as a whole, however painful they may be for affected entities. The U.S. had too much unproductive space before the pandemic.
E-commerce and omni-channel selling of goods and services will continue. These formats work hand in hand with stores. They supply avenues to sell more goods! In this realm, the consumer is king. They have spoken loudly about their preference for convenience and choice. Things like BOPIS, curbside pickup, warehousing and other trends will continue because they are popular and help sell.
Retail THEATER and EXPERENTIAL RETAIL will drive successful locations. It is time we stopped being lazy about our shopping experiences.
Great locations will continue to thrive. A-mall location will evolve into even more mixed-use destinations.
The opportunity for development and deepening of our outdoor/lifestyle formats has never been stronger. We must recognize and acknowledge the essential change in post-pandemic behavior. Consumers require more space indoors and have a preference for being outdoors if possible.
Discounters and “Dollar” stores provide the biggest growth opportunity currently. This is not permanent. These types of retailers always thrive in a recession. (Yes, we are in a recession!)
Cause and purpose are missions to always keep in mind in retail. Millennials prefer products that offer some good to the world.
“Value” is another concept to understand and build into your mission. It does not mean cheap; it means giving the consumer something she treasurers as she shops.
Exurban and suburban locations supply the best opportunities for growth. Keep this in mind as you develop and expand.
Shifting demographics and the concomitant shifts in Process, Purpose and Profit will drive retail development.
Keep these prognostications in mind as you move along with your day, today and tomorrow. Here’s hoping they will help you bring joy and success to you!
These days, my blog just seems to write itself. Experiences and new ways of accomplishing almost everything, from washing clothes to shopping, are the norm. But as humans, it takes an exceptionally long time to change our ways so that all our new activities feel stiff and unfamiliar. Take for example, shopping, my passion! Here in Napa County, we are in Phase Two A of the process. That means many retail locations can reopen, except ones that involve person-to-person contact like salons, nail parlors, gyms, and spas.
About a week ago, my husband and I went to the University of California San Francisco hospital, where he had a follow-up appointment for a recent health scare. Since no one is allowed in the hospital other than the patient, I had to occupy myself with walking around nearby.
UCSF is in Mission Bay, as is the beautiful new Chase Center Warriors and concert arena. This venue opened in September 2019 at a cost of half a billion dollars. Besides the 18,000-seat arena, the project boasts 580,000 square feet of office space and 100,000 square feet of restaurant and retail space. Additionally, a new light rail system connecting the arena to downtown is also proposed, at a cost of $1.0 billion. The MANICA designed arena opened with a Metallica concert playing to a sold-out crowd.
Huge investment full of vision and promise. A community gathering space that would be alive at least 250 nights each year. The one and only first-class arena for concerts in San Francisco. A new space for artists to add to their tour routes! We attended the Sara Bareilles concert in January and though the house was set in the concert-configuration at 10,000-capacity, it seemed like we were onstage with her.
Here is what it looks like now:
Eerie. A boarded-up ghost town cordoned off to all seeking to visit. The many restaurants were either not yet operational when the Pandemic began or closed now because of it. A special favorite of Northern Californians is Gotts, a local hamburger and milk shake joint that now offers sushi and other fancy stuff. I almost cried when I saw this:
How could this happen? Who could have predicted this devastating blow to a brand-new entertainment venue in one of the best entertainment regions in the world?
And just like that, everything changed again! Last week, stores were allowed to open in Napa County, where I live. I was thrilled. It was advertised that the Napa Premium Outlets were not yet open, but that the Vacaville Premium Outlets were (both Simon Properties). I drove the 35 minutes to the Outlets and was greeted by a very spotty opening sequence. Most stores were still closed, and signs disclosed they would be open next week or the week after. The few stores that were open look like this:
One or two customers in each shop. The stock was plentiful because it has been sitting in a warehouse for two or three months, awaiting opening of the stores . I felt particularly sorry for a new William Sonoma Factory store that just opened for the first time, with no customers in its beautiful store:
I have PTSD from trying to keep up with the world. It’s like when you have your first baby, or worse yet, your second baby, and just when you think you have it nailed, their behavior changes, they start sleeping less or more; they don’t like the food today that they loved yesterday; they cry endlessly for no reason, and you want to run away. But of course, you don’t, except for maybe a minute or two when you lock yourself in the bathroom and sob for, which is all the time you are allowed to yourself as a new parent. That is what I feel like today. I want certainty; I want routine; I want to get on a plane and go on my summer vacation; I want to see my grandbabies; I want to kiss my kids! I will just keep muddling along, as I imagine we all will. And I will keep writing blogs that someday may seem like the poetry you wrote when you were a stoned college kid.
What are you doing to stay sane? Share with us your tips for slogging through your days.
Posted onMay 11, 2020|Comments Off on Musings From a Bored Feasibility Consultant
My practice lives and dies with innovation and optimism. With most clients and friends scared to death about what this crisis will bring when it is over, or whether it will ever be over, my normally optimistic client base is taking a nap. They are shut down and not practicing good old American ingenuity.
I have lived through many downturns and booms, a litany of business cycles. My space in the entertainment development world falls between the idea and execution. Is this idea crazy? Does it have legs? Can I afford to develop it? Where will I get development funds? Am I nuts to be thinking this right now? These are some of the questions my practice is hired to consider.
In all cases, I provide one of the following answers:
Brilliant idea. Let’s do some preliminary testing.
Hmmmm, I think that’s been done before, but maybe we can improve on the existing model.
I like it, but I really think the idea needs more development on your part, or if you like, we can help you move it along.
That is the dumbest idea I have ever heard. Save your money, don’t hire me, or if you’ve already hired me, you should fire me!
A couple examples of the ill-though-out ideas:
A large INDOOR entertainment center on the beachfront of a major East coast resort. The branding strategy: It’s a beautiful beach day, let’s all head inside!
A 100,000 square foot museum at a major Indian casino in the U.S. with the theme “The slaughter of the tribe by the White man.” (Footnote: The gamblers at the resort are 95% White.)
A major entertainment company’s decision to disallow wine at a park in France.
The decision to build two competing 20,000-seat amphitheaters across the highway from each other in a major Orange Co. California city.
But happily, more of my practice involves ideas that have you smacking your forehead and saying, “Why didn’t I think of that?”! Some examples:
American Girl Place (built and wildly successful),
Academy of Motion Pictures Museum (to open year’s end 2020),
Hollywood and Highland (the initial plan didn’t follow our advice);
Sony Metreon (also, didn’t follow our advice);
A new hospitality/retail/dining/entertainment/ development in Mecca, the Hajj (they didn’t hire us: I wouldn’t have either!);
A mixed-use sports and entertainment-infused $1.0 billion development in downtown Edmonton (The Oilers got 60% of their Phase One development funds from our numbers, the first time ever a sports venue received public funding in the province):
Maybe soon we will have a few new brilliant ideas to report to you. Until that time, stay safe, well, healthy and hopefully, not too bored!
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Ten years ago, in about 2004, I got a call from a prospective client, a newly hired director of the Academy of Motion Pictures Arts and Sciences museum project, asking if I would be interested in conducting some market research for a new attraction/museum themed on the Academy Awards.
Would I Ever!!!
I had been the one lucky enough to do the work for the Dolby Theater at Hollywood & Highland where the ceremony takes place, so it seemed a good fit and logical that I continue on to do the museum feasibility. But my joy, my heart, for Hollywood, no one knew that!
No One Had Ever Known That:
My family had always been in the entertainment business, with my father involved on the business side, having been a pioneer in the cable television industry.
My aunt always working for this or that movie star as an executive assistant.
I was lucky enough to visit the back-lot of 20th Century Fox before it was Century City!
I spent countless hours watching movies being filmed, then sitting in theaters watching them roll by me on the big screen.
Would I be interested? Heck, yea!!
Since that time, I have been the consultant called upon to do the background market research, analysis and financial projections for the site selection, sizing and operation of museum.
I learned a thing or two during those years like:
I gained a deep knowledge of large museums and what keeps them thriving.
How an endowment can shrink during a deflation.
Money earmarked to never-be-touched has a way of disappearing in hard times.
I learned about the conundrum of keeping things fresh so that resident visitors will keep returning, time and again.
I am thankful that my job always changes and that I always learn, no matter the engagement.
Over the years, we have wrestled with all the issues associated with new development including disagreements about what it should look like, what its mission should be, where it should be sited, who is its targeted audience (please, don’t say everyone!), and what’s the best way to keep the project on-time and on-budget. To be clear, these issues are complex and are made more difficult when there are many masters to serve. Still, when the project is to reflect the points of view, hopes, dreams, and legacies of America’s most important cultural export, (which I believe is cinema) there must be the most careful consideration to each one.
This was my best job ever. Write and tell me about yours in the comments below.
Posted onDecember 7, 2009|Comments Off on Introduction – Raison d’Etre
Image by Wouter Pinkhof
Does the world need another blog? According to recent statistics from blog-tracking site Technorati, the blogosphere has doubled every six months for the last three years. That’s 175,000 new blogs per day worldwide. Technorati added its 50 millionth blog on July 31, 2006.
After several painful sessions of browbeating from my son and several friends, I suppose the answer is “if everyone else is doing it, so should you. So get off your butt and do it!” Those of you who know me understand that I never put anything in writing that I wouldn’t want the world to see. Therefore, this is a painful process. But I have been convinced that I have a ton of information in my head that is useful to many of my friends and clients. So without disclosing any particulars, I will present, each week, my thoughts on my topics of expertise, namely figuring out how to concept and test the market/financial feasibility for places which may include:
Retail
Entertainment
Sports
Leisure / Hospitality
Gaming
Culture (Theaters/Museums)
In the last few years, mixed-use projects have included all six of these elements. Figuring out how they interact from a market and financial point of view is what we do and what keeps me engaged. (I bore easily).
For those of you who don’t know me, I have been in the business for over 25 years and as a friend once said to me, “you must be pretty good by now.” Well, I don’t know about that, but I do know a whole lot about the subjects noted above.
Why Even Bother With Area/Consumer Research
When I worked at Federated Department Stores (which at the time had all the best department stores in its portfolio, including Bloomindales), we had two units for research and evaluation. One was dubbed “area research” and included all demographics, competitive research and projected sales. The other “consumer research” did focus groups and intercept interviews of our customers. Our projections turned out + or – 5% because our models were that accurate. I learned a great deal from working there, which I brought into my practice. Namely, that if you think you know the answer, and it is YOUR PROJECT, you are probably wrong. And that you need to get an independent evaluation or you will make a $100 million mistake. Some projects are smaller and some are larger, but you get the picture.
In my next posting, I will talk about area research and how it is done. Subsequent postings will discuss consumer research and some of the interesting stories we have surrounding this type of analysis. Stay tuned……….all of these things are GOOD TO KNOW, and thus the name of my blog!
Posted onDecember 7, 2009|Comments Off on 10 Ways to Avoid Chapter 11 in the Attractions Business
A whole long while ago, I wrote an article with my mentor and favorite octogenarian, Buzz Price, about the many failures of certain themed restaurants and attractions. I looked it over and was very surprised to see that it still has relevance today for development of new attractions, something that will be happening soon enough. Thus, here are 10 pitfalls to avoid when planning an attraction.
When planning, balance revenue generation in major categories: attractions, food service and merchandise.
Spend time computing capacity. Indoor attractions are hard to justify because of constrained capacity.
Attractions are driven by opportune locations, preferably in the path of major attendance generators. Stadium crowds at sporting events may not provide the required flow.
High front-end R&D costs incurred in anticipation of a fast rollout are a plague.
Study the market and understand the nuances of its preferences. Pick your niches carefully and stick to them throughout planning and operation. Don’t try to change consumer behavior. The devil is in the details.
Keeps your eyes wide open and try to be objective about your pet project. You may think you have invented the next internet, but your market may not. On the other hand, be passionate about the project and its greatest cheerleader. Keep a balance between your passion and market-driven objectivity.
Narrowly concepted attractions won’t find a broad-based market. Along those lines, clear and concise branding is key. Make sure your brand measure is clear to your customer.
Assure that you have a critical mass of attractions to generate visitor interest for the required length of stay. Create enough capacity for your maximum design day on-site crowd.
Use realistic assumptions when looking to the future. Respect comparative and competitive performance. If you do better than projected, you can fix the problem (in most, but not all cases).
The attraction must start up fully formed. Phase I needs to be a complete show. Undercapitalized projects have a high failure rate. Create realistic models for development cost, revenue and expense.
Comments Off on 10 Ways to Avoid Chapter 11 in the Attractions Business
Over the years, we have wrestled with all the issues associated with new development including disagreements about what it should look like, what its mission should be, where it should be sited, who is its targeted audience (please, don’t say everyone!), and what’s the best way to keep the project on-time and on-budget. To be clear, these issues are complex and are made more difficult when there are many masters to serve. Still, when the project is to reflect the points of view, hopes, dreams, and legacies of America’s most important cultural export, (which I believe is cinema) there must be the most careful consideration to each one.
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