Published
3 months ago
The Rise of Experiential Entertainment: FECs and Theme Parks Expand in 2023
The landscape of family entertainment centers (FECs) and theme parks is constantly evolving. These venues are constantly reshaping their offerings to engage guests, showcasing the importance of staying in tune with industry trends and consumer expectations. The Solomon Partners’ Experiential Entertainment Update for 2023 provides comprehensive insights into how these venues are adapting to changing consumer behaviors and economic challenges.
The Current State of Family Entertainment and Theme Parks
The Growth Trajectory of FECs Amidst Obstacles
2023 marks a time of resilience for family entertainment centers despite experiencing a slight downturn from the previous year’s sales. However, the sector still performs above the pre-2019 levels, indicating sustained interest in accessible leisure activities. A notable trend was an increase in the event sector, especially those organized by corporations. This uptick can be attributed to the shifting workplace culture towards a hybrid model, blending remote and in-office work. The industry is set to grow steadily, adapting and innovating in response to evolving consumer habits.
Theme Parks: On the Cusp of Surpassing Pre-Pandemic Success
Theme parks continue to thrive, with projections suggesting a return to pre-pandemic attendance levels by 2026. Despite a temporary dip in visitor numbers in early 2023 due to adverse weather conditions, there is a notable increase in per-visitor spending, reflecting enhancements in dining and attractions. Moreover, 2024 expects increased revenue per visitor, backed by a growing trend in season pass purchases.
Insights from Industry Leaders on Experiential Entertainment Trends
The experiential entertainment sector—particularly family entertainment and theme parks—has seen significant positive trends. It is embracing a post-pandemic resurgence that underscores a growing consumer demand for shared, tangible experiences.
The Pulse of Family Entertainment Centers in 2023
2023 has been significant for FECs, demonstrating a strong demand for affordable leisure options. Thomas Shannon, the Chairman and CEO of Bowlero, reported a 65% revenue jump from pre-pandemic levels, with a notable increase in event revenue, underscoring the high demand for in-person corporate gatherings. Similarly, Oliver Brewer, President and CEO of Topgolf, reflected on their success during the Q4 2023 Earnings Call. He said, “We delivered 1% same venue sales growth for the full year on top of 7% growth in 2022… adding 3 million to 4 million new unique visitors each year.” Topgolf expects more than 30 million unique visitors in 2024, highlighting the increasing popularity of active entertainment.
However, since publication of this report, Topgolf has encountered mostly rough waters in 2024. In early August, the company reported second-quarter sales that missed expectations, with the same-venue sales falling 8% from a year ago after a 7% drop in the first quarter. The company said during its latest earnings report that “it really is mostly a traffic issue” at Topgolf. The increasing costs of bay rentals seem to have deterred some patrons this year. The company largely attributes this to what it calls “cyclical macro challenges” and “post-COVID normalization.”
Theme Parks
The theme park sector has stayed strong, and attendance is expected to soon surpass pre-pandemic levels. Cedar Fair’s President and CEO Richard Zimmerman observes a speedy recovery in attendance, while Six Flags’ Selim Bassoul notes a 40% increase in guest spending per visit. “Progress continues with 2024 passes, which are generally up double-digit over 2023,” said Bassoul, suggesting a solid consumer commitment to theme park experiences. Marc Swanson, CEO of United Parks and Resorts, echoed this sentiment. “For the full year, we delivered near-record results… we are confident will eventually recover to and surpass pre-COVID levels,” remarked Swanson.
Adding to the positive outlook, Mordor Intelligence forecasts that the US amusement and theme park industry will grow from USD 23.77 billion in 2024 to USD 28.15 billion by 2029, with a CAGR of over 3.5%. Both family entertainment centers and theme parks are navigating post-pandemic challenges with remarkable resilience, fueled by innovative offerings and a deeper understanding of consumer desires for engaging in immersive activities. As these trends unfold, the future of experiential entertainment looks promising.
FEC and Theme Parks Revenue Growth CY 2023 Vs. CY 2022
Despite facing challenges, the Family Entertainment sector managed a promising 3% growth in average revenue for the calendar year 2023 compared to 2022. On a brighter note, theme parks have surpassed the pre-pandemic revenue levels, recording a solid 14% growth since 2019 and a 1% increase from 2022, signaling a solid recovery and positive future trajectory for experiential entertainment.
Dynamic Growth in the Site-Based Entertainment Industry Since 2019
The site-based entertainment industry has surged since 2019, adding nearly 600 new locations. Despite a 6.8% dip in locations primarily due to changes at Chuck E. Cheese, arcades and bowling saw a 39% increase overall, indicating sustained interest in these classic leisure offerings. Escape and Challenge Rooms have increased significantly, from 16 locations in 2019 to 121 today. Companies like Beat The Bomb and The Escape Game have spearheaded this rapid expansion, tapping into the growing consumer interest in immersive, interactive experiences.
Competitive socializing venues like Popstroke and Puttshack Mini Golf have exploded onto the scene, soaring from nonexistence to 64 locations. Similarly, sectors like trampoline and adventure parks, VR game rooms, and karting/thrill experiences have seen a remarkable surge, with an average growth rate of 240%, highlighting a significant shift towards engaging and interactive leisure pursuits.
This expansion highlights a vibrant and evolving industry, continually innovating to capture consumer interest in varied, immersive leisure activities.
Capitalizing on the Trends
As reported by Global Market Insights, the FEC market is valued at an impressive USD 28.2 billion in 2023. Expected to surge at a CAGR of over 10.5%, it’s projected to hit the USD 70.1 billion mark by 2032. Theme parks are not far behind, marking near-record financial outcomes despite slightly lowered attendance, with spending per visitor at an all-time high.
These trends present a golden opportunity for FECs and theme parks to improve on-site engagement and boost revenue streams. Amuze’s custom solutions are designed to help your venue tap into customers’ steady spending and draw in new and repeat visitors to boost your business.
If you’re looking to turn your venue’s empty spaces into dynamic sources of income, get in touch with Amuze. We provide the innovative strategies necessary for this progress, making each guest’s visit unforgettable and maximizing profit from every available space.
Contact Amuze and embark on a journey to redefine entertainment and profitability.
