Bowling is currently the No 1 anchor attraction in the Family Entertainment Center (FEC) industry. This is good news for bowling related suppliers and great news for those who can afford the several million dollars required to start a new bowling-anchored FEC or one of the many bowling hybrid concepts. There has been slow but steady growth over the past several years in the bowling hybrid category. An average of 40-50 new bowling-anchored facilities are being built or retro-fitted into existing big box spaces in the U.S. annually, but these few hundred facilities are usually located in the larger population markets (only a very small percentage of FECs have the space to add, for example, a 28-lane + 4-lane VIP suite full bowling attraction but can add 8, 10, or 12 lanes and be highly successful). However, the simple fact is these few hundred new hybrid bowling centers cannot by themselves sustain an entire world-wide bowling industry!
So, what are the 4,000+ remaining existing U.S. bowling centers (the ‘backbone’ of the bowling industry) doing to insure bowling’s future? The answer is, anything and everything to fight for their survival: installing new scoring, sound, and lighting systems, interior/exterior modernizations, improving food operations, incorporating new social media advertising methods, implementing youth bowling, in some cases lowering prices just like the B movie theaters do, and of course, adding redemption games and other family attractions.
Yes, progress is being made converting bowling centers into bowling-anchored family entertainment centers, for those proprietors that like the family entertainment center business model that attracts a wider demographic. This option is far less expensive than creating a multi-attraction FEC from scratch. Every bowling center has almost all the basic requirements already in place: The building is built and hopefully paid for, if owned (with good ceiling height and few columns across the lane beds), the rent and utilities are already paid each month, the bowling equipment is in place, and the food & beverage, bathrooms, HVAC, control desk, offices, and parking are already taken care of. All that is missing is the additional space required, the financing, and a new business model for the proprietor to learn and adapt to. Existing bowling centers already have good relationships with their local community banks, so today’s bowling proprietors are in the best position to obtain financing for a conversion, particularly if the real estate is owned and has equity.
In some cases, the space comes from removing or covering up several of the lanes. Although proprietors are still overcoming the fear that taking out lanes is akin to cutting off their arm or a leg, this concept is gaining industry grape vine buzz approval. For example, removing eight lanes provides 6,000 sq. ft. of usable space if the 16-inch depth is filled in to create a floor that is level with the rest of the center. If a sub-floor is used, the space is slightly less as ADA ramps are required between the two different levels. With 6000 sq. ft., there is enough space for 30 games, a redemption prize center (RPC), and some small storage space (a total of 2000 sq. ft. for the arcade), with 4000 sq. ft. remaining for one large or two smaller footprint attractions. Various space allocation combinations using 50 sq. ft. per game as the most efficient layout criteria are all available. 40 games, RPC and storage would occupy 2500 sq. ft., leaving 3500 sq. ft. for one or more attractions. [One pair of mini-bowling lanes takes up 500 sq. ft. A good size laser tag with vesting and briefing covers 4000 sq. ft. Bumper cars (12 set takes up 1500 sq. ft.)
To be successful, the new business model needs to be fully understood, especially by the banking industry. In a nutshell, a new business is being added to the existing bowling business. The two businesses feed off each other – and they can both grow. The first step is to determine the existing number of customer visits to the bowling center. This is the gross revenues divided by the average per capita spending per visit. Asking a dozen or so different customers (league and non-league, older and younger, families, birthday party, corporate) how much each Individual spends on average for each visit to your facility and then taking the average from all group categories will give you a pretty good idea. For example, if your annual gross revenue is $1,000,000 and the per capita spending is $15 per visit, the total customer visits or annual attendance is 66,667. From my many years of industry operating and consulting experience with bowling centers, games average per capita spending will range from a low of $3 per capita to a high of $4 per capita just by placing the games (including a reasonable mix of the core revenue generating ‘work horse’ redemption games that generate 70% of the game revenues) in a high trafficked, open space area of a bowling center. In this example, this equates to potential games revenue of $200,000 to $266,668 per year or a weekly average of $4000-$5333. This calculation uses 50 weeks/year instead of 52 weeks/year so the theoretical results are more in line with AEM’s actual real world actual financial information collected from more than 100 bowling center clients over a 20-year period.
The addition of games and entertainment center attractions will expand your target market, which will bring in new customers that do not currently bowl or do not bowl more than 1 time per year (though many of your FEC visitors will eventually bowl or bowl more often when you offer loyalty program incentives). Having an FEC In your bowling center also encourages existing bowlers to stay longer and spend money on the new games and attractions, as well as on additional food and beverage. Some existing bowling customers will visit more often and some will now bring with their families and friends to play the games, use the attractions, eat and drink and bowl. Some will have their children’s birthday parties at your center primarily because of the new games and attractions. Another feature of the new business model is that since there are less lanes and more customers, there will be periods where bowlers will have to ‘wait’ to bowl. What will they do while they wait? Of course you already know the correct answer: They will eat, drink, play games, use one or more of the attractions and all of this results in a slightly higher per capita spending and an increase in visitation frequency!
Financials of bowling centers that have added a FEC component by removing or covering six, eight or more lanes (depending on how many lanes they had) have shown a 50%-75% or better increase in total center annual gross revenues. In our example of utilizing 6000 sq. ft. of an existing bowling center that Is grossing $1 M/year, conservatively, there would be an expected increase of $225,000 in game revenues (not including current annual game revenues of $40,000 generated from a dozen video and crane games-an assumption on my part of your current situation) plus $250,000 from laser tag (an example of a good single attraction choice) plus an increase food & beverage, birthday party and group/corporate sales, and even an increase in bowling revenues, produces a total facility gross revenue increase of $500,000 to $750,000 (that same 50%-75% I alluded to previously). This new financial model also includes additional revenue from bowling and non-bowling birthday parties and opportunities to increase open play (higher line per game or time pricing) to offset any lost bowling revenue from the removed lanes that many proprietors are fearful of. In every case that AEM was involved in from the outset, the bowling revenue actually increased with the bowling center having less lanes than previously!
Another way to look at this new model is from a 3rd party FECs perspective. The financial picture of a small FEC opening in the same target market where your bowling center is located is not a pretty picture. For example, a small 12,000 sq. ft. FEC with 30 games, two attractions, a snack bar (no alcohol), and three party rooms would require an attendance of only 33,000 at an average $15 per capita to gross $500,000. With traditional occupancy costs (Rent max is 15% of $500,000 = $75,000 or FEC would have to find a space where rent+ CAM would have to be $6.25/sq. ft. for 12,000 sq. ft.), infrastructure, games/attraction investment, and operating costs, the FEC could not possibly survive with such a low yearly revenue. In our bowling-anchored FEC example, the FEC portion alone would generate the same or better annual revenues as the example 12,000 sq. ft. FEC, while utilizing only 6000 sq. ft. and having no additional rent expense, a much lower infrastructure expense, and significantly lower additional operating costs. In addition, there is little doubt that the bowling-anchored FEC would naturally capture a much larger attendance and market share than the FEC could possibly hope to achieve with such a bowling-FEC in their market as their major competitor.
This new bowling-FEC business model can help hundreds of existing bowling centers in small towns and cities across America continue to run leagues and sanctioned bowling tournaments in many cases, and remain profitable for at least the next decade. It is in these upgraded and modernized bowling centers that young children will continue to learn to bowl, taught by the bowling industry professionals and continue bowling throughout their adult lives, even if they bowl only a few times per year. The games and FEC attractions will continue to change and evolve, but the No. 1 attraction, regulation bowling, can have a place in our future. My guess is that the majority of the existing bowling centers that embrace this new bowling-anchored FEC model can remain profitable and relevant so today’s proprietors will have the option of passing down the new business to their family members or selling It off at a handsome profit!
Bowling Center Management – Entertainment Center News October 2013 (Updated December 2015)