Can a post-pandemic world breathe new life into out-of-home entertainment? InterGame tries to answer this question by taking the US recovery as an example.
By Mark Griffith
Out-of-home entertainment has been one of the sectors hit hardest by the pandemic, with lockdowns prohibiting most locations from opening.
Even with restrictions loosened, health concerns and strict safety measures dissuade the majority of guests from leaving their homes, with reliable and safe methods of entertainment like streaming and console gaming just a button-press away.
As of April 12, the
United Kingdom has relaxed its restrictions, allowing small outdoor gatherings in places such as pubs and cafes, while from May 17, bingo halls, amusement centers and Fec - Family entertainment centers will reopen in much of the country. . Except in Glasgow and Moray, Scotland, still at high risk of contagion.
In recent weeks, the prolonged lockdowns have also seen many demonstrations by representatives of the sector, to demand an end to the restrictions.
For example
in Valencia, Spain, where arcade workers organized a protest in front of the Palau de la Generalitat to draw attention to the continuing closure of the activities.
On top of the pandemic,
Italy also continues to wrestle with frustrating legislation relating to arcades. Recent reconstruction of Italian regulations on amusement machines have been described as “disastrous” for the amusements sector; outdated regulations covering Italian amusement machines have been long overdue for revision, we are informed by Alessio Crisantemi, editor of Italian publication GiocoNews, who points out that under the current legislation there is no mention of ticket redemption games, for example.
Across the pond,
the US has struggled in keeping businesses afloat during downtime but is bouncing back in extraordinary fashion, according to David Wallace, Turfway Entertainment Management.
“Covid was definitely a bump in the road for most entertainment centres throughout the United States,” he said. “Although it was very challenging to survive, most did! With the government's assistance and reworking of loan packages along with lease arrangements, most properties were accommodated as needed. We were all in this together and most groups understood this. There were some, yet very few, banks and landlords that were not as forgiving, causing a small amount of permanent closings.
“As we started to open back up, business has been exceptionally well. Many properties are well over the 2019 pre-Covid numbers and continue to pace over last year at a high rate. This is due to many factors, including government stimulus payments, spring break ‘staycations’ and the time of year being one of the busiest, typically on trend. Social engagement is necessary and entertainment is a great path for friends and families to hang out again. Even properties with only 50 per cent capacity are seeing incredible sales, currently.”
Lockdowns in the US are lifting at a similar rate to the Uk. As such, the signs are looking positive for out-of-home entertainment to be back on track within around six months, said Wallace.
“
We are seeing a very strong outlook in the short term. However, at some point, once we are back to normal, sales will once again maintain a seasonal trend.
“We are expecting a six month, after Covid, bounce before we get back to ‘normal.’ In this honeymoon period, there are many new possible long-term guests. Treating them right will help the continued growth in the future.”
Although the past 12 months have largely been a waiting game, certain trends have emerged –
the demand for walk-in entertainment has grown due to its extensive forced absence, and there is also a predictable focus on hygiene.
“As of today, most properties are seeing significant growth. This is due to walk-in traffic, mainly. Corporate event business is starting to trickle in but our expectation is we will not see this back in full force, if things continue down the path of vaccines, until the fourth quarter of 2021. Some properties, depending on type of entertainment, average 25 per cent of revenues through corporate events. Once back, this will help bolster the already increased sales vs 2019, pre-Covid.
“On operational protocol, we are seeing enhanced cleaning, sanitiser everywhere and signage asking for the basics. Most groups are complying with the requests.”
The product that stands to benefit the most from the pandemic is mini-golf, said Wallace – he expects the game to jump in popularity as the coming months bring eased restrictions.
“Outdoor mini-golf is on a huge upswing due to the pandemic. We see this pattern to continue over the next several years. As well, there are a few new modern interpretations of mini-golf such as Tiger Wood's Popstroke, Creative Works' Lucky Putt, along with Puttshack and Swingers London, which are penetrating the US this year with several locations. These are designed to target millennials and social engagement with exceptional service, design and food/beverage.
“VR continues to climb and will be a main attraction in some new form each year. Indoor and outdoor social gaming is on a huge upswing as well. Many groups realise a significant downturn during the spring and summer months due to outdoor competition, adding outdoor ‘yard’ space with social attractions such as cornhole, bocce, fowling, ping-pong and billiards along with food and beverage opportunities will help withstand the downturn.”
Wallace is assured the industry can return to pre-pandemic levels.
“In most cases, it already has,” he said, “and business is growing in states that are open with limited restrictions. This bodes well for the other groups looking to reopen soon or add on to their limited capacity.”