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CONCESSION CORNER

IALEI INDUSTRY REPORT—SHOWS INDUSTRY ON THE MOVE!

Hillsboro, New Hampshire — Trends tracked and industry movements downward and upward are now on the radar screen thanks once again to the IALEI (International Association for the Leisure and Entertainment Industry) 8th Annual Family Entertainment Center Industry Report. All statistical data on the operational and financial background for the report was gathered from attendees in two ways—at the latest Fun Expo Convention and Trade Show held in Las Vegas, Nevada September 16-20 and via members online. Your Perceptions Inc., of Denver, Colorado, a professional, independent research and marketing firm, conducted the survey, as they have for all eight years.

Important industry information was revealed in the report including that almost every segment in the industry claimed an increase. Family Entertainment Centers (FECs) and Children’s Entertainment Centers (CECs) showed the most growth in those facilities with fewer than 100,000 visitors. FECs are still a growing segment of the amusement industry in 1990, there were 250 businesses identifying themselves as FECs; today IALEI counts between 10,000 and 12,000.

Report Highlights
Other industry highlights gathered from the report include these items:
1) Pay-as-you-go, at 46% was by far the preferred pricing policy with combination pricing (a mix of pay-as-you-go and advanced tickets on some attractions) second at 37%.
2) 44% of surveyed facilities are geographically located in the west, southwest and Rocky Mountain region of the US.
3) The largest percentage of respondents indicated their FEC/CEC has 5,000 to 10,000 square feet of indoor space.
4) 71% of the FECs reported having a website.
5) During 2002, 22%, the largest percentage, reported their total annual gross revenue at their primary location as under $100,000. The next largest, 19%, reported $1,000,000 to 2,900,000 in annual gross revenue.
6) 38% of FECs report hiring only one to two salaried employees.
7) 66% of FECs and CECs indicate over 30 hourly wage earners.
8) 22% of FECs showed their attendance at 50,000 to 100,000
9) 45% FECs/CECs reported that the average amount spent per person, per visit was between $10.00 and $19.99.

FEC Facility Make-Up
The Annual Report revealed the average facility make-up by showing percentages for the most commonly found attractions. The top 10 facility elements reported by respondents include the following:
1) Coin-operated video games – 72%
2) Birthday and other parties – 69%
3) Redemption/skill games – 58%
4) Snack bar/food – 58%
5) Miniature golf – 40%
6) Soft modular play – 33%
7) Kiddie Rides – 31%
8) Mascot/custom character – 28%
9) Go-karts – 28%
10) Amusement rides -27%

85% of FECs offer up to three major amusements or rides, according to the survey. Miniature golf remains the main staple among respondents. Indoor miniature golf courses increased to the highest level ever at 21%. Laser tag continued to grow in 2002 with more square footage occupied among facilities offering it. 52% of FECs indicated that they operate a softplay structure. Parties continue to be the leading source of revenue and traffic for members of IALEI and attendees to Fun Expo. The majority of facilities is small to mid-size and can only accommodate between one and fifteen parties per week.

Respondents revealed their FECs’ top revenue sources in the survey as motion simulators (68%), Birthday and other parties (44%), miniature golf (38%), food & beverage (31%), and go-karts (29%). They also disclosed the elements they plan to have as birthday and other parties (63%), video arcade (58%), redemption games (49%), snack food (43%), miniature golf (39%), laser tag (33%) and go-karts (32%).

Who Benefits
The data from the Annual State of the Industry Report will enable current owners and operators of FECs to evaluate current industry trends. By looking at other operations, comparisons can be made to their individual accomplishments, operating procedures and practices.

This report offers developers and their investors detailed information on what is working for established entertainment centers. By tracking current pricing, budgeting and expansion trends, as well as attraction preferences, themes and changes, developers will be current on industry patterns.

By accessing detailed information on current user trends and future buying plans, suppliers are able to better target sales and marketing efforts and develop new products.

IALEI’s Industry Report offers a true snapshot of the industry—indicating its strengths, weaknesses, trends and high points. It draws conclusions offering valuable insights to build a more promising future upon.

The IALEI 8th Annual Family Entertainment Center Industry Report is available free to IALEI members or can be purchased by calling 630-464-6498 or e-mail to: info@ialei.org.

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