Eatertainment

In short Eatertainment is a combination of food and entertainment in an out-of-home destination. A few well known examples of Eatertainment Venues are

The list of venues could be expanded to hundreds of new concepts in this fast growing market segment. As retail has largely shifted online, malls and big box stores have lost tenants. These spaces need new concepts that people will leave their homes to attend, and Eatertainment concepts are an option that has proven successful. In addition to free standing entertainment concepts, traditional business models are including eatertainment in their new models.

For example, nearly 100% of new bowling alleys will include a bar, restaurant, an arcade and other entertainment options like Laser Tag, escape rooms, ax throwing etc. Movie Theaters are adding food, bars, and additional entertainment. Big movie studios like Netflix, Sony, and Warner Brothers all have Out-of-Home Entertainment divisions focusing on building places that are extensions of their brand. These places are often Eatertainment locations. There is a big difference between the types of places these studios typically build and the other types of venues mentioned like movie theaters, bowling alleys, and Dave and Busters. The difference is some are targeted to tourist locations and other to a community based client base.

Eatertainment for local markets is significantly different than for tourist destinations. These facilities rely on bringing the same customers back to the facility for multiple visits. These customers are much more price sensitive than tourists. This means that attractions offered must not be overpriced and must lend themselves to repeat business. For example, if a family goes to Disney World they may pay for pictures of them on the rides. There is no way that same family will buy pictures of them bowling once a month for a whole year. Many virtual and augmented reality experiences are expensive and require a high cost per play. A customer may spend the money to try the experience once or twice but will not typically continue to spend a high dollar amount for an experience they have already had. We often see these types of attractions perform well for 3 to 6 months and then drop off precipitously afterwards. Get Started.

There are several pricing advantages to tourist-based Eatertainment venues. Tourists are typically willing to spend more on their vacation than they would on a regular basis. This allows for increased prices and allows for higher end attractions that require a higher price. Tourist locations have new customers coming on a regular basis and therefore have a steady supply of guests willing to spend at higher rates. The challenge in these locations is there are typically strong competitors. It is important to offer an experience that surpasses the competition which is harder the more competitors are in the market. Get Started.

One of the biggest mistakes we see with Eatertainment venues is leadership coming from amusement parks and running the business like an amusement park. The business models are very different. Amusement parks generate their revenue from gate sales including retail purchasing as well as season passes. This generates traffic, and the market relies on increasing per caps from the guests that are coming and ensuring those per caps are at a high margin. Eatertainment venues do not have a price for entrance, nor do they have roller coasters or similar massive attractions that drive traffic. Community-based Eatertainment venues need to have reasonable pricing, great customer service, and an offering that keeps guests coming back.

Think of Chuck E Cheese, how often have you heard someone over 10 years old suggest going there to eat? The answer is probably 0, because it isn’t known for its food, the offering is geared towards small kids, and the seating is not sufficient on busy days to enjoy the experience. Chuck E Cheese relies on a stream of birthday parties to generate traffic. Rarely does a child have a party there more than once, so they have continuously pushed margins by lowering costs to the point that the experience is not good. Chuck E Cheese went bankrupt in 2020. They are no longer a public company, so we can’t see their numbers but I would estimate they are not doing well. At the same time one of our former clients Pizza Ranch is thriving. In conjunction with the Pizza Ranch team we created a right sized Eatertainment model for their small Midwest markets. We created a custom arcade model designed for their customers, in their markets, and they have grown from 1 to over 50 locations with Eatertainment model and growing rapidly. Get Started.