In view of inflation and general economic news, we’ve been asking present and former clients how their business is. The answers vary in degree but the pattern as we hear it is that the first half of 2022 was very strong whereas 2021 saw double-digit increases, often 20-30%. 2021 was described as a “record year” when compared to not to 2020 the “Covid year,” but to pre-Covid 2019. Over the summer we began to hear from more customers that business was softening, this year versus last year.

When assessing year to year it is important to note that early 2021 was still a period where the country was emerging from Covid-19, especially early in the year and especially Q1. Some facilities in some states remained closed, while others operated at limited capacity. Consumers still avoided public gatherings in many states.  The record sales began in Q2 and continued through to the end of 2021.

As to the Q3 2022 softening, we’ve heard that although walk-in traffic was down, it was offset by group and party sales increasing as people became more comfortable gathering together post-Covid.

Sampling the Numbers

We ran a few client’s sales numbers and looked at 14 locations in 11 states. 12 were BEC’s and two were Cinema Entertainment Centers with bowling. All were open the entire period in both 2021 and 2022 – the definition of “comp sales” in retail. We compared Q1 and Q2 2022 combined to the same period in 2021. We then compared Q3 on its own year to year.

A few highlights:

  • For Q1 and 2 combined, 2022 versus 2021, sales were up 54% in the aggregate (as above early 2021 was still ramping back up from Covid).
  • For Q3 2022 versus Q3 2021 sales were down about 1%. 9 locations were down, 5 were up.
  • Only 9 of the 14 locations were open for the full three quarters in 2019. We found that, for those 9, aggregate sales were up 18% in Q1-3 2022 compared to 2019.
  • Note that we measure “revenue” as defined by Intercard which tracks walk-in expenditures for arcade and FEC attractions, group and party revenues are generally counted elsewhere.
  • As discussed above regarding the Q3 calculation, we frequently hear from clients that although walk-in traffic started to soften during the summer, party and group sales was coming back. We conclude that overall Q3 business was probably up when party and group is accounted for.

Brunswick Showcase

We recently attended the Brunswick Showcase, hosted by Brunswick Bowling Products, where they bring together investors looking at opening bowling entertainment centers along with existing operators who attend panels and speak about their businesses. There is significant time devoted to networking. This gathering was very well attended. Many Showcase conversations centered on what proprietors are doing to generate sales, to hire sufficient people, or to otherwise manage staffing challenges.

  • Creative menu approaches, crafted to make the best of staffing issues in terms of kitchen efficiency and food cost considerations, are trending.
  • Owners are investing in automation, from additional play card tellers in the arcades and automated sales kiosks on the lanes, to more online sales.
  • Price increases have been common and often sold to customers through price packaging, discounting, specials, and other marketing techniques. In other words, managing supply and demand (guest traffic) and pricing by daypart.
  • There is a lot of excitement looking forward to the IAAPA show next month. All indications are that it will be well attended.

Wider Sentiment

I participate in a monthly conference call that includes senior execs in tourism (Orlando visitor’s bureau), hotels, resorts, theme parks and large FEC’s. Everybody reports business is good with strong indicators through the end of the year. Some specific comments (paraphrasing their words):

Regional Fun Park NJ (cross between FEC and Amusement Park): seeing a cautious consumer but one who has rebounded and adjusted to cost norms going forward. The consumer is looking for discounts/coupons/value adds. With their wages rising we think they’ll continue to patronize. We had a great spring break, and although May and June were soft (partially weather), August rebounded.

Orlando Tourism Board: members report 98% occupancy YTD versus 100% in 2019. Leisure hotel pace exceeded 2019 in August and September. October was running at -5% (this was mid-September call), November -11% but we expect to pick up and be “really strong.” We are seeing shorter booking windows and more drive-in business. That said, airline seat capacity is consistently up. People are willing to spend but may adjust how they spend (although we haven’t seen yet), such as buying less merchandise, etc.

Vacation Rental Complex, Florida: Our booking window is shorter which we think indicates a toughening economy. Up until now people have had money in their pocket but we think that will decline in the face of price and interest rate pressures. We think the second half of the year will be tougher. Tough to predict but we are being cautious. We are pacing ahead but the stays are shorter length, and the drive market is up. Our international attendance is soft.

Legacy Resorts, Orlando: We’re predicting +8% in 2023, the Orlando Parks have been packed. October was up 15%, November 10% and we project December at +25%. Business is Great.

Fun Spot, Orlando (large indoor/outdoor Fun Park: Looking for a great 2nd half. Groups, school trips, etc all coming back.

Boomer’s: seeing a more price conscious consumer especially in their lower income FEC’s in LA. Walk in traffic was not as strong in July and August. Good outlook toward the end of the year (Black Friday will tell how winter will play out). Groups and holiday party bookings are up over last year and increasing. There are more that drive up, more cost-conscious guests are down, destination locations/waterparks are up. Although the weekdays are slower, the weekends have seen increased traffic.


Business is generally good across leisure and hospitality with some softening late summer and signs of a more cautious consumer. It strikes me that while business may be softening, it does so against record sales versus pre Covid numbers. While year to year flattening or even decline is never a good thing, we seem to be leveling off at a very healthy place. The industry was extremely healthy in 2019.

A few closing thoughts:

  • Travel: the planes are full, airfares remain high, hotels are active, and when my wife and I go to a restaurant there’s usually a wait or a compromise on time.
  • Employment: Remains strong with unemployment at record lows. This comes with recruiting, retention, and payroll cost challenges, but it is also indicative of a strong economy at present.
  • All the positivity is tinged with fear of the future, stock market performance, and the challenges of higher operating costs, rising interest rates, and staffing issues.
  • We would expect higher interest rates to take a toll on new centers opening. Even there could be a silver lining for a less competitive marketplace for those in place and for equity owners and developers.