Despite some fluctuation during the recession, the industry enjoys stable demand
Los Angeles, CA (PRWEB) July 25, 2012
Proprietors within the Strip Clubs industry like to distance themselves from the image of seedy, smoke-filled relics from the past. Instead, they hype and design their establishments as high-class gentlemen's clubs and cocktail lounges that just happen to offer as their primary forms of entertainment dancers who “strip” themselves of clothing as they perform until they are in a nude, semi-nude and or bikini-clad state. It remains unclear whether this business strategy has paid off; strip clubs enjoy relatively constant demand. Although changes in consumer spending (per capita disposable income) and behavior (smoking and drinking) can create year-to-year fluctuations in strip club revenue, demand for the industry as a whole persists over time, according to IBISWorld industry analyst Josh McBee. Despite recession-induced dips early in the period, IBISWorld expects overall revenue to increase at an annualized rate of 4.5% during the five years to 2012. In addition to relatively stable demand, strip clubs benefit from a rather unusual business model in which their entertainers work as contractors rather than full-time employees. Strippers pay club owners a fee for access to the stage. In turn, the stripper gets to keep whatever tips received from patrons during the course of a shift. This model helps keep wage costs low for owners while also generating another stream of revenue in addition to cover charges, food and drinks, VIP services and dues collected from performer tips, in some cases. The downside to the industry consists mainly of changing regulations regarding such employment plans, obtaining licenses to sell food and alcohol, and pressure from some communities to locate elsewhere.
The Strip Clubs industry is expected to push through such challenges, continuing down its current course of redefinition into the high-end spectrum of the nightlife market through ongoing renovations and upgrades to facilities and technologies. Revenue is expected to grow 6.2% in 2012 on the back of renewed consumer spending and pent-up demand created during the recession, which will bring the industry's total sales to an estimated $7.4 billion, McBee says. Performer services are estimated to generally make up the bulk of revenue, followed by beverage and food sales. Through 2017, growth is forecast to persist.
The Strip Clubs industry is highly fragmented, with a large number of owner-operated local and regional enterprises. Few companies manage to operate multiple proprietary clubs across state lines, and no clubs generate revenue greater than 5.0% of the overall industry's revenue. In the United States, Rick's Cabaret International is estimated to be the industry leader with a 1.0% percent share of the industry's total revenue. Between fiscal 2008 and fiscal 2011, Rick's acquired 12 existing nightclub operations and opened one more. In addition, the company acquired a media division that has enabled greater marketing and advertising opportunities. Market share concentration is forecast to remain low, as tighter regulations in cities and towns across the country make it difficult for larger operations to expand. For more information, visit IBISWorld’s Strip Clubs in the US industry report page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld
Friend IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189
IBISWorld industry Report Key Topics
Companies in this industry operate adult entertainment venues in which striptease or other erotic or exotic dance is regularly performed for males, females or mixed audiences. Establishments may also serve food, beverages, alcohol or offer patrons the opportunity to bring their own beverages. Firms that only license brand names to clubs without directly operating them are excluded.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.