The industry saw slight growth despite declining demand during the recession.
Los Angeles, California (PRWEB) August 18, 2013
During the five years to 2013, the Golf Driving Ranges and Family Fun Centers industry is expected to grow at an average annual rate of 0.1% to $8.7 billion, though revenue declined 1.6% in 2013. The industry, which includes recreational and amusement services, like golf driving ranges and go-cart racetracks among other recreational operations, "experienced lower revenue growth during the recession but implemented cost-cutting strategies to maintain profit margins," according to IBISWorld industry analyst Sarah Turk.
An increase in gas prices, coupled with a decrease in disposable income, caused consumers to spend their disposable income locally. Overall, the recession caused per capita disposable income to decline at an annualized rate of 0.1% during the five years to 2013. Additionally, a stagnant growth rate of 0.0% in time spent on leisure and sports caused Golf Driving Ranges and Family Fun Centers industry demand to remain stable. However, positive factors did boost demand for the industry in spite of the recession. For example, "consumer confidence grew at an annualized rate of 6.0% in the five years to 2013, which reveals that consumers had a positive economic outlook, inciting them to spend rather than save their disposable income," says Turk. However, an increase in consumer spending will intensify competition from other industries.
Although the recession hindered many enterprises from entering the industry and firms from developing additional establishments, firms mitigated recession losses by cutting costs. Overall, 2008's 5.3% reduction in the workforce and a 1.6% drop in wages in 2009 allowed firms within the industry to retain high profit margins of 5.4% in 2008 and 4.2% in 2009, respectively. Despite per capita disposable income declining during the five years to 2013, growth in the number of adults aged 20 to 64 offset the negative impact. Market players such as CEC Entertainment Inc. used effective marketing strategies such as increasing coupon discounts to appeal to budget-savvy consumers.
The Golf Driving Ranges and Family Fun Center industry has a low level of concentration. The industry is highly fragmented and consists mainly of small businesses, with major players Dave & Buster’s and CEC Entertainment Inc. dominating. Most industry enterprises are independently owned and operate only one facility. The plethora of activities and services the industry encompasses also contributes to the high degree of fragmentation. Market concentration is expected to remain highly fragmented over the five years to 2018.
As the economy recovers, the industry will face heightened competition. To combat the decline in leisure activity, the industry has increased its appeal by investing in facility infrastructures, updating gaming systems with the latest technologies, and offering menus that cater to the health conscious and gluten-free consumer. Over the five years to 2018, revenue is forecast to increase.
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IBISWorld industry Report Key Topics
This industry provides recreational and amusement services through a variety of establishments, including golf driving ranges, miniature golf centers, go-cart racetracks, batting cages, family fun centers, recreational sports leagues and a wide assortment of outdoor recreational activities. The industry excludes arcades, themed amusement parks, gambling facilities, golf courses, country clubs, skiing facilities, marinas, fitness and recreational sports centers and bowling alleys.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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