Despite some fluctuation during the recession, the industry experiences stable demand.
New York, NY (PRWEB) August 17, 2014
Proprietors within the Strip Clubs industry have been distancing themselves from the seedy image associated with clubs in the past. Instead, they market their establishments as high-class gentlemen's clubs and cocktail lounges that offer adult entertainment. Despite the updated image, changes in consumer spending (i.e. fluctuations in per capita disposable income) and behavior (i.e. fluctuations in per capita expenditure on alcohol) continue to be the main determinants of industry demand, both of which have improved over the five years to 2014. As a result, IBISWorld expects Strip Clubs industry revenue to increase at an annualized rate of 2.5% to $6.2 billion over the five-year period, including growth of 1.1% in 2014 alone.
According to IBISWorld Industry Analyst Daniel Carusotto, “Even though demand for industry services has remained fairly stable over time, the industry depends heavily on overall levels of disposable income.”
Operators in the Strip Clubs industry typically offer add-on services, such as VIP rooms, in addition to public dances. VIP rooms are more expensive and tend to be cyclical in nature. As economic conditions have improved over the five-year period, strip club patrons have been spending more on these add ons, leading to higher revenue for industry participants. Additionally, due to higher demand, strip club operators have been able to offer less promotions, enabling profit margins to expand over the five years to 2014.
In the five years to 2019, the Strip Clubs industry is expected to experience solid demand. “While disposable income growth will drive demand, competition from external sources such as online adult entertainment and escort services will provide legitimate competition,” says Carusotto. Additionally, public opposition will cause the regulatory environment to remain strict. For example, New York City has begun revoking clubs' liquor licenses, making it difficult for establishments to remain in business.