Discretionary spending slowed during the recession, but interest in recreation is picking up.
Los Angeles, CA (PRWEB) December 29, 2012
Over the five years to 2012, the Golf Driving Ranges and Family Fun Centers industry grew slowly at an average annual rate of 0.3% to $9.3 billion. The industry, which includes recreational and amusement services, like golf driving ranges and go-cart racetracks (among a number of other recreational operations), was hindered by the recession during 2008 and 2009. According to IBISWorld industry analyst Radia Amari, “Because industry revenue relies heavily on discretionary spending, high unemployment rates and low disposable income initiated by the economic downturn caused industry revenue to decline.” When consumer spending dropped 1.9% in 2009, recreational activities and luxuries were some of the first expenditures to be cut. Reduced spending began to reverse in 2010 as some of the fears surrounding the economy subsided.
Demand for industry attractions is facing increasing competition from substitutes like gyms, video games and the internet. However, industry revenue will remain constant. “Increasing consumer sentiment and consumer disposable income will generate demand, as will increasing prices for external competitors, like amusement and theme parks,” says Amari. As prices for these attractions rise, consumers will opt for cheaper entertainment options like recreational sports leagues and batting cages, both industry services. Although industry firms will benefit from this trend, such growth will be offset by people spending less time on leisure and sports once unemployment declines and people return to the workforce. Time spent on leisure and sports will decrease at an average annual rate of 0.4% over the next five years.
The Golf Driving Ranges and Family Fun Center industry has a low level of concentration. IBISWorld estimates that the top three firms operating in this industry account for less than 15.0% of industry revenue. The industry is highly fragmented and is comprised of small businesses. Most industry enterprises are independently owned and operate only one facility. More than 93.0% of all employing establishments employ fewer than 20 people. The array of activities and services encompassed by the industry also contributes to the high degree of fragmentation. The industry also has low barriers to entry that enable companies to enter the industry with ease. Market share concentration is not expected to change over the five years to 2017.
To combat the decline in leisure activity, the industry has sought to increase its appeal and revenue through the addition of food and drink sales. Many industry establishments now have food service operations in conjunction with their recreational offerings. For example, food and beverage sales generated an estimated 51.0% of major player Dave and Buster's revenue in fiscal 2012. The segment has helped the industry recover from losses incurred during the recession. In 2012, however, total industry revenue will remain flat, growing 0.3%. Industry establishments are also steadily growing, albeit slowly, and are returning to prerecessionary numbers. In the five years to 2012, industry establishments have grown at an estimated annualized rate of 0.3% to 94,200.
For more information, visit IBISWorld’s Golf Driving Ranges & Family Fun Centers in the US industry report page.
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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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