Wallet + Time Share
No, we’re not about to try and sell you a one-tenth share of a lovely beach-side condo in Boca Raton (although that sounds quite wonderful this time of year). However, time is truly of the essence, and the days and hours of people’s lives they’re willing to spend at your destination are ever-dwindling. After tackling the necessities of sleep, work, dining, and managing family and house needs, leisure time is a small, and hot, commodity – and countless attractions and services, outside your doors, are competing for that time.
“Share of Wallet” is the percentage of disposable income that a business is able to capture from a single consumer.
For example, let’s say the Kapoors just hit pay-day on Friday and arrive at your attraction Saturday morning with $800 of disposable income (money after taxes and bills) for the week. When Mrs. Kapoor opens her wallet at the ticket counter, what portion of her weekly disposable income will she spend on you for the day/weekend? If she spends $100, you’ve gotten 13% of the Kapoor’s Share of Wallet.
When analyzing competition, we most often consider the other brick-and-mortar attractions in our direct market: the other museums, zoos, theme parks, aquariums, theaters, FECs, etc. However, there is a large, diverse, and tempting selection of other entertainment outlets that don’t fall in line with our traditional peers: festivals, sports, tabletop games, watching TV, and exercise. In this issue of Destinology, we explore the other competitors, reveal their popularity and trends, and work to understand their success. Equipped with this information, you can make key management decisions to capitalize on the appeal of these different pastimes and coordinate your efforts to partner with them, increasing your share of guests’ time and wallets.
This Event Goes to 11
Whether it’s dining on deconstructed donuts or sipping sumptuous cider, or doing both while singing along to your favorite chorus, the “festival boom” in America is alive and well. A recent report by Eventbrite witnessed a 47% increase in the number of food and beverage events between 2013 and 2014. Unsurprisingly, Millennials are at the epicenter of the flood of festivals. 80% of Millennials attended at least three food, wine, or beer festivals last year; 44% attended five or more; and 67% say it’s one of their favorite things to do.
And why shouldn’t they? Festivals embody so much of what Millennials love: spending time with friends, enjoying music and alcohol, highly-sharable unique experiences, a community of like-minded fans, escapism, and contributing to grass-roots artists and local economies. Eight in 10 Millennials say they want to know more about how their food is produced than brands typically disclose: 55% of Millennials attended beer festivals to meet the brewers, while 42% attended a food festival to meet the chefs.
After the snacking and drinking are done, however, it’s time for a mic check. According to Aloompa, 51% of Americans attended a live music event in 2015, up from 2014’s 44%. 32 million Americans go to at least one music festival annually, with the average distance traveled to that event being 903 miles! As of Umbel’s 2015 survey, there were 800 American music festivals (and growing), and the five largest grossed $183m (excluding food, beverage, and merchandise)! The Hip-Hop and Electronic Dance Music (EDM) genres are the most popular among these music events, while the $2b international box office tour market is topped by Beyonce, Justin Bieber, and Bruce Springsteen.
Three Key Take-aways
- Variety: Festivals and events are a great bargain – attendees can typically experience a myriad of artists and entertainment for a fair price.
- Community: These events provide attendees an opportunity to celebrate a passion with other fans, while getting to know the creators of their favorite flavors and melodies.
- Brand Loyalty: “Brand loyalty in the concert game often begins in the live environment and then drives additional sales online through social media, VIP-exclusive downloads, and merchandise sales. The simple theory is that if you make a new fan and keep them interested, you can usually keep them coming
Blue 42, Blue 42, Hut Hut!
It’s no secret that we love our sports, 47% of Americans follow college sports. The NCAA is thankful for your support, netting $797m in revenue last year. 31 million Americans attended a college game last year, with men’s football and basketball being the most popular.
PricewaterhouseCoopers recently forecasted that the entire North American sports market would grow to $73.5b by next year, up from $60.5b in 2014. However, that growth is not being driven by admission; it is being driven by media rights deals, as many fans are choosing to stay home to watch “the big game” rather than venturing out to the arena or stadium. 2016 saw the sixth consecutive year of dwindling college football home attendance, with average attendance at 43,106 fans per game – the lowest since 2000. Leagues like the NBA and NFL are experiencing attendance declines as well, and hundreds of sports commentators and economists are hypothesizing explanations. Theories include disillusionment with the plethora of scandals, the cost of attendance (Yahoo Sports estimates that it costs a family of four an average of $443.93 to attend a three-hour NFL game), the convenience of live-streaming, and many more nuanced explanations.
There are certainly numbers to back up the live-streaming explanation. According to Nielson’s Year in Sports Media Report, “more than 127,000 hours of sports programming were available on broadcast and cable TV [in 2015], and viewers spent more than 31 billion hours watching sports, up 160% and 41%, respectively, from 2005.” From the same report, 95% of total sports viewing happens live; while associated statistics reported by The Globe and Mail note that many young viewers rarely sit and watch a full game – they’ll catch highlights and clips online afterwards. In fact, overall TV viewership of sporting events is on the decline, while mobile and desktop viewing is making up for it.
Our industry may benefit from closely monitoring and adapting to what’s happening in the sports industry: fans are finding more convenient and affordable ways to enjoy the pastime, and the classic value proposition is no longer selling (all of) them. Teams are currently experimenting with ways to increase the value of attending a game, from implementing dynamic pricing, to more tantalizing promotions, to renovating arenas with technology and more intimate seating and suites to lure their fans away from their screens and into their stadiums.
A Binge-worthy Lifestyle
Last year, US adults spent an average of four hours a day watching traditional television and 221.8m people tuned in for 73 minutes per day to watch streaming video. In a recent report by Fluent LLC, 67% of internet users watch streaming television; and surprisingly, 61% also still watch TV on cable. It’s not just Millennials who endorse the sharing economy, though: while 77% of Millennials say they use streaming services, 65% of non-Millennials use it as well (not too large of a gap)! When asked why they subscribed to these services, respondents reported the following, in order:
- 34% Low cost
- 29% The convenience of watching content on any device
- 18% Access to original content
- 7% Access to syndicated content
At the end of 2017, Netflix had 128 million subscribers, with 61% of Millennials paying their monthly dues, followed by Amazon with 85.3 million and Hulu with 32 million subscribers. Netflix’s market leadership is attributed not only to being the first-to-market disruptor over two decades ago, but also for consistently rolling out quality content and innovating its user experience. The company is currently working on mobile-only versions of its original content, to ensure those shows flow smoothly on those devices, and is also experimenting with interactive storytelling technology, allowing viewers to vote and determine the outcomes of characters and situations.
Original content is a massive opportunity for these companies. Netflix noted it would spend between $7b and $8b on original content this year, with its shows like The Defenders and Fuller House matching the scale of cable viewing audiences of The Big Bang Theory and last fall’s Texas A&M vs. University of Alabama football game. While Amazon Studios were nominated for 15 Prime-time Emmy Awards, Hulu’s original series The Handmaid’s Tale won one for Best Drama.
When it comes to distilling the essence of this success, streaming services offer comfort, control, and variety, all at a remarkably low price. While licensing content at attractions – such as traveling exhibits or IP-based rides – carries with it surges in attendance and brand recognition, streaming media services are enjoying the control and flexibility that come with original content. Lastly, Netflix remains in the lead because it continues to push the boundaries of technology and innovate on the user experience – something every destination should aspire to accomplish year-over-year.
A Critical Hit
Board gaming has been undergoing an enthusiastic renaissance in the last decade, with friends and family gathering around the dining room table and gaming cafes, rolling dice, bargaining for sheep, and attending gaming conferences. The US and Canada hobby game market had an estimated $880m in sales in 2014, up 20% over the previous year, with global sales reaching $9.6b in 2016, according to Euromonitor International.
Classics with massive followings – like Dungeons & Dragons, Magic: The Gathering, and Warhammer – as well as thousands of new titles, may owe some of their success to the introduction of Settlers of Catan in 1995. A “Eurostyle” gateway game – one which focuses on strategy, cooperation, compelling themes, and attractive art – has sold over 18 million copies worldwide. When asked about the game’s success, Guido Tubor, managing director of the game, said, “Catan has benefited from a growing desire to interact and socialize away from screens. Specifically, Catan is a game in which players are always involved. There is no downtime. It requires social skills to play cleverly. It’s a game that is characterized by creating win-win rather than zero-sum situations.”
Other gaming enthusiasts have noted that board games teach life skills like strategic thinking, learning to win and lose, organization, resource management, and pre-planning. Millennials find tabletop games particularly appealing from a financial standpoint: while the upfront investment may be steep (Catan retails for $39.99), the games may be played indefinitely, virtually anywhere.
Kickstarter is an essential influencer in the market as well, noting… $196m raised for nearly 4,000 tabletop related projects in its lifetime.
Some of the most famous being Cards against Humanity, Exploding Kittens, and Zombicide expansions. As the last generation purely raised on board games, Millennials may find a touch of nostalgia in the cardboard and plastic pastime.
There are a number of key lessons here for our industry. First, Millennials love the board game value proposition of a high initial investment coupled with long-term, varying repeatability – which sounds an awful lot like season passes and memberships. Second, Kickstarter has been a fantastic platform to gauge target-market interest in board game themes and mechanics, as well as listening to community feedback to help shape games’ development. Lastly, destinations provide unique settings for gamers to play or attend events – you may want to start planning your next (or first) Magic: The Gathering tournament.
What Moves You?
It’s a new year, which means you’ve most likely just made a fitness resolution. The first thought might be to sign up for a gym membership, and you certainly wouldn’t be alone: Since 2016 in America,
36,000 fitness centers
57.25 million members
12% of them signing up in January.
Unfortunately, most of those new members will stop going after six months, according to the Fitness Industry Association. Although gym memberships have steadily risen by 18.6% between 2008 and 2014, a study reported by RealBuzz notes that 80% of Americans don’t even use their gym memberships.
The US government recommends that adults get at least 2.5 hours of moderate intensity aerobic exercise, 15 minutes of vigorous activity, and two muscle work out sessions per week. If that sounds like a lot, you’re in the majority: a 2013 report by the Center for Disease Control and Prevention said that 80% Americans didn’t meet that recommendation. At that time, the most active adults could be found in the western United States, the fittest in Colorado, while West Virginia and Tennessee were home to the most lethargic. However, the average daily participation in sports and exercise has been on the steady rise: according to the Bureau of Labor Statistics, 15.9% of Americans over the age of 15 were engaged in exercise on a regular day in 2005, while that rate grew to 19.5% by 2015.
The same study noted that walking is the most popular physical activity in America, distantly followed by weight lifting, cardiovascular equipment, and running. More than half of Americans prefer to exercise alone, about a fourth exercise with family members, and only about 3% exercise with coworkers.
Along with your resolution, you may have sworn to complete your first half or full marathon. Although participation has continued a small decline since 2014, 507,600 people completed marathons while 1.9 million completed half marathons in 2016. Women in their late thirties are the largest demographic, and the New York City, Chicago, and Boston marathons are the most popular.
Your destination has a unique opportunity to host and reward exercise, of which the health and societal benefits are lengthy. Consider opening your doors to races, like the Cincinnati Zoo and Botanical Garden’s Cheetah Run, or renting space to trainers to run fitness classes. Attractions could also offer discounts to guests who can present registration confirmation or participation medals from local fitness events.
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