Characteristics of the Industry
Entering the laser tag industry can have plenty of hurdles and challenges. Should you pursue opening a laser tag attraction? What are the barriers of entry and how can you overcome them? Distribution Patterns and Traditional Channels
Laser Tag centers that are Stand Alones typical are purchased when an investor or entrepreneur visits another laser tag center or attends a trade show. The investor then engages in market research to select which system that can be afforded and the proper place to retrofit or install the facility.
One of the greatest barriers of entry to this industry is the cost. A Stand Alone costs an average of $350,000 - $500,000 without the purchase of the land or building. The price is not the only barrier; banks generally will not finance a laser tag center because there is no value for used arenas and guns and startup entertainment facilities are considered risky.
Laser Tag centers that are Attractions are typically purchased by an operator of another amusement attraction such as a bowling or skating center. The typical purchaser is looking at investing as little as possible since it is not their primary revenue generator. These types of operators have the highest failure rate due to their self-imposed budget restraints. The facility generally lacks a WOW! factor and is run as a secondary or side-line business so advertising, staffing, or maintenance of the facility does not receive the priority that the primary revenue generator gets.
Typical Promotional Activity
Most laser tag centers promote their activity through the use of birthdays parties, group or corporate events, member nights, 2-for-1 passes, free game passes, calendar days, super Saturdays (for kids age 6-12 for a limited time period). Newsletters and webpages are increasingly more predominant with laser tag centers as operators are becoming more tech-savvy throughout the world.
Social networking sites such as Facebook and Twitter have also had a tremendous impact on how facilities try to market their attractions and services. It's rare to find a location that doesn't have a Facebook account even before their facility web page is even active.
Other incentive programs like Groupon have taken effect though many facilities have had mixed success with such programs.
The industry is broken down into several categories, such as Stand-Alones (where laser tag is the primary and probably the only main attraction), Family Entertainment Centers (FEC's), Bowling Entertainment Centers (BEC's), Skating Facilities, and other categories where laser tag is generally a simple and smaller revenue producer compared to other attractions.
It is recommended that Stand Alone facilities needs to be placed in a well-traveled part of an urban area that has a base population of 200,000 - 250,000 people. Other characteristics of successful centers include:
1) A male population base of 45% or greater.
2) A population base of individuals in the 5 - 29 year old range of 29.8% or greater.
3) An income base of $25,000 and greater of 69.4% of the population.
4) An education base of a high school diploma or greater education in adults 25 years old and older of 81.3% or greater.
As with all generalizations, there are centers in the United States that does not meet all of these criteria, but, the most successful centers share these factors.
Attraction level products are added to existing facilities that are either high-traffic or possess high-traffic capabilities. Skating centers, Bowling centers, FEC s are all high-traffic areas that have a captured market. Geographical and marketing considerations are already factored into the decision to purchase a laser tag system.
Adding a laser tag attraction is generally not based on local market population or income levels as this has already been established by the principal facility. Add ing laser tag is also done normally with a strict budget in mind. This is due to the operator not wishing to spend more than they feel is necessary to generate a secondary source of revenue.
The industry average for gross return of investment is 12 - 18 months. This includes debt retirement. The average net profit for a center is 20% after debt retirement. Alternative revenue sources for a laser tag facility can include concessions, memberships, merchandise, arcade, redemption, and other attractions.
Over the past several years, the industry has seen a significant decline in stand alone laser tag operations coming into the industry and a huge jump in facilities with 3 or more attractions (Family Entertainment Centers/FEC's).
Another trend that Zone Laser Tag is noticing are more FEC’s (existing or becoming) adding laser tag as an attraction to their new or existing facilities. This will be seen as an additional revenue generator to gather a greater capture rate. Laser tag is an activity than can truly appeal to the whole family unlike roller coasters, bumper boats, or go-karts.
One market that is exploding with laser tag in the recent years is the bowling industry adding laser tag as a staple attraction to existing or new facilities. The level of success found by many corporate and mom-and-pop operators is proving laser tag to be a fitting companion for many locations that want to offer more than just bowling to their facilities.
The success rate in the United States is still respectable maintaining the industry average of nearly 60% of all facilities worldwide.
Operators understand the quality staff; quality marketing; quality equipment; and an overall WOW! - themed environments are all essential to maximizing every possible dollar from the guest and ensuring a long-term profitable operation.