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Entertainment Social Arena #13 - Entertainment's Private Event
Investors should note that private event and party business in social entertainment venues now account for over 40% of revenue, driven by evolving consumer preferences from Millennials to Gen Z. Key sectors include mixed-use entertainment, socializing, and immersive experiences, with venues like Merlin, Gravity MAX, and Lucky Strike expanding their private hire offerings. The industry is experiencing growth through innovative concepts such as competitive socializing, immersive tech, and AI-driven booking support. Major investments and international expansion plans are underway, reflecting the sector’s profitability and strategic importance in diversifying revenue streams for established entertainment operators.
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This is the Entertainment Social Arena, issue number 13, Entertainment's Private Event by Kevin Williams. Party and private events, overlooked by many entrepreneurs, but a vital aspect of business for the established facility operator. The attracting and retaining private group hire and party business for locations in the entertainment business has grown as the social entertainment landscape has evolved. We take a plunge into these teeming waters. Beyond what some in the traditional amusement sector would consider the birthday party business, with balloons, cake, and streamers for the average Family Entertainment Center, FEC business, the level of sophistication needed in supporting private group hire and event business can represent over 40% of the venue's revenue generation in the social entertainment sector, especially considering the added complexity of numerous seasonal opportunities and the changing audience from millennials to Gen Zers. Earlier in the year, we were able to attend one of the UK's leading events and private hire conferences, an event our parent operation has found highly valuable over the years to chart the trends in the private event business as it pertains to the location-based entertainment sector. The London Christmas Party Show, LCPS 25, held in July, a companion to the London Summer Event Show held later in the year, is organized by story events, along with hotels, convention centres, and visitor attractions offering their space to corporate events. Entertainment venues have now started to make headway in augmenting their business to seed that valuable event business. For this report, we have broken down the sector represented during LCPS 25 into mixed-use entertainment, social entertainment, and immersive experiences. Exhibiting at the show, and one of those covering several options in the location-based entertainment scene, was Merlin Entertainments, and during the London show, Merlin Venues represented the bespoke event space operated for hire across their venues, such as London Dungeons, Sea Life, and Shrek's Adventure, to name three. Entertainment spaces seeing the hiring of their facilities as a crucial part of their business revenue. Sources speak of restructuring of the Merlin Entertainment operation towards maximizing their business units in the face of new competition. An obvious management restructuring after the loss of the LEGO Land Discovery Center operation in a recent sale back to Lego, mixed-use entertainment on the LCPS 25 show floor, and from this sector of the market, we had operations such as All-Star Lanes, looking to attract small groups up to 500 people to one of their four venues. We recently visited and reported on the Stratford City and White City Mall locations, and it was self-evident the interest in birthday and social group hires. Another exhibitor at the show was Hollywood Bowl, with over 80 locations and multiple London sites, including the O2 Arena site we visited. A visit that revealed to us the new social entertainment private hire component. They had added with their duckpin bowling, new social entertainment space comprising the social bowling space. Other bowling chains at the show included Roxy Bullroom, their multiple locations enjoying the boom in private events. Exhibiting at the London Show, one of the powerhouses of what we have defined as mixed-use leisure entertainment, MULE sector, is Gravity Max. The Gravity Entertainment-owned chain of four locations across the UK had in 2023 secured up to£30 million in funding to secure its national and international expansion plans. The operation was charted in the media as the fastest-growing leisure company in the UK, winning the 2021 Entertainment and Leisure Operator of the Year Award at the Global Retail and Leisure International Awards. The first Gravity Trampoline site opened in 2014 and expanded to some 19 international venues. Visiting the Stratford City Gravity Max location, the space comprised multiple elements for small, medium, and large private hire, including its own social entertainment space, the Hencken Sports Bar, covered in our recent report. The hospitality sector embracing the social entertainment opportunity, along with beer brands sponsoring sites. We have also seen hospitality venue chains pivoting into entertainment. At the LCPS 25 show, the pub chain brewdog promoted their venues, including their famous Waterloo site that includes duckpin bowling lanes. Able to be licensed for private party hire. Speaking of the wider bowling sector and the previous Bolero operation, rebranded to Lucky Strike Entertainment, revealed the health of their operation. The corporation's CEO reported in Q4 Earning Report, they had generated over$13.4 million in revenue for the period covered, total revenue growing by 6.1%, with reporting that food and beverage sales had risen across their operation by 2-5% for same-store sales. But overall, it was reported that same-store sales had declined by 4.1%, but had seen growth with July positive. It was reported they expected to see between 5% and 8% growth for the following year. This reflects the changing bowling and entertainment landscape as companies look to diversify and broaden their operation involvement. Lucky Strikes runs 55 venues, but has recently diversified away from their more traditional bowling amusement venues into full-blow FEC operations and water parks. This coming off the back of recent acquisitions such as two Bloomer FEC venues and Wet n Wild Emerald venue from Hurchand Group, previously owned by Palace Entertainment, back in July. Additional purchases of locations were revealed in the earnings report, towards a planned 100 venues for the end of next year. Social Entertainment. During the LCPS 25 show, the influence of competitive socializing venues on the marketing, promotion, and private hire market was obvious. One of the group of exhibitors from this sector on the show floor was Fairgame. The Fairground style social entertainment venue has started to expand its model. The venue in Canary Wharf offering a mix of carnival stall entertainment with cocktails and charable menu. Around the same time of promoting their current venue for Christmas and corporate private hire, the operation held a soft opening of their second venue. The Stinger Report was invited to the VIP soft opening. The venue is in the City of London in a cluster of social entertainment alongside the commerce and industry of the Square Mile, in a basement location below the F1 arcade flagship site. These venues just a stone's throw from the City of London Putshack venue. Heading further around, you would come across sandbox VR, swingers, and electric shuffle locations. London a crucible for competitive socializing and offering a target-rich environment for office executives looking to let their hair down in the latest social entertainment environments. Enter the open basement space, and this has been utilized well by the development team, offering a long bar and seating area before entering the Carnival Entertainment Space, building off the proven formula of the original space at Canary Wharf. An interesting development is that the team behind Fairgame has totally redeveloped the Carnival slash Midway games on offer. Keeping the unique drink holder and multiplayer capability, the company has gone for a new roster of 12 games. One of the newest additions being Beaky Finder, the venues take on the rubber duck catcher water game. Observations Within the shadow of St. Paul's Cathedral, the Midway and Social Entertainment Space offers the second offering of the Fairgame formula. While new additions include a VIP room area, other additions seem more questionable. With an actual amusement selection from China and one stern pinball table, new seating and placement of the food offering, and an increased investment in a themed bar expanse promoting the brand. Overall, some lessons seem to have been learned, while other questionable decisions have been made. Regarding the overall approach, we would give the latest venue a strong rating based on the new scoring process that the entertainment social arena will now apply to our venue reviews, thematization slash design, 7 out of 10. Entertainment slash socializing, 7 out of 10. Quality of hospitality, 6 out of 10. Value for money, 6 out of 10. Overall appeal, 7 out of 10. In taking their time in building on their momentum following the first Fairgame facility, this venue model is joined by the North of England fair play concept. Celebrating a Glasgow and Edinburgh opening, the chain announced the Newcastle venue that opened in August. Totally separate from Fairgame, but offering a similar fairground social entertainment venue approach, but designed to meet the operation's own interpretation of the space, with darts, skee ball, shooting gallery, and other fairground games supported with a cocktail bar and food menu. Returning to the LCPS-25 and the social entertainment element was represented for private hire with venues such as BAM Karaoke Box, with their 22 private rooms at the London facility, the operation running across Europe. The popularity of hospitality and karaoke is an element of the social mix finding favor with venues. We reported on the voice-themed karaoke that has been installed at the Stanford Gravity Max venue. Another entertainment space at the London show was Hijingo. The original social entertainment bingo concept offers a space that can accommodate 185 seated guests. Other exhibitors at the event from this sector included flukes at Big Penny Social, the social entertainment space promoting their vast 2000 capacity for private events. There was also the Ping Pong Social Entertainment Franchise Bounce, with three venues in London, each site able to accommodate 400 guests. Another LCPS 25 exhibitor was Clays. The Clay Pigeons Social Blasting and Mixing venue launched their latest London venue with a new Soho site. A full report on the launch of this venue and our main takeaway from the latest social entertainment shooting experience coming in a following report that will investigate the explosion in shooting social entertainment spaces permeating the market. One of the trail-blazing competitive socializing chains represented at LCPS25 Show was the suite of red engine operations. This including Electric Shuffle with its three London facility and Flight Club Social Darts with their four venues. They were offering at these venues support for up to 650 guests, with a dedicated private event package, the company looking at extensive group bookings to define their business. A business that was placed on a new trajectory with the announcement of securing£70 million of investment, combining an additional£10 million on top of their£60 million credit facility that was reported on in April. This new investment will go towards an increased rollout of new venues internationally, as well as developing both brands to stay competitive. One innovative puzzle game option uses location-based technology, exhibitor street hunt games, and immersive outdoor game, with groups up to 100 able to walk the streets collecting clues and solving puzzles against the clock in teams on the streets of the iconic city using their smartphone with a special app. Not the first geotagged treasure hunt style experience, but one that can be easily scaled as we see Fidgetal grow in popularity. We have recently reported on another operation that has announced new investment towards opening three new sites in the UK. Little Lion Entertainment was covered in our previous report, securing their funding from HSBC UK to visualize these plans. The Manchester Arena Arcade venue, run by the operation used for the Experience UK Conference, and it was revealed that Little Lion Entertainment see 40% of their business coming from private group higher business. This reflecting the importance of this in establishing your bottom line. The company also announcing plans for a flagship venue in Dubai dedicated to the Crystal Maze live experience, signing a 10-year international rights extension with Bana Jay, part of a UAE expansion plan, continuing the social offerings seen at LCPS 25 and regarding new social entertainment chains that are looking to expand their presence, and it was revealed that the F1 arcade franchise expansion, agreed with top racing Iberia, will see a debut in Madrid by 2027 of the first of their Spanish expansion, choosing this sector for their market growth in Western Europe. 2024 saw the conclusion of a$130 million investment round spearheaded by Cheney Capital, which backs various structures encompassing credit and corporate equity. This also comes as F1 Arcade looks to redress its pricing and play model, the operation announcing for the full season leveling up their sprint social Tuesday's package to draw repeat players onto the race sims in league competition. We have already reported on our attendance at the F-1BOX facility rollout and the implication this has on the sector. One of the social entertainment chains that was not at the conference was Swingers. The operation has expanded its social mini golf chain into the UAE and US markets, along with their London presence. Having received in 2023 some$40 million in investment to grow the chain, it was reported in September that Swingers has seen a dip in its revenue during the year moving to£36.4 million from last year's£43.3 million. This did not stop the operation from confirming they are focused on global expansion. With plans to open a new U.S. site in Boston for later in the year, following on from their Las Vegas casino opening, immersive experiences, the final aspect of the social entertainment offering regarding facility and corporate event hire. Much has been made of immersive entertainment, much more than a concert or live performance private hire. Immersive attractions such as ABBA Voyage have come to encapsulate the next phase of immersive concert experience, using specially created holograms to create a live audience performance from the supergroup. Operations such as Frameless have been presenting immersive exhibition that can also be hired out as corporate entertainment experiences. Speaking of events that depend on a tech and live actor immersive presentations, and we have seen The War of the World's Immersive Experience developed by Layered Reality, the company marrying VR with live actors and theatrical narrative. The company hoped to capture lightning in a bottle again with the newly launched Elvis Evolution experience, developed in collaboration between Elvis Presley Enterprises and Authentic Brands Group with Layered Reality, though this has received serious critical review. The Elvis Evolution, located at the London Excel Convention Center and their LDN hub for social entertainment, hoping to draw London's social entertainment audience to the Docklands. The national media ran numerous stories about audience disappointment with the experience days after the press event. Managing of expectations, with the developers having previously stated in January 2024 the use of holographic representation of the performance, only to pivot, taking the creative decision not to mimic Elvis's performances, instead using AI to upscale archive footage. We had attended the launch of this site and voiced concerns on managing expectations, the communication of the dropping of the holographic approach so popular with the previously launched ABBA Voyage. With a$175 million development budget, reported as the most expensive live music experience in history, the party and event sector had received some bad press following the Chocolate Factory and Mr. Beast events. One of the final aspects of the private and corporate hire sector is the investment needed in party planning and corporate hire executives as part of the management team driving a successful entertainment business. The selection of these venues for corporate events may be a mixture of attendance to an event like LCPS-25 and its international equivalent. But also, a lot of investment in corporate promotion of availability and packages is needed, along with good contacts in the locality. But now dealing with a digital native generation, this is an area that is, as with many things, seeing the application of AI. New smart algorithm apps are being fielded in the sector towards helping those searchers inquiring on web pages, looking for information on booking parties and how to help both the corporate and consumer booking process. It was recently revealed that CEC Entertainment has deployed ChuckBot across their website. This AI-powered app assistant offers a fun and friendly personality, answering questions on pricing and helping shape the best party package inquiries, specially personalized from the offered information. One of the unique deployments of AI, freeing staff from countless requests across their some 670 venues, but also an indication of how AI will alleviate part of the duties of the private event coordinator within the group. Also, other services offered within the corporate and private hire scene have started to embrace AI support. During LCPS 25, several of the photo booth and souvenir vendors promoted new applications. Photobot was one such exhibitor with their latest photo booth platforms for event and venue hire, now including social media support, unique photo customization and smart support for operator-less deployment. It is the application of these approaches that are marking out many of the traditional services now revitalized for the modern generation of party goers, from self-service and specialized drinks and food services to automated customer support. With the personalization of the guests' experience and offering unique corporate and party packages, the percentage of revenue this business will generate for entertainment venues will only increase if the market stays ahead of the curve. And as this is an industry based on revenue, how we generate this is based on the package we can offer.
