In May, JLL released its 2023 Entertainment Report, which validates the idea that in a post-COVID environment, consumers really want to spend money on having fun. The report cited a statistic from the IBISWorld Forecast, which stated that Americans’ total recreation spending will grow by 10.2% in 2023.
Categorizing the top entertainment concepts that are expected to have new openings in the future, “Eatertainment” — which offers multiple games and caters to both the daytime family audience as well as the nighttime 21+ crowd — ranked highest, at 33.9%. This was followed by “Competitive Socializing” at 32.4%, which is categorized as a food and beverage concept that incorporates a single game activity, such as darts, and which tends to appeal solely to the 21+ audience. The next highest category was the “Trampoline Parks and Kid Zones” segment, at 21%, followed by “Virtual Reality” gaming concepts, frequently involving headsets, taking up the final 5% (the category of “Other” received 6.9 %).
Most of these entertainment brands prefer to be situated in a retail center filled with bars and restaurants, as well as other entertainment-themed concepts (i.e., escape rooms). Urban destinations sought after include areas with a tourist element or perhaps a sports stadium draw, as well as trendy up-and-coming neighborhoods with a good mix of residential, retail and office. In residential regions, the competitive socializing concepts do well in lifestyle centers and mixed-use developments, and second generation retail boxes in suburban neighborhoods are attractive to the trampoline park and kid zone tenants.
Even with these entertainment destinations trending right now, because so many of these concepts are considered “new,” landlords consider these types of tenants risky. When considering a lease deal for an entertainment concept, expect property owners to prioritize those brands that have a strong business plan, the support from a reputable private equity or venture capital group, and an executive team with a history of prior successes.
