Let me expand a little bit. Bowling, as a business, is in a transition. As a small business (and most bowling centers are still family owned or owned in small groups), bowling centers are LESS likely to fail than most other small businesses.
What makes bowling so attractive as a business is the league structure that underlies bowling. One estimate indicates that approximately 40% of an average center's revenues come from guaranteed league contracts. This base of revenue allows proprietors to seek out additional, higher margin business because it provides a stable and predictable cash flow -- and that cash flow is the lifeblood of small businesses especially. Leagues also have the advantage of only requiring one "sell" to get a relatively long term financial commitment. In essence, the league base is a base with lower selling costs and stable income. That makes the base business very attractive.
When you can add other "entertainment" options -- games, lazer tag, pizza, etc., to the "league" base, you have the opportunity to maximize open bowling and "event" useage. These activities have higher "revenue" per unit but also higher costs in time and selling (costs which, because they are considered overhead are partially paid for by league revenues, thus, to some degree, artificially inflating the profitability of event and open bowling). Further, by having the leagues cover most if not all basic expenses, each additional dollar is high value -- the marginal profits of additional business are necessarily greater because the base costs are paid for through the leagues. But the lineage for the leagues is generally lower than lineage for a similar reserved group and has not tended to go up with inflation. So increased prices for lineage have not been felt as much by leagues, probably to the detriment of league bowling in the eyes of the accountants.
Bowling also has other advantages. Despite what you might think, the average income of "regular" or repeat bowling customers is now about 20% above the national average. That's right, 20%. 60% of bowlers come from "professional" businesses -- sales, management, office, etc. and over 60% own their homes.
So why is bowling supposed to "shrink." Well, it has to do with the make-up of the customer base. As the population has expanded, more people bowl at least once a year. The percentage of the populace that bowls several times a year has gone down somewhat however, partially because of the decline of leagues and partially because of other available entertainment choices. So while nominally the businesses revenues have been growing or staying stable because of an increasing population and price increases for open and event play (an unheralded part of the increase in bowling's revenue), bowling as an industry has, almost certainly hit and begun the bounce down from the ceiling. Centers which do not cultivate leagues and try to get young people into leagues will find that the leagues they have are drying up. Open bowling will decline, largely because it has been something of a fad. It will, as all such fads, lose luster. Thus, despite its very good demographics, increased youth interest and a superior business model (leagues plus open) have problems as less investment and interest is placed on creating the base of customers that leagues provide. Remember, league bowlers are often "open" bowlers, who bring their families to the game and help prop up the rest of the business.
Further, leagues create community -- and thus "pressure" to return and remain a part of the community and to abide by its norms. The more personalized service is -- the more repeat customers are part of the community, the more the community patronizes the establishment. If you insist on an open community (good and fun handicap leagues) the whole structure can be self sustaining. If, however, this "community" function is overlooked or downplayed, the bowling center becomes just another lazer tag or bar, albeit with large capital requirements.
That is why the industry is shrinking. In my opinion.
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"I have come to the conclusion that one useless man is a disgrace, two or more can be called a law firm, and three or more can be called CONGRESS."
Edited on 5/5/2008 8:15 PM
