Bowlers Journal International - January 2008 - (Page 106) HALLMARKS BY WALLY HALL UNSETTLING NEWS AMID THE BREAKERS Despite revenue growth among MUBIG centers, not all was positive at the group's annual meeting. THE CLEAR BLUE SKIES, BRIGHT SUNSHINE, CALM SEAS and white sandy beaches on Grand Cayman Island in December for the annual MUBIG meeting contrasted sharply with the varied — and, in some cases, unsettling business reports — of the members of that group. The occasion was the annual general meeting of the Multi Unit Bowling Information Group, this time held at the beautiful Westin Casuarina Resort on Seven Mile Beach. The meeting normally would have been celebrating the fact that MUBIG centers had experienced a 5.6% gain in total revenues per lane for the year ended August 31, 2007. But the group's annual report showed that, while revenues climbed from $37,727 to $39,823, concern became centered around the disappointing results of the summer (June-August 2007) and a troubling, uncertain start to the 2008 bowling year. With 16 members (out of 27 that reported) advising that total June-August linage lagged behind last year, and 13 reporting that bowling revenue declined as well, concern over the new trends overshadowed the fact that 15 had experienced improved league linage above last year for the same period. The dry, hot summer was blamed for the disappointing open play results that most members had experienced. The summer results were not the only discouraging reports. More than 90% of lanes in MUBIG membership appear to have experienced decreases in open play levels, total linage and bowling revenue in October 2007 than in 2006. What might have caused this slippage? That's what the discussions addressed, the owners concerned that the business slump might continue. The general consensus was that October's generally pleasant weather was a major factor for the declines, along with gas price increases and the growing concerns by consumers about the uncertain economic outlook. Most of the attendees took comfort from the fact that business had appeared to bounce back over Thanksgiving. MUBIG’s reporting year runs from September 1 to August 31. It had been reported earlier this year that MUBIG centers had recorded total linage per lane that was ahead of the prior year at the 9-month mark. As a consequence of the disappointing 2007 performance in the June-August period, the results for the 12 months ended August 31, 2007 revealed total games per lane averaged 7,886 compared with 7,894 in 2006. The 8game decline means linage was essentially flat. 106 bowlers journal international JANUARY 2008 MUBIG total linage per lane per year for the past four years shows a steady performance: Season Games/Lane 2003-04 2004-05 2005-06 2006-07 7,780 7,784 7,894 7,886 During this period, league linage has declined by 4-5% per year, dropping from 3,591 games per lane per year to 3,141. At the same time, open play games have climbed each year from 4,189 games per lane to 4,745. All major revenue areas contributed to the 5.6% jump in total revenues in 2006-07 compared with 2005-06. Bowling grew by 3.8%, shoe rental 7.8%, food operations 15.5%, bars 2.4%, and other 6.6%. Food and soda beverage revenues continued to grow at a faster rate than all other segments, averaging 71 cents in revenue for every game bowled. However, bar revenues at 92.3 cents per game still exceeded snack bar sales both in revenue per game and revenue per lane per annum. Since 1998, the U.S. population has grown by 27,554,805 (13.9%), while USBC adult membership has declined by 1,333,772 (-36.8%). Adult bowlers per lane have dropped from 28 to 20. At the same time, youth age 5-17 in the United States has increased 2,939,577 (5.8%), with USBC youth membership falling by 136,459 (-31.1%). MUBIG’s league linage for the last 10 years shows a total decline of 32.48%, and mirrors the decline in USBC membership. Fortunately, open play has increased during the same period (by 29.8%), although annual total linage has declined by 422 games per lane or 5.1%. Price increases — plus increased revenues from non-bowling sources — have enabled total revenues per lane to grow in 10 years by 30% notwithstanding the linage decline. Per-lane bowling revenues for the MUBIC centers in the year ended August 31, 2007, was 53.4% of total revenues, down from 54.3% in 2006 and 55.7% in 2005. With a growing dependence on open play, the concern about the poor summer results is understandable as it occurred as expenses continue to inch upward. These concerns should not overshadow MUBIG's overall good performance for the year ended August 31, 2007. The summer of 2007 numbers, plus October, highlight the fact that weather can have a big negative influence on open play business. They underscore the importance of programs and promotions that motivate customers to pre-commit to their visit to the bowling center, such as creative open play events that require the customer to pre-book with a deposit. Despite the big drop in certified leagues and USBC bowlers over the last 20 years, it appears that the linage curve is flattening out with four consecutive years of stable total linage. The challenge now is for the industry to not only grow through revenue enhancements, but also to increase the number of games bowled. This may be difficult, but it can be done — and already has been — by some progressive operators. The remaining proprietors have to follow their lead if bowling is to see the linage curve climb upward again.
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