We've been tracking and reporting on the recovery of location-based entertainment spending in the post-pandemic era. The U.S. Federal Government does an excellent job of tracking consumer spending. The U.S. Department of Commerce's Bureau of Economic Analysis (BEA) collects data from businesses on their revenues every quarter. The BEA has released data for the 2nd quarter of 2023.
One category of consumer spending the BEA tracks is location-based entertainment, campgrounds, and related recreational services. The category includes location-based entertainment (LBE), such as amusement parks and family entertainment centers (FECs), but excludes spending at motion picture theaters, live entertainment venues, and spectator sports.
The BEA data shows that spending for LBEs, campgrounds, and related recreation venues is recovering from its low pandemic level in the second quarter of 2020 but still has a way to go to match pre-pandemic spending in the last quarter of 2019. Second-quarter 2023 average household spending was still over one-quarter lower (-24%) than in the pre-pandemic 4th quarter of 2019.
One reason for this is that consumers have decreased the percentage of spending on location-based entertainment, campgrounds, and related recreational services from 0.48% of all their spending in the last quarter of 2019 to 0.35% in the 2 nd quarter of this year.
Contrary to the above, many of our LBE clients report revenues equal to or exceeding pre-pandemic levels. However, what they are reporting is not apples-to-apples with the BEA data. The BEA data in the above chart is in inflation-adjusted dollars. For an LBE to be doing the same revenue as in the 4 th quarter of 2019, it would have to have 18% more revenue to be even based on inflation. Due to inflation, it takes 118 dollars in the 2 nd quarter of this year to equal the buying power of $100 in the 4 th quarter of 2019. Any LBE not generating at least 18% more revenue today than in the last quarter of 2019 is losing ground.
We can only speculate why spending for location-based entertainment, campgrounds, and related recreational services has not recovered to pre-pandemic levels. It may be that pandemic-born at-home digital entertainment habits die hard, just like ordering take-out or going through the drive-thru for restaurants. A net of one-quarter of adults (+11 dine more minus -36%dine less) report dining out less than pre-pandemic.
The habits of all the entertainment we learned to enjoy at home during the pandemic may still be influencing our leisure time and spending.
Inflation is a factor slowing the growth of entertainment spending to pre-pandemic levels. Since the first of the year, the percentage of consumers who report cutting entertainment spending due to rising prices has increased.