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White Hutchinson Leisure & Learning Group, Kansas City, MO, USA

Are LBEs kidding themselves about their venue's revenue growth?

We are hearing reports from many of our clients and from many public location-based entertainment (LBE) companies that their revenues have increased post-pandemic. They may well be kidding themselves since there has been substantial post-pandemic inflation. Their revenues will have had to have increased more than inflation to have grown. Otherwise, they've experienced decreased revenues when factoring in inflation.

From February 2020 to June 2024, we've seen the following inflation increases in LBE-related categories:

• Overall consumer prices (CPI) - 21%
• Food away from home - 27%
• Admission to movie theaters and concerts - 19%

As a result, if an LBE's revenues haven't increased by at least 21% since February 2020, its revenues have actually declined. It takes $121 in revenue today to equal the value of $100 in revenue pre-pandemic February 2020. The same is true with profits. If profits haven't increased at least 21% post-pandemic, the LBE has declining profitability. Today, many LBEs think their revenues and profits have improved when, in fact, they have declined.

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