2018 February Beyond Bowling

WINTER 2018

INTRO

According to George he late, great management thinker, W. Edwards Deming, said “It is not necessary to change. Survival is not mandatory.” There is no business where those words should resonate more than in the world of bowling and BECs. We think about this all the time and for good reason: it is how you thrive, much less survive, while operating an out-ofhome entertainment business.

This edition of IBI and Beyond Bowling features several examples of change in action. The cover story on Wild Island and Coconut Bowl and our Beyond Bowling feature story on Jamie Brooks and Butch Warren’s remodel of JB’s Allen Bowl is another. My interview of Holly Hampton, the BayTek games executive and first woman president of the American Amusement Machine Association (AAMA) continues this theme.

Howard McAuliffe joins us this month, having penned the Amusement Expo preview article. Amusement Expo is the trade show produced by AAMA and AMOA and co-located with the laser tag convention and the bulk vending show in Las Vegas February 28 through March 2. In recent years, AAMA has gone beyond a manufacturer’s association and is focused on changing

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their role in the industry to be more relevant to the growing FEC sector, of which bowling entertainment is a big part.

In my FEC-operating days we used to conduct change audits a couple of times a year, certainly during our budgeting process. We’d get our management teams together and explore ways to keep that fixed, local audience coming back.

New games and attractions are part of that for sure but there are other ways, like staging events and promotions, or even simply rearranging the furniture to keep your guests engaged.

We hope you’ll find some tools to help you in this edition. Enjoy!

George McAuliffe Principal, Pinnacle Entertainment Group

TRADE SHOW PREVIEW

Beautiful Synergy Amusement Expo is the place where FECs come to see the possibilities.

By Howard McAuliffe

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musement Expo, the spring gathering of the amusement industry, will be a transformed show which is far more exciting, cutting edge, and broadly focused than in years past. This show is put on by the American Amusement Machine Association (AAMA), the Amusement and Music Operators Association (AMOA), the Laser Tag Convention, and the National Bulk Vendors Association (NBVA.) These are groups traditional bowling centers have significant exposure to as businesses that provide games, bulk vending racks, and juke boxes in traditional bowling centers. However, much like the bowling business, the amusement industry is expanding their entertainment offering, including in some cases the addition of bowling. The bowling industry and the amusement industry have begun to blend together into some of the most exciting, fastest growing, and profitable forms of out-of-home entertainment.

A FEW EXTRA DOLLARS VS A POWERFUL ATTRACTION There are two typical business models in the amusement industry: 1.Put machines in the path of human traffic and try to get an additional spend out of those customers.

EDUCATION IS A COMPETITIVE ADVANTAGE

2.Create an amusement attraction that draws customers to a location.

Modern society moves fast, and consumers demand new experiences. Learning how to meet this demand is essential to staying relevant in the increasingly competitive out-of-home

There is a place for both models in the market. However, 36

there is a very different mindset in terms of level of investment in both time and dollars. Putting together a typical traditional bowling center game room may cost $50,000, while a modern redemption game room in a BEC may cost closer to $500,000. Interestingly, these two models also parallel in many ways the bowling center business.

In the past, bowling was the only attraction needed — leagues and serious bowlers came to the center to bowl. If they played a few games, ate at the snack bar, threw a few dollars in the juke box, that was gravy. Bowling was far and away the attraction to get customers in the door and finding a local operator to provide the games, juke box, and bulk vending was a good way to earn a few extra dollars.

However, in most centers today, bowling is not the only attraction — leagues are a diminishing portion of the revenue and casual bowlers, while they love bowling, want more than just bowling for their entertainment dollar. Fortunately for progressive bowling proprietors and operators, the new FEC model improves the casual bowling experience. This includes modernizing the bowling elements, adding an arcade and other attractions, as well as upgrading food and beverage. Bowling has been a primary driver of the expansion of this new hybrid model. Amusement Expo, particularly the education sessions, will be a good place to learn about the array of entertainment options in the market, as well as a place for vendors to meet new bowling operators from outside the traditional bowling industry.

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TRADE SHOW PREVIEW entertainment industry. Amusement Expo expanded the education sessions to focus on a broader array of topics, including general business development, operations, virtual reality, BECs, in addition to typical FEC and street operator-focused sessions. “We’ve transformed the entire program going from 12 sessions on two tracks last year to 25 sessions on five tracks this year. With so much relevant and compelling content, my one recommendation to attendees is to bring along additional team members,” said Pete Gustafson, executive vice president of AAMA. The education program is on the Tuesday before the show opens, which allows attendees to focus on education before hitting the show floor on Wednesday and Thursday. One key aspect of the entertainment business is introducing change over time. The educational sessions at Amusement Expo are great places to learn about new attractions, operational and promotional ideas, and most importantly, networking. There will be two sessions focused on bowling and amusements, “Adding Bowling to Traditional FECs: The Opportunity, Economics, and Challenges,” and, “The Bowling Transformation: Bowling, Amusements, and YOU!” The first session focuses on traditional FECs interested in adding bowling, and the second is more focused on traditional bowling centers adding entertainment Pete Gustafson and working with operators.

VIRTUAL REALITY AND AUGMENTED REALITY This year, virtual reality (VR) and augmented reality (AR) are some of the hottest new attractions in global consumer electronics, as well as the amusement industry. Amusement Expo is a great place to learn more about this exciting sub-industry. VR and AR have been in existence for decades. There have been various attempts to bring VR to market and most have failed. However, in the last few years major corporations, like Google, Microsoft, and HTC, have been investing billions of dollars in this technology for the consumer market. There have also been several models for the out-of-home entertainment industry. Until this year, the systems for out-of-home entertainment have either been homemade versions based on retail systems or very high tech systems that are prohibitively expensive for most facilities, often $300,000 or more. This year we are starting to see reasonably priced virtual reality options in the $50,0000 to $100,000 range which can be a profitable model.

Some of these models will be available to see and play at the show, including the Halogate system from Creative Works. This year is the first year there will be a VR pavilion available for any vendor interested in displaying virtual reality products or systems.

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industries is beautiful synergy which is fueling the growth in both industries. Amusement Expo in Las Vegas is a great place to learn about the entertainment options available in the market. ❖

VIRTUAL REALITY EDUCATIONAL SESSIONS Tuesday, February 27, 9:15 a.m. - 10:15 a.m.

Introduction: Virtual Reality - History and Trends of Consumer and *LBE VR Room: The Westgate Hotel, Pavilion 4

Tuesday, February 27, 10:30 a.m. - 11:30 a.m.

SWOT Analysis for the LBE Market Room: The Westgate Hotel, Pavilion 4

Tuesday, February 27, 12:45 p.m. - 1:30 p.m.

Moderated Panel: Marketing and Positioning your VR Attraction for Maximum Reach and ROI Room: The Westgate Hotel, Pavilion 4

Tuesday, February 27, 1:45 p.m. - 2:45 p.m.

Moderated Panel: Why and How VR Attractions Require a Different Operations Mindset Room: The Westgate Hotel, Pavilion 4

Tuesday February 27, 3:00 p.m. - 4:00 p.m.

How to Select the Right Content and Equipment for your Audience Room: The Westgate Hotel, Pavilion 4

Tuesday, February 27, 4:15 p.m. - 5:15 p.m.

Thinking Outside the Box Room: The Westgate Hotel, Pavilion 4 * Location Based Entertainment.

Howard McAuliffe is vice president of Pinnacle Entertainment Group. Pinnacle Entertainment Group has conceived, developed, and operated family entertainment businesses in every size and budget, and integrated in to many other business as both corporate executives and entrepreneurs. He can be reached at howardmc@grouppinnacle.com.

FEATURE

Pin Strikes: Where Every Guest is Honored The Patel brothers’ passion for customer service has grown their FEC business.

By Robert Sax

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o Indian-American entrepreneur Bob Patel, great customer service is more than a smart business practice; it’s a way of life.

Hospitality and the welcoming of guests is an integral part of Indian culture, based upon the ancient Hindu scriptural verse, ‘Atithidevo Bhava,’ or translated, ‘be one for whom the guest is equivalent to God.’ “In our culture we always welcome any guest; it doesn’t matter what race, color or religion,” says Patel. “This is what we tell our team.”

Family entertainment centers were not the first of the Patels’ business enterprises.

Bob and his brother Bill came to America from India in 1986 and bought an independent hotel in Georgia. By 2002, the Patels had parlayed that hotel into a thriving portfolio of franchised hostelries and started a construction company that has built more

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than 25 hotels and commercial buildings in the Southeast.

Then a guest Bob remembers only as “Mike” introduced him to 10-pin bowling. Mike was the general manager of a bowling entertainment center being built near the hotel, and he showed Patel around the place.

Patel was attracted to bowling as a form of entertainment and a potential business opportunity. He thought “Okay, what the heck, think about it,” not knowing that bowling would eventually become another part of his family’s growing business empire.

Bob and Bill took a couple of years The Patel brothers. to do their due diligence on the bowling and family entertainment business. They attended Bowl Expo, took courses offered by the BPAA, and visited as many bowling centers as they could. They saw that the traditional bowling centers were struggling to survive

FEATURE as league play declined. The proprietors didn’t seem to know how to attract and serve customers who weren’t regular bowlers.

“When we visited, we noticed that most of the bowling alleys had no customer service aspect or quality control,” says Bob. “We learned from our hospitality business that customer service is the key to success. No matter what, [in] any situation, we are to keep the customers happy.”

Meanwhile the nascent FECs, which appealed to a broader audience, were busier than the old-fashioned alleys. “The one thing about an FEC is you’re not targeting only one area or one type of customer,” says Bob. “You are targeting kids to seniors.

More customers, more growth.”

With their construction background, the Patels decided to build their first FEC from the ground up, selecting a location in Stockbridge, GA, that was close to their residences. They consulted Brunswick on the bowling elements, working first with Kurt Harz, vice president of sales for Brunswick Capital Group and then with team member Eric Lindfors. “Brunswick helped us design the building and [advised] us on whether this layout would be better or that layout would better,” recalls Bob. “They’re very good, smart guys,” says Lindfors of the Patels. “They [have] very friendly and gregarious personalities.

The reason for their success is they are genuine numbers guys but they also understand that you have to spend some money to be successful as well.”

The Patels came into the bowling business as it was entering a period of change. For decades bowling centers had been run primarily as family businesses that were passed on from generation to generation. But in the late 1990s, Kurt Harz noticed an influx of people coming from different industries and bringing a solid business background with them.

“The Patels had great business discipline coming from the hotel industry and a good understanding of operations and what it is like to market to a consumer,” recalls Harz. “Bob was really at the forefront of that emerging business

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FEATURE model back then; the bowling entertainment centers. He was one of the early adopters of that business model.”

As hotel owners, the Patels knew the importance of good food and beverage. They sensed that casual bowling customers would want more than the typical snack bar menu of hot dogs, pizza, sodas and popcorn. “Ours would have more variety,” says Bob. “We started out with a full-service restaurant with a full bar.”

Mike Auger of Trifecta Management consulted with the Patels on their food and beverage operation. “Bob was adamant about quality control. He wanted a compelling food product so that people would want to eat something while they were there,” says Auger. “Our goal was to create a more dynamic menu than you would see at a traditional bowling center.” It’s common practice now, but it wasn’t then.

Bob wanted his customers to be able to dine as part of the bowling experience or just hang out and have a drink, so he allocated significant square footage to the bar areas. That was unusual at the time, when other proprietors might expand their food and beverage operation by simply adding laneside service. “They just changed their service style,” says Auger, “Bob came in and wanted to have a bar separate from the rest of the concourse that creates its own environment.”

With Bill running the back office, Bob as the face of the business, and an experienced manager on the team, they opened their first Pin Strikes in 2007.

It had 28 lanes of bowling, laser tag, bumper cars and an arcade. To their surprise, business was so good that the parking lot was full and the wait time for bowling was three hours. “We were not expecting it to be that busy,” says Bob. “We learned from day one a lot of things.”

Bob also wasn’t shy about getting involved in industry networking and professional development. When Kurt Harz and Chris Albano of Stars and Strikes launched a forum of Brunswick customers who operated the newstyled FECs, Bob was one of the first to join. “Bob really was one of the charter members of the group and really helped drive its growth,” says Harz.

The Brunswick group meets twice a year to discuss best practices and help each other out, and is composed of more than 20 operators from around the country. The annual F2FEC conference is another industry forum that the Patels

participate in to keep up on trends and make new connections. “We’ve been there for three years,” says Bob. Once their original Pin Strikes was established, the Patels decided to add a second center in Georgia. They had planned to open in 2008, but the downturn of the economy and the subsequent retreat of their bank from lending put an end to the deal. They persisted, found a new lender and in

2010 opened their second location in a converted Home Depot store in Chattanooga, TN. In 2016 they added a third location in Macon, GA. The Patels say that business is good at all three Pin Strikes. While there are no immediate plans to add additional locations, Bob says they will consider it “if the right opportunity comes.”

Given their passion for hospitality and talent for finding locations where there is consumer demand, it’s clear that the Patels will be spreading their brand of family fun and hospitality to more and more people in the years to come. ❖

Robert Sax is a writer and PR consultant in Los Angeles. He grew up in Toronto, Canada, the home of five-pin bowling.

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INTERESTING INTERVIEW

Innovating President A few minutes with Holly Hampton, Director of Innovation at Bay Tek Games and President of the American Amusement Machine Association (AAMA).

By George McAuliffe Holly Hampton has long been a familiar face in the Bay Tek booth and recognized as an industry leader. Most recently her leadership was tapped by AAMA when she became that organization’s president in October. We can celebrate this long overdue, industry-first female president of the organization. We recently spoke with Holly exploring her views on the business and her role in leading it.

1. How did you get your start in the business?

I started as a summer intern at Bay Tek. Although I was a good student in high school, I didn’t go right to college. I didn’t really like school and there were no college graduates in my family to model. So I joined the Army Reserve. I loved it. It brought strong values and structure. I also took a job working for my father at a paper mill. That work confirmed my respect and love for factory workers but also inspired me to go to college. After switching majors from education to business, I was fortunate to land an internship at Bay Tek. After two summers at Bay Tek and armed with a marketing degree and diploma, I was offered a full time position. That was seventeen years ago.

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2. What’s kept you in the business through the years?

There is something innately special about the Bay Tek culture and family of workers. It hadn’t really hit me until recently that we take for granted the true reason: we get to create special things, with an end product being joy.

At Bay Tek we are designing, building and delivering happiness to our customers around the globe. That’s pretty special, and it means more to me as the years go by.

3. Tell us about your company.

Bay Tek is truly a special place. Larry Treankler and his family are committed to their employees as family — that is Holly Hampton our culture. We extend that care to our employees’ families, our customers, distributors and their customers. For years the company has shared 10% of its profits with community organizations as well as 10% of profits with, all employees equally. That’s amounted to millions and millions of dollars dedicated to improving people’s lives.

Like in any family we may have occasional tough conversations, conflicting ideas and passions, but it always comes from a foundation of love. The Treanklers have laid the foundation for the Bay Tek team it is about more than making a living, and we believe that results in quality products.

INTERESTING INTERVIEW 4. When I think about Bay Tek products, words like quality and excellence jump to mind. How do you deliver that so consistently?

I really do think it comes back to those fundamental values, it takes every single employee on our team to deliver that. Once that gets internalized, and painting that picture of how our customers rely on us, all of us are working from the same script and committed to doing it right. It’s also being committed to innovation, listening to customers, constantly trying to understand the market and develop products that matter.

5. Let’s talk about your AAMA role. You’ve been part of the team leading that organization for years now, on the steering committee and board of directors. How is being president different?

It’s a little bit different. I may have underestimated the responsibility that comes with the president’s role. That came home to me this week during planning and budget meetings.

The honeymoon stage is over. Now we need to ensure the organization continues to move onward and upward.

6. What do you hope to accomplish/contribute?

We’re designed as humans to be creatures of habit. I want to challenge our staff, our board, committees and members to embrace change. The old definition of insanity is true: doing the same thing over and over and expecting a different outcome. In today’s world people don’t think that way. We’ll be encouraging open thinking and change. We started our FEC initiative three years ago to promote AAMA as a home for FEC members. To be that home for FECs, we need to continue to strengthen our programs for them and we will continue to do that. Above all, we want AAMA to be relevant going forward.

We have a responsibility for the greater good of our membership and that requires continuous improvement.

Change is hard but it’s good.

7. We are in something of a golden age as an industry.

Why do you think that is?

I think we’re benefitting from a bit of a backlash. Our society is immersed in a digital movement. Everybody is connected. Wifi is everywhere. On the Today Show they said the average age an American kid gets a cellphone is 10. So there’s been this huge digital growth, which is great, but there are downfalls to too much screen time. I think people are looking for alternatives, especially those that allow them to

connect socially. Our industry provides those venues and social experiences.

8. Can you boil it down to the top three factors for your success?

I’d say first is heart and passion. When you care about what you’re doing that provides drive. Life’s too short to go to work if you don’t have passion. Second is honesty and ethics. People want to do business with trustworthy people who do what they say they will do. Third, don’t take yourself too seriously. We all will mess up. Having grace through that, having fun and enjoying the people you work with.

9. Your vision for the next five years?

It’s kind of hard to see more consolidation at the manufacturer, distributor and operator level but that may continue to happen. I’m curious to see what distribution looks like in the next five years. I think there’s a good chance we’ll hit location saturation in that time frame. If we do we’ll then need to continue to supply products and services to stay relevant to the patrons playing our games.

10. Any other wisdom you care to share with our readers?

I’d just reiterate one thing: let’s not take for granted the business that we’re in. We all have a relationship with our industry. Relationships can be easy to take for granted. The joy we deliver and even the challenges we face around that makes it special to be part of that. ❖ So true! Thanks, Holly and thanks for your service to our industry.

George McAuliffe has operated family entertainment centers from 2,000 to 150,000 square feet as a corporate executive and entrepreneur. As a consultant he has helped hundreds of clients add or improve redemption game rooms and FEC attractions. He is currently the principal of Pinnacle Entertainment Group whose clients include Embed, Redemption Plus and Shaffer Distributing Company. He writes for RePlay and International Bowling Industry magazines and speaks at FEC industry conferences.

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SHOWCASE

REDEMPTION DISTRIBUTOR

The Shaffer Distributing Company, family owned since 1929, represents virtually every manufacturer of video and redemption games in the amusement game industry.

Shaffer is the one-stop family entertainment center distributor providing unparalleled consultation, game room design, logistical support, unmatched installation, training and follow up, and parts and service support. Building strong relationships, mutual trust, and carefully listening to the needs of its customers are essential to the core values of Shaffer. There are full-service offices in Columbus, OH, Cleveland, OH, Detroit, MI, Indianapolis, MN, and St. Louis, MO, serving the continental U.S., Hawaii, and Canada. Please contact George Speakman or Bill Kraft at (800) 282-0194.

MARKETING STRATEGIES

Growing your business is important to your success, but developing programs and marketing material to help you attract new customers or re-engage existing ones takes longer than expected or more time than you have. Until now!

QubicaAMF’s QuickStart Programs were designed for the busy proprietor or manager who needs to execute new programs without spending months developing the concept or creating marketing material to make it successful. Our programs have been researched, tested, and are professionally designed to give great results…quickly! Learn more at QubicaAMF.com.

VERSATILE-FITTING LANES

Epicenter™ from Brunswick Bowling inspires more people to visit, stay longer, and spend more by bringing authentic bowling—not mini-bowling or an arcadelike version—to spaces that can’t accommodate traditional lanes. Epicenter’s reduced-length lanes and StringPin pinsetter make it all possible. Keep guests

engaged longer and encourage more food and beverage spending by offering a game that uses full-size balls and pins for an authentic game everyone can enjoy. For more information: www.brunswickbowling.com/build-a-center/epicenter.

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REDEMPTION PRODUCT TURNOVER

Redemption Plus’ Kit of the Month program is just like any other subscription box program. You sign up and receive your new, high-quality plus kit at the start of the month, automatically. It’s hassle-free. Without a Kit of the Month, you risk having stale product in your cranes for months at a time. This discourages guests, especially repeat guests, from playing your crane games, which hurts your profitability. You don’t pay for the items until they ship, and you can cancel at any time. Stop by Amusement Expo booth #743, or visit redemptionplus.com to learn more.

PRODUCTS FOR THE OLDER CROWD

Adult players are increasingly defining amusement play at bowling centers nationally, and BMI Merchandise has a wide range of product for this important bowling customer. Centers catering to the Gen Z crowd, defined as those ages 18-22, are featuring items such as BMI’s 4-piece stemless wine glass set. BMI’s product range is the sweet spot for centers seeking a wider player range, especially centers that serve adult beverages, feature live music, and are located in a more urban area. Other winning prizes at the nation’s most successful centers include the Giant Masks and Sega Classic Game Console. For a complete look at the most extensive range of prizes that players of all ages want to win, go to bmimerchandise.com or call (800) 272-6375.