How will the Location Based Entertainment industry look like in a post-pandemic world? Nobody has that figured out, especially that every country or region experiences the situation differently. So Stefan from Inowize VR, and Grant from Zone Laser Tag, sat down to talk about how the NZ entertainment market dealt with, and has rebounded from the COVID pandemic.
The reason New Zealand was in the focus, is not only because Grant runs several of his own entertainment centres in NZ, giving him hands on experience from there adaption strategies. It's also because New Zealand's swift government response has allowed New Zealand to be the first Covid free country, so hopefully can be an indication of what's to come for the rest of the world as we get the pandemic under control.
Watch the interview above, or read it below.
- Who are you Grant and what is Megazone about? How many locations are you operating right now? What of Attractions are there etc.?
I’m the owner of Megazone NZ, which is the NZ branch of the wider Zone Laser Tag Group, in which we have 15 stores with two more in the works, alas that used to be 16 but our Taurganga location didn’t make it through Covid. So what we do is provide local support/Repairs and all that good stuff for our sites here. Along with I’m also one of the direct owners of the Dunedin and hawkes bay venues.
In the Dunedin Centre we have a 54 vest Indoor Laser Tag, Redemption Arcade, VR, UV Mini Golf, Cafe, Bar, function spaces and a full fledged Retail Game Store with a webstore as well. plus, we’ve got portable inflates and Laser Tag/Archery Tag.
Hawkes Bay, we have Trampolines, Laser Tag and Arcade, with another attraction in the works
Across our NZ Group we have all sorts of other fun things, like Escape Rooms, Bumper Cars as well as the attractions we have in our Dunedin and Hawkes Bay stores of course.
Only other thing with me, is as well as running that NZ group I’m also head of sales and development for the wider zone group. So always a bit chaotic.
- Who is your main target audience? More of the locals, family groups etc. or tourists?
Really depends on the Store, but Dunedin is locals by far. With a lot of Students due to it being a university town. I’d say our target market for Dunedin is split into a few groups, due to the wide range of attractions we have, but for the entertainment side equal focus on youth Birthdays/Families, and young adults. We get a fair amount of worksdo/stagdos and all those fun things as well with our Bar. But our bread and butter is the kids and young students.
Retail is a real mix, as gamers can be any age. But gets a really good boost from being located within our Entertainment centre, so we always make sure to have good display of family games on display.
If you jump up north to our centres in Queenstown and Rotoura, they had a much more heavy amount of Tourist Customers so got hit much harder than us on reopening. For the rest of our stores, generally a lean to families/locals.
- When were you closed? For how long?
We were closed for Stage 4 and 3 In New Zealand, with Stage 4 being no staff on site at all, and within stage 3 we were allowed staff but not customers. Then back at it with limitations for awhile. Auckland, where we have 6 stores, alas has been restricted/closed down a couple of times again for a few days at a time due to minor covid case numbers, like less than 5 but lots for New Zealand!
In Dates, that was closed March 26, then got down to level 3 on April 27 which then allowed us to get our team back in, sorting for reopening and prepping for a few pivots with stage 2 reopening May 13. Which was good, but restrictions of 100px in the centre and reduced game activities, so hurt us in terms of max capacity.
Then Level 1 for NZ came, which is effectively normal operations June 9. Those wee Spikes were Auckland closed aug 12-30 then restricted, and still are. The Rest of NZ got back to level 2, which meant limited numbers in store, but open AUG 12-Sept21. Which fantastically for everyone but Auckland was just before our School Holidays. Auckland’s still at level 2.
- What are some of the things?
The Government did a lot to support us, particularly they made Landlords come to the table in terms of Rent, of which our Landlord gave us 30% off, which helped a good amount. Sure I would of liked more, but 30% is still more than none!
They also did a wage subsidy, that let us keep our team employed. Else would of been hard chats with all our staff members, and a lot of farewells. Even with that, still ended up with a reasonable net loss each month. But, luckily we had reserves, and rainy day funds to keep us alive.
- What were some of the first things you did when you reopened?
As soon as Stage 3 hit, we had the team in, prepping stock, cleaning everything. Putting posters/Stickers and all that jazz up to make sure the site was as safe as possible for reopening. During stage 4, we had brought Santizer towers, gloves and all the safety equipment we could and should provide.
A lot of the Stage 4 we spent planning with quick pivots of documents/resources to cloud based ones. And since we were paying our team, we got them building marketing lists of schools, writing blogs and anything useful that we could do remote.
With a large amount of effort put into our Retail side, as it was our hope we could get open for stage 3 with it. Alas we weren't allowed for stage 3, but the prep work made stage 2 all that bit easier.
While this was going on, the smarter people at Zone, led by our head of code Steve Sh and Greg Smith, developed automatic social distancing for our Laser tag Vests, so that was a massive help on reopening that we could tell people that our vests automatically enforce those rules. Initially that was big help with getting confidence back I think.
- How about cleaning and safety protocols?
In general, we dropped our vest numbers at most mazes, along with had to limit people in the centre.
Passed that we had sanitizer, gloves available and all that. We're not required to wear masks during anytime we are open to the public.
We increased our already good cleaning to be over the top, with staff on practically at all times, just wiping/cleaning etc. And did rotation of vests between games. So we would use one group, then another then another rotating the packs so had long time to clean.
We used the materials Zone provided, as in like floor stickers, posters, signs to place around the centre to make sure customer were as aware as possible of what we did, and what we want them to do.
- How did your audience react when your centers reopened?
First little bit was slow, a really big uptick in retail straight away, as after they stuck inside for so long they needed new games to play!
But within perhaps 2 weeks was a good trade again. Without our normal large groups due to the booking limits of no group larger than 10, then 50. Both of those effect us in terms of who we can have/book.
Luckily those all lift just before holidays, which led us to have an utterly amazing holiday.
- So all over the world, people are hesitant to walk in FEC’s and they are pretty careful at the cleanliness there. How is this working in New Zealand?
For like the first few weeks, people were more concerned, but very quickly that reduced to almost nothing. Like the point where we have to prompt/enforce people do the sign ins that were required etc and remind on distancing rules.
I think a big help is have our cleaning so visible in front of them.
- What was your pivoting strategy?
We spent the lock down planning, building marketing resources and software out to improve operations. As well as a massive focus on retail. To the point that we grew our resting stock by 3 fold, and increased and still increasing the Game Store Team up, to make it much stronger for future, and allow to grow more.
With software, we pivoted to using better booking management software at our stores, and expanding the functions of those, too add recurring memberships, more gift cards and better integrations so we can get more data in future.
One thing all of this has shown me is how essential data is, so really looking at continuing down this line with more, and better integrated software to control my centres.
- Now, a big question that everyone is probably asking, how are your locations right now, from a revenue standpoint, compared to last year?
For Dunedin, we are up on last year. With a very stong lead. Part of that was just before Covid (Great timing I know) we invested a lot in building our arcade to be bigger and better, so that has allowed for a large growth as well.
Sure the second QT was not good at all, apart from Government money, and a few people who kindly paid invoices in it, all the money was going the wrong way.
But QT3, we have a raise of just shy 40% over last year. Qt4 so far has been very strong as well, so all being well we hope for a good year close with strong sales to end of year + Retail for the holiday season.
But even excluding arcade, we have good growth. I think perhaps for our centre the lack of travel option helps us! I know not the same for all our NZ centres, but most of us are pretty close to last year totals.
- What’s the future then, what kinds of estimations would you have for the next year?
Seeing we lost the whole second Qtr, and part of first, I would hope better! Best case for us is AU and NZ enter a bubble, and then our audience and sales grow more and our tourist based stores will be happier! Plus I need a holiday…
But in terms of $, I think Dunedin and Hawkes Bay will hopefully benefit from our new Software, and build up we have done in the sites, and both get a good growth.
IN last months, we have been upgrading our counter/Cafe Area so hoping to leverage up our food and drinks side now down in Dunedin.
All our of our budget data though is thrown atm, from both covid and all the market changes and site changes. So is very hard to give you a number. All in all though very positive for our market in NZ, and happy that we already have 2 new stores scheduled to open NZ early 2021
What would be your advice for the FEC Operators in the corners of the world?
If you don’t have integrated online/Booking/POS software get some. Particularly one that allows for both giftcards, and recurring bookings that are both In my mind essential to grow your site. We use Roller POS at my own locations. This is very cheap to add and makes a real difference in terms of future profitability, as they work they also build a big customer database up to market too which has helped us a lot.
Then, if you don’t have a Laser Tag, add it, as it’s a great supporting attraction to others, Zone and I think some others would too offer strong leasing offers if you can’t spend the capital now .
Or if there is not a good game store right next to you, I would suggest add those two. Retail game store has quickly became an essential part of our business, with nearly 45% of gross revenue coming from it, sure it doesn’t have the same profit margin as there is a cost of sale per good, but still makes us a lot more than not having it!
But most of all, Just don't give up. What you, and we all do for our community is important. I think more than ever people have been shown the value of having a place you can gather with your family and friends and just relax. So keep your site open, sure it may not be the best right now, but when it’s over your community will thank you from there hearts, and wallets.