US FECs will need to hit revenues of at least 70 per cent of their revenues prior to the pandemic to pay their bills, according to American leisure and attractions specialist Randy White of White Hutchinson Leisure and Learning Group.
In a blog, White analysed the revenues required for Dave & Buster’s and CEC Entertainment to reach cash break-even after they reopened. He found that D&B needed to achieve 70 per cent of previous revenues and CEC 97 per cent.
He said that most small chain and independent FECs had higher proportional debt payments than D&B so their attendance and revenues would need to reach even higher than 70 per cent.
White concluded that currently (early June) the percentage of people ready to return to FECs was too low for the businesses to reach cash break-even in the first month or so after reopening. They would not be able to pay all of their on-going expenses and debt payments. This is further exacerbated by the restricted capacities and social distancing requirements in place.
A poll showed that most people would not be comfortable returning to some leisure based entertainments for six months or more. The factors that were impacting would-be guests’ willingness to visit locations again were several. The principal ones were that it would be too difficult to maintain social distancing (67 per cent) and other guests not social distancing (57 per cent).
