INDOOR PLAYGROUND BUSINESS PROFITS AND RETURNS
The value of the family entertainment center market reached $24.35 billion in 2020, with 36.1% of this industry revenue in North America alone. If this were not impressive enough, the projected market value of the family entertainment industry in 2030 is $69.55 billion.
Indoor playground profit margin and return vary based on location, business model, and overhead costs. Some businesses use family entertainment centers as their primary source of revenue. For other businesses, such as shopping malls and retail stores, indoor playgrounds are attractions that attract families. In these cases, a playground can bring more traffic and revenue to the business.
Overhead expenses are also an important factor in the profit and success of an indoor playground. If you plan to rent a space, the lease you sign will significantly impact your bottom line. Larger buildings cost more to rent, and the added space allows you to set up more attractions and accommodate more customers at once. With the added space, you can also rent out the room for birthday parties or fitness classes.
Commercial rental costs are higher in higher-profile areas. Families often find indoor playgrounds through word of mouth and internet research. Since visitors usually plan, visibility is not as important. Therefore, you can take advantage of lower rent costs in more remote locations.
When you plan to start an indoor playground business, research the local market to help determine the cost of an indoor playground business in your area.
HOW INDOOR PLAYGROUND OWNERS MAKE MONEY
Tickets
In the profitable indoor playground business, tickets are a basic source of income and can bring considerable revenue to the business. The number of visitors impacts ticket sales, so attracting a steady flow of customers through strategic initiatives is crucial.
In order to optimize revenue generation through tickets, indoor playground owners must carefully consider their pricing strategy and target audience to ensure a balance between affordability and profitability. Here are the key points to consider:
Optimize Ticket Pricing: Set competitive prices that align with the value provided to customers while maintaining the financial viability of your business.
Target the Right Audience: Tailor your marketing efforts towards families, schools, and community groups to attract a diverse range of visitors.
Utilize Off-Peak Hours: Promote special events and discounts during off-peak hours to encourage attendance and increase ticket sales.
Birthday Parties and Events
Parties and events are vital to an indoor playground’s profitability, providing the opportunity to offer unique and memorable experiences for children and families. Your indoor playground can stand out in a crowded market by creating specialized party packages for different themes and preferences. These celebrations not only bring in revenue but also foster lasting memories that keep customers coming back for more.
The high-margin nature of parties and events can significantly boost the overall profitability of your indoor playground businesses. Indoor playgrounds can tailor packages to suit budgets and preferences, catering to a range of customers, from intimate gatherings to elaborate celebrations. By offering additional services such as catering, decor, and entertainment, indoor playgrounds can maximize their revenue potential and create a unique experience for your customers.
Parties and events play a crucial role in building customer loyalty and encouraging repeat business. By providing exceptional service, personalized attention, and a seamless event planning process, indoor playground can leave a lasting impression on your customers. This positive experience not only leads to word-of-mouth recommendations but also increases the likelihood that customers will return to future events or regular sessions, thereby solidifying the profitability and long-term success of the business.
Parties and events serve as valuable marketing opportunities for indoor playgrounds, allowing them to showcase their facilities, services, and entertainment offerings to a loyal audience. By leveraging social media, word-of-mouth referrals, and partnerships with event-planning platforms, indoor playgrounds can expand their reach and attract new customers. In addition, hosting a public event or theme party can generate buzz and attract attention from your local community, further increasing your business’s visibility and profitability.
Open Play
If you have a very large facility that can accommodate many families or children at once, therefore you may have to focus on expanding the capacity of your indoor playground every day. Ways to accomplish this are by becoming a popular field trip destination, reaching out to moms groups with special rates, or getting involved in the homeschool community and creating a unique and educational experience for them when they visit. Most homeschool groups have a budget and allocate some of that budget to field trips and enrichment opportunities.
This open-play business model sounds like a very good option, but it does have some limitations. Unless you have very high capacity and are centrally located between large cities, this may put you at a risk of rapid closure.
The open-play model is often considered the most seasonal among other business models. Therefore, it may be difficult for you to generate regular income for your indoor playground business. Sure, there will be months of huge numbers, but there will also be months when you struggle to get customers in and are forced to find other sources of revenue to sustain your operation.
One approach we have seen successful is the indoor playground membership model. This means membership is the main focus, with some indoor playgrounds open to members only. With the indoor playground membership model, you only need to focus on serving these members during the low-revenue months. In New York City or any densely populated urban area, you will find several indoor playgrounds that successfully utilize this model. In this model, members pay a fixed monthly fee and adhere to a contract that protects against sudden cancellations.
As long as you have enough demographic and marketing efforts to maintain a constant flow of new members, you should definitely consider doing this to eliminate some of your business’s seasonality.
Retail
Offering appealing merchandise plays a vital role in increasing the revenue of your indoor playgrounds. Children and parents are easily attracted to themed toys, apparel, accessories, and other theme park derivatives. Carefully selected merchandise not only enhances the overall experience but also provides a profitable revenue stream for your indoor playground business.
By combining merchandise with your playground’s branding and theme, businesses can establish a cohesive and attractive product line that resonates with your target audience. This strategic approach not only drives sales but also improves your playground’s image and customer loyalty.
Additionally, merchandising provides your indoor playgrounds with a unique opportunity to spread your brand. Branded merchandise can be a tangible reminder of children’s enjoyable experiences at your playground, promoting return visits and fostering a sense of connection with the brand.
Food and Beverages
Businesses that focus on food and beverages and function primarily as restaurants can also be successful in this industry. For example, Lemon Tree in Los Angeles is a high-end restaurant with an indoor children’s playground.
They take pride in their food selections, which can be enjoyed whether you have kids or not. While they also host events and parties, they are known locally for their catering service and unique dining experience.
Drop-in Care and Educational Classes
At some indoor playgrounds, parents have the option of using a drop-in care service, which allows them to take care of some urgent work or want to have a break. Wiggle and Work in Los Angeles is a great example of this business model. In this playground, parents will feel like they have entered a co-working space with their children built in. As a venue operator, you can provide this drop-in care service for your members.
Additionally, some indoor playgrounds choose to incorporate accredited preschools into their facilities or focus primarily on educational classes. Some may even receive funding from state or federal educational programs. These facilities focus on one style of learning, such as the Montessori method.
Indoor playgrounds can diversify revenue streams and attract a broader customer base by incorporating drop-in care services and educational classes into your offerings. These services not only provide convenience for parents but also create valuable learning experiences for children and enhance the overall appeal of the indoor playground. With a well-planned curriculum and skilled coaches, indoor playgrounds can become not only a place for play but also a center for educational growth and development.
In conclusion, if managed properly, indoor playgrounds can indeed be a profitable business. Indoor playground owners can create a sustainable financial model by understanding revenue sources such as tickets, retail, and food and beverages and maximizing opportunities like parties and events and open competitions. Additionally, offering drop-in care and educational classes can attract a wider customer base and increase revenue potential. However, it is crucial to consider factors like location, competition, marketing strategies, and operational efficiency to ensure the profitability of your indoor playground. With the right combination of factors and a focus on providing a fun and safe environment for children, indoor playgrounds have the potential to thrive in the market and generate substantial returns for business owners.
Assuming you want to thrive in the kid zone indoor playground business, you have to differentiate yourself from your competitors as a venue operator. Therefore, if you really want to start an indoor playground business, you must determine the types of elements your park must have over other parks and how to provide unique experiences for your customers that compel them to come again and again.
One way to keep customers coming back excitedly and increase the level of fun is to offer adventure indoor play equipment. At Lebo Play, we have everything you plan to build a memorable and outstanding climbing indoor playground.
