Bowling centers are closing left and right. Seems as if you hear daily about another bowling center closing. In the S.F. bay area Palo Alto Bowl, Mel’s in Redwood City, Serra Bowl in Daly City and Cedar Lanes in Fresno have all closed recently.
Mel’s in Redwood City is closed, but the sign remains
I grew up in Bloomfield, Connecticut, and learned to bowl at Earl Anthony’s Bloomfield Bowl (shout out to Pat Bosco, the best bowling center manager I’ve ever known). I won my first PBA regional title at Paramus Bowl, beating the likes of Petraglia and Roth. I shot my first 300 at Fantasy Lanes in Upper Saddle River, NJ (my PBA 300 ring says “Fantasy” on it). Guess what? All are closed today and the properties redeveloped.
This is a tragedy to me. But the reality is that a few basic facts explain this phenomenon. Let’s start with a sign I saw recently at Sea Bowl in Pacifica, Ca.:
Bowling: $29.00 per hour
Billiards: $14.00 per hour
Bowling’s revenue per square foot math doesn’t work. Let’s talk real estate and revenue per square foot. A bowling center building requires at least 1,000 square feet per lane, so that a 32-lane center would need at least 32,000 square feet to operate. A billiard table takes up about 100 square feet. According to the Sea Bowl sign above, the bowling lane would generate about 2.9 cents per square foot per hour, while the billiard table would generate about 14 cents per square foot per hour. The billiard table nets nearly 5 times the revenue per square foot, and uses about 1/10th of the bowling lane’s footprint to earn its money for the center.
Also important is that the billiard capital investment is vastly less than bowling; have you priced pinsetters and scoring systems lately compared to even the nicest billiard table? And, there is virtually no billiard table maintenance compared to the parts, supplies, lane machine, support staff and the many other costs involved with maintaining a bowling lane. From a financial point of view, one is much better off in the billiards business.
Let’s look at it another way. Say a 32-lane bowling center, between the lineage, snack bar, lounge, and other revenue such as vending machines generates $2 million per year, and uses 35,000 square feet of space. That’s $57.14 of revenue per square foot per year. Indeed, I’ve compared notes with several center managers and a very typical figure is $50 – $60 per square foot per year. The best number I’ve ever heard was from Jim Carter in Winter Garden Florida (Don’s son and a fantastic person and manager), who proudly said he once earned $74 per square foot per year.
Now let’s talk about Pier One Imports. Who? They recently published a 3-year plan in which they announced a goal to increase yearly revenue from $200 to $225 per square foot. That’s 4 times what a bowling center can generate in the same space! These numbers vary by store of course (Macy’s take is $161 per square foot for example), and they have higher cost of good sold, but they all handily beat bowling’s earnings potential per square foot.
You can pick almost any business and the revenue per square foot is better than bowling’s. Restaurants generally lose money at $150 per square foot, and some can net as high as $400 per square foot and up.
I recently toyed with the idea of opening a bowling center in a populated area of Massachusetts. I found the perfect location – 40,000 square feet in an old Filene’s Basement location in Framingham, Mass. There used to be three houses in Framingham – today there are none. I contacted the landlord and was told that the lease would be about $1M per year, and there would have to be a 15-year minimum lease due to all the capital improvements I would have to make to the property. Doing some quick math, if I opened a center making $2.5 million a year, I would spend 40% of my revenue on rent – a non-starter. The fact is, that location needs to generate in the $200 per square foot range (about $8M per year) to make the property pay. No bowling center in the world can do that. So much for that idea!
My perfect location in Framingham. Too bad the rent is $1M a year.
Land value. The revenue per square foot argument is just one problem. The other is land value, and what else could be built on the property. Let’s take Palo Alto Bowl. It sat on a 3.62-acre site that is now under construction for a 4 story 167-room hotel and 26 condos and duplexes. Let’s say each condo alone goes for $500,000. That’s $13M right there – many, many years of a bowling center’s potential profits.
Real estate in Palo Alto is an extreme example, going for millions per acre. But the same math can be applied to most any bowling center and the end result is that there are a lot more centers still operating where the revenue is too low, the rent is too high, the land is too valuable, or some combination of the above are conspiring to cause the center to close in the not-too-distant future.
In some cases, centers remain open because of rent deals they made long ago. This was Serra Bowl’s situation. In 1962 they signed a 50-year lease for $5,000 per month. It expired in 2012. I was there the Friday night before it closed, bowling pot games. The place was packed, with hundreds of people having a great time. It closed that Sunday. The new rent would have been so high that keeping it open couldn’t even be discussed.
There is no other social activity like bowling. When was the last time you saw a group of friends or family bowling who weren’t have a great time? Bowling centers need to be treated more like parks – community-preserved spots that help provide a safe recreation location and to help maintain a community’s sense of itself.
Turn your local bowling center into a protected area, like a park. The only way to save some bowling centers is to petition the town. Ask about your local center and find out if it might close. if so, go to the town hall and ask about your center’s zoning and if the center’s location is a candidate for redevelopment. If the land is available for redevelopment, in almost all cases the financial incentive to redevelop that land into almost anything besides a bowling center will in fact cause the center to close, and perhaps in the not too distant future. The town will be motivated because it will collect more taxes on higher real estate values and/or more revenue. Tell the town no!
Please help preserve the sport we love. Get involved to keep your local bowling center open!