Museums Are Telling Stories That Need to be Told

We need a new word for “museum” which calls to mind blank white walls with paintings created by old white men depicting gorgeous scenes of beautiful ladies sitting waterside with flowers and picnics.  Don’t get me wrong, these are pleasing images and I love looking at them.  But it turns out their interest and subjects leave out about 90% of the population in the world.

The world has changed.  The arts are a reflection of our society and our cultural mores. And baby, “the times they are a changin”. In response, museums are listening to the outcry.  The modern audience is new, fresh, young, black, brown, yellow, LBGTQ, female, elder, street-wise, colorful!  They want to hear about music, history, life-experience, and feeling they understand, both within (or without) the walls of our institutions.

While museums are normally thought of as staid and conservative,  our most progressive institutions, those that have realized they must change or perish, are singing a new song.  They are changing the location, experience, design, subject, and setting.  They are ENGAGING new audiences.

Last week’s New York Times offered two sections on Museums.  “More to see, do and feel -Museums are striving to expand the experiences of their visitors.”   Rock on, I say.  Some examples:

Christopher Wool decided that because galleries are so staid and expected, he would show his famous and very expensive sculptures in a raw industrial space within an office building in Manhattan.  He says in an interview that “Imperfection is the goal.  You get tension with imperfection and small amounts of chaos in these pieces, which is strengthened by how unfinished and raw the space is.”

All over the United States from San Francisco, Charleston, Oklahoma City,  Little Rock, and Philadelphia, new museums are exploring outdoor spaces as an integral part of the experience.  They are creating welcoming, collaborative spaces, where guests feel inspired and also engulfed by beauty.  Landscaping and sculptures, street furniture, water, wind  are  melded together to form an alchemy of stories in these outdoor spaces, which are not gardens, by any stretch of the imagination. 

In North Miami, the story of Haiti’s troubled history and a personal story of Manuel Mathleu, the exhibition’s creator, is told through paintings and ceramics, many of which depict violence and tumult. 

At the Carnegie Museum of Art in Pittsburgh, industrial history  is the subject of a huge exhibition, as part of the Forum Series.  The exhibition, a collaboration with Maria Watt and The Poetry Collection utilizes glass, steel and blankets as the materials of her creations

In this tumultuous time of political, racial and ethnic polarization and violence,  college protests have become a real campus issue.  In the spirit of encouraging calm and empathetic behavior, ten college museums  are collaborating on one simple activity voting. Sculptures at the University of Oregon in Eugene provide a deep dive into the false depiction of society in a Norman Rockwell painting. 

Mental illness s the subject of a new exhibition at the Mississippi of Art through a display of “What Became of Dr. Smith, a 122-foot long painting of Noal Saterstrom exploring is great-grandfather’s 40-year travails in the Mississippi State Insane Hospital.  Among other things, he explores his own battles with depression and depersonalization.

This fresh and sometimes disturbing new museum content and form expand human understanding and connection through art, in a time when the world is anything but peaceful.  Perhaps this should be the mission of all museums, in hopes that someday soon, it will no longer be so desperately needed. 

As I wrote these words, I discovered that these types of new and thoughtful attractions have always formed the basis of my practice.  Our body of work includes museums of motion pictures, television arts and sciences, Native American stories, Negro League Baseball, young female empowerment and carousels, to name just a few.  I just never thought about it in that way.  JB Research Company has always worked on projects for the 90%!

When, Where and How We Are Normalizing

The Pandemic began in March 2020, just two weeks after my fourth grandchild was born. I had just returned from New York for Fashion Week, a watershed moment in my life, something I’ve always wanted to do! That’s how I remember it. And now, almost 40 months later, how has our business changed? Is there anything normal about our entertainment and retail worlds?

 

Let’s talk about the movies, the one thing everyone has in common in terms of entertainment. Theater grosses are down 40% from 2019, as are ticket prices, adjusted for inflation. Our movie product is uninspired, with just a few extraordinary stories, and they all won Academy Awards. As a matter of fact, I got the closest I ever will to the Academy Awards this year, by attending a very glittery and glamorous party at the Academy Museum of Motion Pictures:

In the latest Morning Consult report on what we feel comfortable doing, 77% of adults said they were OK now to go to the cinema. But the latest Fox News Poll said that 60% of U.S. adults felt that Covid had changed their lives forever. Wisdom says, “only time will tell”.

 Have all retail sales converted to digital? Are shopping centers dead? In fact, the percent of retail done online increased from 10% to 15% during the pandemic and have normalized now at just below 15%.

So what about total retail sales? Well, in fact, these have also grown (net of car sale and gasoline sales)?

 

As you can see, retail sales in real dollars, not adjusted for inflation, grew 8.7% annually between 2019 and projected 2023, even during the pandemic years. But adjusted for inflation, real growth has been 4.1%, still somewhat remarkable given what we’ve been through. Of course, government subsidies help out quite a bit. 

I am a data nerd. I get all warm and excited when the census is released every 10 years. I looked at retail sales for the past four years and some fascinating things jumped out. GAFO sales, which includes most things sold in shopping centers, declined by 3%, which is not adjusted for inflation. Furniture, fixtures and equipment went up for three years, then decline significantly, probably due to the fact that people were out again. Food and Beverage stores, which include alcohol, grew by 17%, even after people could get out in 2020. Clothing declined significantly, down by 30%. Did people start buying more alcohol instead of business clothes, or any clothes for that matter? Did we give more attention to making our homes our staycataion palaces?

 

It is a very interesting phenomenon that when we have an “Act of God” experience that depresses our economy, it normally takes at least 5 years to get back to zero. In the case of Covid, its anyone’s guess.

In summary, the news is mixed, some disappointing, some hopeful. I am an optimist.  I think we’ll be back to where we started by 2025. 

What’s your experience been?  How’s your business faring?  Write us and let us know how you have experienced the pandemic and what you see for the future.

And the Oscar Goes to………

Yesterday was the experience of a lifetime. I was privileged to attend one of several days of pre-opening of the Academy Museum of Motion Pictures (AMMP).

But as they say in the movies, here is the backstory.

In 2005, I received a call from the museum coordinator, the only paid employee at the time, to provide a proposal for a feasibility study for a new museum. I had been involved with the feasibility/concept development for the Dolby (Academy) Theater at Hollywood and Highland several years before, so luckily I was on the radar.

When the Academy decided to finally move ahead with the century long museum planning, I got a call. “Can you help us out with the market research and financial feasibility testing of our museum? We don’t know what it is, where it is, or size, but still, can you help us? All we know is that we want it to be the boldest statement ever made on the history and effect of film!” It was the luckiest call of my life!

The director at the time was a brilliant woman, an entertainment business expert and a published fiction writer. She made the job that much more stimulating and creative! We worked with her on many teams hired (many then fired) to provide concept development, site location analysis, market research, and financial feasibility testing.

In all, we did 15 different analyses of multiple sites, configurations, sizes, square footages, models, retail, dining, and ancillary spaces within the museum. First question, “Should it be in Hollywood?” YES of course. You don’t need an expensive consultant to tell you that!

Please note, the museum is not located in Hollywood, because of about a thousand different reasons.

We first looked at the surrounding area of the Academy Library just north of Sunset and Vine, proximate to the Cinerama Dome Theater (closed for now, went out of business). In terms of the macro considerations, and what the world thinks they understand about Hollywood, that is one of the top 5 locations. And for the first five years of this process, that was the site we tested, studied, analyzed, and then amassed the real estate around the site to provide sufficient space for the new museum. This process was ongoing, before we even knew requisite square footage based on market capture, annual attendance, design day attendance and parking needed.

Remember, this is Southern California. No one is going anywhere without their car. It may be changing a bit now because of environmental concerns and traffic, but Angelenos are still in love with their vehicles.

That was the first of many sites studied because of careful planning, management by committee, and economic circumstances, (which included booms and busts, the Bernie Madoff catastrophe with lots of Hollywood money lost), and change in leadership. All in all, the museum cost over $500 million including all the planning efforts, development and hard/soft costs. Not the most expensive museum in the United States, but one of them.

Some of the planning sessions and meetings were lifechanging. I got into an argument with Jon Landis over projected attendance. I got tongue tied in a meeting with Tom Hanks.

One of the earliest concepts, which I believe I came up with in concert with the gentleman who was head of the Hollywood/Highland project, was the “Red Carpet “ or “Oscar” experience, a chance for everyday folks to experience what it is like to walk the red carpet and then win an Oscar. I came from a show business family. I was enamored with the process from the first ceremony I remember watching. It was always an event at my house, with canapés and a hush over the living room when the awards were presented! I always dreamed of going to the Academy Awards.

And my dream came true this week!

 

The Best Job I Ever Had

                

Yesterday on the ABC television network, the entire day was devoted to programming of the Academy Awards.  This is always one of the most coveted days of the year for me, having grown up in the entertainment business and living in Beverly Hills.  I love the stories and the glitz and glamour.  The dresses!!  The hair, the make-up, the shoes! 

This year is especially exciting since the Academy Museum is opening, honoring the legend and legacy of Hollywood films.  I am completely humbled and honored to have conducted the market and financial feasibility study for the museum, as it underwent many twists and turns on its road to being born.  This is a re-blog of an article I wrote in 2018 and I think it is appropriate today.

“About 16 years ago, I got a call from a perspective client, a newly hired director from the Academy of Motion Pictures Arts and Sciences, asking if I would be interested in conducting some market research for a new attraction/museum themed on the Academy Awards.  Would I?!?!  I had been the one lucky enough to do the work for the Dolby Theater at Hollywood & Highland where the ceremony takes place, so it seemed a good fit and logical that I continue on to do the museum feasibility.  But my joy, my heart, for Hollywood, no one knew that!  My family had always been in the entertainment business, with my father tangentially involved on the business side, having been a pioneer in the cable television industry.   And my aunt was always working for this or that movie star as an executive assistant.  I was lucky enough to visit the backlot of 20^th Century Fox before it was Century City!  I spent countless hours watching movies being filmed, then sitting in theaters watching them roll by me on the big screen. 

Would I be interested?  Heck, yea!!

Since that time, I have been the consultant called upon to do the background market research, analysis and financial projections for the site selection, sizing and operation of museum.  I learned a thing or two during those years.  I gained a deep knowledge of large museums and what keeps them thriving; I learned how an endowment can shrink during a deflation; I learned that money earmarked to never-be-touched has a way of disappearing in hard times.  And I learned about the conundrum of keeping things fresh so that resident visitors will keep returning time and again.  I am thankful that my job always changes and that I always learn, no matter the engagement.

Over the years, we have wrestled with all the issues associated with new development including disagreements about what it should look like, what its mission should be, where it should be sited, who is its targeted audience (please don’t say everyone!), and what’s the best way to keep the project on-time and on-budget.  To be clear, these issues are complex and are made more difficult when there are many masters to serve.  Still, when the project is to reflect the points of view, hopes, dreams, and legacies of America’s most important cultural export, cinema, careful consideration must be given to each one. “

Trends After COVID-19

We are all waiting to get back to it! 

I have never been so anxious to get out of the house, see a movie, have lunch with friends, go on a vacation, hug my grandchildren, and just plain have some out-of-home fun!!!  Many of our clients are wondering how this will all happen when we’re free to mingle again, and what will be some of the lasting trends.  As such, we did an overview of six trends or values in the leisure and entertainment industries that we believe are here to stay in our behavior as a result of the COVID confinement. 

1. Value for the Money

According to a 2020 Kinsey report of 75,000 consumers surveyed around the world, “value for money” was the highest rated purchase driver, being rated number one by 63% of people surveyed.  The post-pandemic customer wants to feel they have made a smart purchase decision, regardless of the sector, be it retail, entertainment, or health care.  This value is positively associated with digital information and purchasing ease. 

2.  Localization and Ease of Buying

Since consumers are being forced to “stay at home” or close to home, and as distant and foreign travel has dropped precipitously, consumers value easy access and purchase experiences for all types of goods and services close to home.  Again, this points to the need for a seamless online experience for potential guests in the form of social media and information technology associated with purchasing, advertising and promotion.

3. Staycations

Hand-in-hand with localization of goods and services, Staycations are valued in this down economy.  This trend always emerges in recessions and/or depressions.  New attractions that present an outstanding experience will likely be highly valued after the economy rebounds.  Prices must be carefully set to allow resource-strapped consumers to enjoy themselves without breaking their bank!

4. Digitalization

Digitalization has accelerated as a consequence of the pandemic, opening opportunities for the attraction industry.  Operational strategies for delivering an experience for the customer to learn about and purchase admission, other amenities (such as merchandise and concert tickets) as well as other events must be developed and exploited.  Adopting digitalization as a marketing platform with personalized experiences based on the guest’s past behavior and purchase history will be of paramount importance to attractions and retail.

5. Need for Safety and Trust in Brands

In the McKinsey global survey, personal safety was ranked as important by 40% of respondents.  This is coupled with trust in the brand.  Brands must deliver on their promise with a sense of purpose and meeting the safety needs of both customers and employees.  Also on the rise in consumer expectations is the commitment to environmental and social policies.  The technology and backstory/concept of the brand should be front and center in the digital and collateral materials developed, highlighting the creation of a safe and attractive place.  Retail, leisure and entertainment brands should advertise commitment to the environment and public health policies.

6. Surge in Some Activities

Initially, there will be a huge surge in doing the things we’ve missed most.  Then demand will stabilize, but we must be ready for the onslaught of business when the world normalizes.

According to Datassentials, 2021 January report, here are the rank-ordered activities we can’t wait to get back to post COVID life:

Source: Dataessentials

In summary, we believe our post-COVID world will be a different place than the one we knew before 2020.  Addressing the obvious and subtle shifts in consumer wants and needs will determine future success in the leisure and entertainment industries.

Nimble, Responsive, Proactive, Creative, Woke!

I am not in any way discounting the dangerous and dire straights we are in these days with the global pandemic and how it is affecting our health and economy.  But it occurred to me when I was not doing anything this weekend (which happens a lot these days) that we are a nation of innovators, and that most of the tech innovations and discovers came from the U. S.  If ever there was a time to “think outside the box” (why do we use that expression?  Why don’t we think outside the parallelogram or the rhombus?) it is now.

Businesses are closing down by the hundreds.  How to fix this?  What can we do?  And just as I was musing/obsessing about this, we drove by a billboard on the 101 in San Francisco for Salesforces’ new product “Work.com”.  Full disclosure, my son works for Salesforce, so I am not completely objective, but my thought was “that’s brilliant”  Work.com, is described as “providing all the latest thinking, models, advice and all new work.com solutions.” Some of the things you can do with the new system are quoted as follows:

• Get products to support your return to the workplace
• Find thought leadership content from renowned experts
• Access all the latest COVID-19 data
• Learn through inspiring stories
• Extend with guidance from our ecosystem

Brilliant!  A solution, instead of a worry or obsession.  I began to look for other exciting new solutions to our current state and I found another.  The whole movie industry has been turned on its head, with the closure of cinemas.  New releases and summer blockbusters, so important to viewership at theaters, are being scheduled for first run on television private services.  One proactive solution, the reemergence of drive-in theaters!  Anyone over 30 remembers going to the drive in first with your parents when you were a kid, and then with your friends as you got older and were able to drive.  I remember getting in the trunk at the drive-in gate, with some of my friends, so we didn’t have to pay as much.  Morning Consult provides an amazing array of data on topics important to all of us.  Their entertainment sector report this morning presented data from another completely nimble solution, the return of the drive-in movie theater.

This gorgeous picture is an aerial drone view of a temporary drive-in movie theater at the Rose Bowl stadium, known for its spectacular Fourth of July fireworks which were canceled this year to reduce large public gatherings due to COVID-19 concerns. The latest polling of 2000 adults over 18 in the United States shows the following fascinating results:

Results indicate that the majority of Americans (55%) are interested in returning to the theater in a safe fashion.  The bravest is Gen Z, (aged 10 to 25 years of age) including 66 percent of Gen Z adults. Adding to the potential draw of the drive-in is that audiences are 12 percentage points more likely to be comfortable with watching a film outdoors than inside, according to separate Morning Consult polling.

Drive-in or picnic style movies are simple to set-up and earn revenue on food and beverage.  Some drive-ins have even tried offering upscale sandwiches, picnic baskets, small-batch microbrewery beers, and designer wine brands curated by a sommelier.

For commercial real estate owners, business is not good right now.  But what if we thought new:  Let’s host art shows, turn our parking lots into drive-ins (Walmart is doing this!), offer our locations for COVID testing!  Let’s have a “can do” attitude and turn around our dire situation right now! Maybe we can even give our clients and customers something to smile about!

Let me know what you’re doing creatively in your spare time.  We always love to hear from you and right now, nothing is more important than sharing ideas and innovations!

And Just Like that……Everything Changes!

These days, my blog just seems to write itself. Experiences and new ways of accomplishing almost everything, from washing clothes to shopping, are the norm. But as humans, it takes an exceptionally long time to change our ways so that all our new activities feel stiff and unfamiliar. Take for example, shopping, my passion! Here in Napa County, we are in Phase Two A of the process. That means many retail locations can reopen, except ones that involve person-to-person contact like salons, nail parlors, gyms, and spas.

About a week ago, my husband and I went to the University of California San Francisco hospital, where he had a follow-up appointment for a recent health scare. Since no one is allowed in the hospital other than the patient, I had to occupy myself with walking around nearby.

UCSF is in Mission Bay, as is the beautiful new Chase Center Warriors and concert arena. This venue opened in September 2019 at a cost of half a billion dollars. Besides the 18,000-seat arena, the project boasts 580,000 square feet of office space and 100,000 square feet of restaurant and retail space. Additionally, a new light rail system connecting the arena to downtown is also proposed, at a cost of $1.0 billion. The MANICA designed arena opened with a Metallica concert playing to a sold-out crowd.

Huge investment full of vision and promise. A community gathering space that would be alive at least 250 nights each year. The one and only first-class arena for concerts in San Francisco. A new space for artists to add to their tour routes! We attended the Sara Bareilles concert in January and though the house was set in the concert-configuration at 10,000-capacity, it seemed like we were onstage with her.

Here is what it looks like now:

Eerie. A boarded-up ghost town cordoned off to all seeking to visit. The many restaurants were either not yet operational when the Pandemic began or closed now because of it. A special favorite of Northern Californians is Gotts, a local hamburger and milk shake joint that now offers sushi and other fancy stuff. I almost cried when I saw this:

   

How could this happen? Who could have predicted this devastating blow to a brand-new entertainment venue in one of the best entertainment regions in the world?

And just like that, everything changed again! Last week, stores were allowed to open in Napa County, where I live. I was thrilled. It was advertised that the Napa Premium Outlets were not yet open, but that the Vacaville Premium Outlets were (both Simon Properties). I drove the 35 minutes to the Outlets and was greeted by a very spotty opening sequence. Most stores were still closed, and signs disclosed they would be open next week or the week after. The few stores that were open look like this:

One or two customers in each shop.  The stock was plentiful because it has been sitting in a warehouse for two or three months, awaiting opening of the stores . I felt particularly sorry for a new William Sonoma Factory store that just opened for the first time, with no customers in its beautiful store:

I have PTSD from trying to keep up with the world. It’s like when you have your first baby, or worse yet, your second baby, and just when you think you have it nailed, their behavior changes, they start sleeping less or more; they don’t like the food today that they loved yesterday; they cry endlessly for no reason, and you want to run away. But of course, you don’t, except for maybe a minute or two when you lock yourself in the bathroom and sob for, which is all the time you are allowed to yourself as a new parent. That is what I feel like today. I want certainty; I want routine; I want to get on a plane and go on my summer vacation; I want to see my grandbabies; I want to kiss my kids! I will just keep muddling along, as I imagine we all will. And I will keep writing blogs that someday may seem like the poetry you wrote when you were a stoned college kid.

What are you doing to stay sane? Share with us your tips for slogging through your days.

It’s the Throughput, Stupid 1/

Someone very famous once told me, “Jill, always remember you’re a numbers gal.”  Every entertainment-infused real estate development has industry standard numbers that equate to profitability.  All retail, dining, entertainment attractions, public assembly, hospitality, sports and cultural facilities follow set rules.  So, for those of you who aren’t throwing in the towel yet, here are some simple rules and some complications, based on a couple of very simple formulas:

1. Annual Attendance = Gross Market Size x Market Penetration Rate
2. Design Day Attendance = the Percent of Annual Attendance seen on any of the 15 to 20 busiest days of the year.
3. Peak On-Site = the Length of Stay relative to the Period Open, accounting for arrival and departure patterns.
4. Gross Revenue = Annual Attendance x Per Capita Revenue for Admission, Retail, Food & Beverage, Merchandise, and Ancillary Sources of Revenue
5. Net Operating Income or EBITDA (Earnings before Interest, Taxes, Depreciation, and Amortization) = Gross Revenue minus Projected Expenses for each year the project is open.  The formula normally refers to a stabilized year.
6. Warranted Investment = EBDITA x Industry Standard Years to Payback. (For non-entertainment real estate projects this number is the basis for the capitalization rate.)

In my experience, the throughput’s the driver, followed by per caps. Since throughput is being curtailed by up to 75% in some industries including theme parks, movies, and restaurants, this is a major issue.

Therefore, any entertainment real estate project hoping to make it through to the other side (wherever that lands) must look to increase per capita or lower development and/or operating costs.  That’s a tall order.

Another way to keep NOI thriving is through development of other sources of business, in other words, diversification.  Disney is doing a particularly good job:  an example, they will be releasing the digital version of “Hamilton” with the original Broadway case on Disney + within the next 60 days.  Theme parks are being decimated so the company is diversifying into creative and original digital offerings.

I don’t really have any easy answer because this is an evolving situation that changes daily.  What I can say will absolute certainty is that leaving out necessary planning and development steps will result in failure.  During the last recession, we had a few clients who didn’t plan enough parking for design day on-site needs, to save money.  And sadly, they had to fix this after the fact, spending millions of dollars of cap ex in subsequent years.

There is lots of work to do to create the new business model.  My clients and friends should be working on this right now!  What are you doing?  How are you developing new capital and operating models?  Let us know, and together we can save our industry!

1/ Throughput is the annual number of guests visiting a project on a given day, month, week, or year.

 

 

Musings From a Bored Feasibility Consultant

My practice lives and dies with innovation and optimism.  With most clients and friends scared to death about what this crisis will bring when it is over, or whether it will ever be over, my normally optimistic client base is taking a nap.  They are shut down and not practicing good old American ingenuity.

I have lived through many downturns and booms, a litany of business cycles.  My space in the entertainment development world falls between the idea and execution. Is this idea crazy?  Does it have legs?  Can I afford to develop it?  Where will I get development funds?  Am I nuts to be thinking this right now?  These are some of the questions my practice is hired to consider.

In all cases, I provide one of the following answers:

1. Brilliant idea. Let’s do some preliminary testing.
2. Hmmmm, I think that’s been done before, but maybe we can improve on the existing model.
3. I like it, but I really think the idea needs more development on your part, or if you like, we can help you move it along.
4. That is the dumbest idea I have ever heard. Save your money, don’t hire me, or if you’ve already hired me, you should fire me!

A couple examples of the ill-though-out ideas:

• A large INDOOR entertainment center on the beachfront of a major East coast resort.  The branding strategy: It’s a beautiful beach day, let’s all head inside!
• A 100,000 square foot museum at a major Indian casino in the U.S. with the theme “The slaughter of the tribe by the White man.”  (Footnote: The gamblers at the resort are 95% White.)
• A major entertainment company’s decision to disallow wine at a park in France.
• The decision to build two competing 20,000-seat amphitheaters across the highway from each other in a major Orange Co. California city.

But happily, more of my practice involves ideas that have you smacking your forehead and saying, “Why didn’t I think of that?”!  Some examples:

American Girl Place (built and wildly successful),

Academy of Motion Pictures Museum (to open year’s end 2020),

Hollywood and Highland (the initial plan didn’t follow our advice);

Sony Metreon (also, didn’t follow our advice);

A new hospitality/retail/dining/entertainment/ development in Mecca, the Hajj (they didn’t hire us:  I wouldn’t have either!);

A mixed-use sports and entertainment-infused $1.0 billion development in downtown Edmonton (The Oilers got 60% of their Phase One development funds from our numbers, the first time ever a sports venue received public funding in the province):

Maybe soon we will have a few new brilliant ideas to report to you.  Until that time, stay safe, well, healthy and hopefully, not too bored!

 

 

 

 

 

What Will the World Look like in 2025? Five Things to Know for the Future

 

It’s a question on everyone’s mind.  In times of uncertainty, we look to the past, we look to the future, because we just can’t understand what’s going on right now!

In my world (and probably yours), I am working digitally.  That’s nothing new for me.  But right now, I have a profound sense of loneliness.  I miss the sights and sounds of movies, shopping, visiting with my grandkids, even going to doctor’s appointments!  I miss the gym (well maybe not too much) and I miss going out to dinner!!

In these quiet moments, I’ve been thinking about how our world will change in the next five years.  Here are five of my predictions about what we will be doing and how we will be doing it in 2025.

1. People have short memories. That’s a good thing.  If it were not so, no one would ever have a second child!  One of my major prognostications is that the gathering spots all over the nation will be teeming with people and activity.  But it will be different.  Visitors will “keep their distance”, be more polite, and leave space for their fellows both in front and back.  This new behavior will change necessary planning factors for public assembly.  Our current “order-of-magnitude” space requirements for various entertainment and attraction venues – theme parks, movies, museums, convention/conference centers and retail spaces – are all planned this way.  We will need new numbers, and that will put pressure on the size of many of our social institutions and facilities.  This will make them bigger, and thus likely more expensive to build.

 

2. Consumers will pivot spending from big ticket items to more affordable choices.  Theme parks and cinemas are considered recession-proof.  That’s not true, but they are much more sustainable than expensive cars, hotels, high-priced vacations and restaurants during and after a recession.

As a corollary, Millennials who are the darlings of advertisers and the future of our country’s spending, will keep on the same consumption track, preferring experiences to things. But the experiences will be closer to home and without as much adventure as before.

These Millennial consumers are:

• •  Born between 1980 – 1994
  • Number 72 Million
  • Ages: 25-39
  • Forming Families Now
  • 29% of Adults in the U.S.
  • Ethnically Diverse
  • Tech Savvy
  • Multi-Taskers
  • Prefer Experiences to Things (So important to keep in mind for retailers!)
  • Prefer Health to Wealth
  • Prefer Mobile/Digital Communication
  • Responsible for $14 billion in consumption expenditure

More fascinating though is the amount spent by Generation X, those consumers born from 1965 to 1980, and aged 40 to 55.  These are the most prolific spenders, accounting for $24 billion in annual expenditure.  Why we aren’t planning for and paying more attention to these mid-life consumers is beyond my understanding!  (In fact, a comparison of the average annual expenditure on Entertainment by cohort shows GenXers spending $3,231 per household, followed by Boomers at $3,286 per household and finally the younger Millennial Generation at $2,186 per household.  Average for the nation is about $2,800.)

These expenditures will likely be at the same in 2025 as they are today.  But smart owners and developers will target the groups that spend the most.

3. New entertainment-infused projects that continue planning and development during this relatively short period of confinement will come out on top. These projects will be first to market.  If planners/owners develop well thought out, well designed, well executed projects with rational business plans, they will reap the benefits of a surge in demand immediately following the downturn and thereafter.

 

3. Cultural entities such as museums and live theaters will present content that is relevant, easily understood and fundable. They will likely lag behind the uptick in commercial entertainment activity.  This is because spending for nonprofit activities are seen as more discretionary than other forms of entertainment.  In fact, for the past 20 years, expenditures on cultural attractions have been slipping. Why?  Baby Boomer parents did not do a good job of educating their children on the value of theater and art.  That’s the number one factor in propensity to spend on the arts:  exposure as a child.  Our institutions will reflect the society and cultural needs of a diverse population.  Many of our older institutions were born in a homogeneous America that no longer exists.

 

5. We will return to a simpler time, albeit with sophisticated tech all around us. Everything old will become new. Consumption of just plain fun with some silliness will be the norm!

While living abroad for a year, I experienced this uncomplicated world that offered          simpler and enduring fun.

I went to the mountains with my friends:

I attended Oktoberfest in Munich:

I attended  opera at La Scala and the Teatro dell’Opera di Firenze. I went to formal            dances:

And I lightened up, became a kid again, upped my joie de vivre:

What are your thoughts about the world after Covid-19?  Write us and let us know.  We want to keep connecting with our friends during this time.