High overhead combined with an over-saturation of similar businesses are being blamed for the latest casualty in the highly competitive indoor-activity sector.
Sky Zone’s Winnipeg trampoline park on Fort Whyte Way shut its doors for good Sunday. Its closure follows Great Big Adventure, an indoor playground that shuttered in September, and Adrenaline Adventures, an activity park in Headingley that shut down in 2017.
"There is a need for (indoor kids entertainment businesses) in a climate like Winnipeg," said Sean Buchanan, an assistant professor at the Asper School of Business who teaches a course on business and society. "But you can only have a limited amount."
There are inherent risks with running entertainment centres such as Sky Zone, Buchanan said.
Customers often only pay for admission at the centres, which runs around $20 per hour per person. However, the facilities’ operating costs are expensive because of the massive space they require.
"Especially a place like Great Big Adventure, where you can just pay and stay there for six hours, it’s hard to generate enough revenue to make it a sustainable business," Buchanan said.
Play zones such as Hide N Seek, which offer more things that customers pay for — such as video games and food — have a better chance of staying alive, Buchanan said.
Some entertainment parks aren’t as busy in the summer, and some don’t cater to all ages of kids. These factors, coupled with too much competition, can be detrimental to a business, Buchanan said. Particularly when most of these businesses are concentrated in the same part of town and not easily accessible by public transit.
"You have to be able to attract the most amount of kids in a cost-effective manner and also be able to offer something for basically summer and winter," he said.
Sky Zone was open year-round, but it wasn’t the only indoor trampoline park in Winnipeg — nor was it the biggest. Flying Squirrel Sports opened on St. James Street near the end of 2017, and Fun Park Amusement Center on Wilkes Avenue followed soon after.
Buchanan noted that Winnipeg’s entertainment centres are generally in the southwest corner of the city.
"I think more should be done to expand places like these, which are necessary, to places that are easily accessible, especially near public transportation," Buchanan said.
Brennan Pearson, vice-president of ICI Properties at Shindico, said the retail industry is becoming more experience-driven.
While Pearson said he couldn’t speak specifically to the closures of Sky Zone and Great Big Adventure, he said all businesses must make their brand stand out among the crowd.
"If you don’t change, (and) you don’t bring in new offerings in order to compete for those dollars, then you can be forgotten," he said.
"You’re seeing boutique fitness classes, escape rooms, group hubs, indoor badminton courts," Pearson said. "Those experiences are definitely doing well."
Arnold Cohn, president of Sky Zone’s Winnipeg franchise, said the company offered monthly and annual passes to bring customers back.
"A lot of them were sold, but in the end, it wasn’t enough to continue," Cohn said.
Cohn cited high operating costs and an over-saturated industry as reasons for his franchise closing.
He said the company announced it was closing well in advance of the actual date, so customers could use their gift cards and coupons.
"We wanted to close with honour," Cohn said.
People who’ve paid to have birthday parties at Sky Zone after Dec. 1 can take their deposits to Fun Park Amusement Center. Customers can also ask for a refund.
Sky Zone’s Winnipeg closure comes after the closure of Sky Zone’s Surrey, B.C., location in January.
Community Correspondent — Headingley
Gabrielle Piché is a community correspondent for Headingley. Email her at email@example.com
Updated on Monday, December 2, 2019 at 6:08 AM CST: Adds photos
6:49 AM: Adds photo