Bowling in Russia (31.08.2006)

The Russian bowling market continues its gradual evolution. Since 1997 the huge funds have been already invested, but it’s still early to confess that the consumer’s demand is completely satisfied. So bowling is moving forward in Russia.

In USA there are over 115000 lanes nowadays, which means 2500 people fall at 1 lane (taking into consideration the 298-million population of the country). In Russia 43000 people fall at 1 lane, since there are more than 3300 lanes here.

It’s more than 700 lanes in Moscow, but seemingly it’s not enough – if you want to bowl Saturday night, you should reserve the lanes several hours before (the exception to the rule is the summertime). This tendency is even stronger if to travel inland. In the small towns with lack of entertainment options, the demand on bowling facilities is great. So bowling centers appear almost everywhere in Russia, and even in the urban villages. About 40 new clubs have been opened in 2005 – among them only one’s situated in Moscow (“Cosmik-Kuntsevo”).

The serious problem the bowling industry has to face is lack of appropriate premises. As we know, a bowling center needs much space. The experts insist that minimum length of the hall should be 40 meters, taking into consideration 30-meters lane, the rest area, the reception desk and the bar. The width of the hall depends on number of the lanes (plus it’s necessary to count side gangways of 0,9 m each). The floor-to-ceiling height should be 4 meters.

So, on average a bowling lounge needs 600-2500 square meters. It’s easier to find such a large space in a retail-entertainment center. Just 5-6 years ago their proprietors were not inclined to install bowling, but now the situation is quite opposite – the bowling lounges in many entertainment properties under construction are often included already in the construction project.

Bowling lounge by the retail-entertainment center is a convenient recreational mode for the whole family. While the husband hits the pins, the wife goes shopping, and children spend the time in the playing area under control of the tutors. Evidently, the family spends much time in this center and of course, spends much money.

Today the development of bowling industry in Russia is highly determined by the situation in the retail market. The more retail-entertainment centers enter the market - the more bowling centers open. For instance, in Saint-Petersburg up to 2003 inclusive the bowling lanes have been installed solely in the retail-entertainment centers. The same tendency is observed in many regional cities. The main bowling’s competitors are the cinema theatres, which already exists in the retail-entertainment centers. The rent rates in the big retail-entertainment centers now are pretty high – up to $450 per 1 square meter annually (if to rent the lounge of 350-3000 square metres).

The other growing tendency in the Russian bowling industry is the formation and expanding of the leasing business. Many bowling centers prefer leasing the equipment to purchasing it. Since 2005 the conditions of the leasing agreements have become more convenient for the investors, and this fact is a positive factor in the industry development. So growth of bowling industry in 2005 was caused in some cases due to the leasing.

Income and expenses

Traditionally, a bowling center draws revenues from open play bowlers. In contrast to USA where bowlers pay per game, the clients of the Russian bowling center pay per hour. The charge is 150-1000 ruble (about 6-38 dollar) depending on the region.

Around 40% of income of average Russian bowling center the foodservice gives. The ancillary profit areas are arcades. The part of the revenues gives some partner programs, lotteries, special actions, etc.

When first bowling centers appeared in Russian in 1997, the charge for bowling used to be $50 per hour. That time the recoupment of capital investments was higher than nowadays. The average recoupment today is 3-4 years depending on placement and rent rate. According to the experts, the annual revenue of Moscow bowling centers is about $70-80 mln. The annual revenue of all the Russian bowling centers is around $180 mln. The monthly net profit of a center of 8-10 lanes is about $10.000-20.000. The level of revenues is highly dependant on the season. So in the summertime many clubs are almost empty. But in the cold time the situation is different. If you want to bowl Saturday night, you should reserve the lanes several hours before. The greatest demand on bowling is on December, so the revenues in this month are in 3-5 times higher then average monthly.

The quality of equipment is getting the most important factor for the investor when he chooses the equipment for the bowling center. A time ago the determining factor was the price.

The investment volume depends on the format of the center. The specialists say if you have enough space it’s better to build the multifunctional club. In addition to bowling, it should offer billiard, arcades, food area, children room, etc. This kind of bowling center is always more efficient.