Ke’nekt rendering exterior.
Ke’nekt

Kenekt is a new eatertainment brand set to debut in the coming year.

Dining and Entertainment: Where Do We Go From Here?

The shifting retail and development landscape, changes in consumer behavior, and our desire to connect with each other as social animals will all converge to define the new normal for ‘eatertainment’ post-pandemic.

When was the last time you were excited about the new “Gap” or “Old Navy” store opening? Most retail locations, even the once highly anticipated Apple Stores, do not receive the same reaction as when a new restaurant, craft cocktail bar, beer garden, nightclub, or entertainment destination launches. The pandemic has simply accelerated a lot of the trends that were slowly emerging in retail prior to the shutdown. Retail was already changing as consumer demand shifted over the last decade. Ironically, the largest catalyst for retail’s major online shift, Amazon, is reportedly converting traditional malls into distribution warehouses, according to Forbes.

Most of the major developments that were in progress prior to the pandemic were on the right track. Layout and tenant mix evolved as the marriage of residential, office, and retail has become commonplace. Adaptive reuse landscape design projects have rejuvenated previously underutilized areas. Even the massive malls built decades ago were already making changes to accommodate for the shift in anchor tenants across their portfolios.

The past was “shop and dine” and the future is “live, work, shop, play.” The new tenant mix is more centered around carefully curated lifestyle amenities for the office occupants and the residents. Boutique retailers have substituted “SALE” sandwich boards for dog water bowls that get more attention from the locals living upstairs, going on walks with their “best friends.”

READ MORE: Introducing Kenekt, the Eatertainment Concept of the Future

I have been fortunate to be involved in so many of the great developments that are emerging over the next 3-7 years. They are in incredible markets and I have spoken to some astute landlords who have their finger on the pulse of where the future of retail and commercial real estate is headed. On the horizon are smaller retail footprints, more health, and fitness, high-end grocers, more “green spaces”, and there is not a single development that doesn’t have an upscale “entertainment” user earmarked for their project. In entertainment, unlike restaurants and retail, the options are limited.

The New Faces of Entertainment

As landlords realized this, they started flooding the footprints with a mix of what people cannot buy online. As they searched for the right mix, many have found that there is such a thing as “too many restaurant seats” in a development. Restaurant and retail inventories are decidedly different. Unlike that sweet pair of Nike sneakers, you can always buy tomorrow when restaurants have an off day, they never get that meal back (and they can’t pay rent).

This realization is what led smart developers to seek out entertainment venues that drive traffic and complement the restaurants rather than compete with them. Many traditional big mall retailers were seeking “FEC’s” (Family Entertainment Centers) to backfill the anchor tenants of the past, while most urban and high-end suburban developments focused on a more “adult” upscale, design-forward experience with an elevated F&B component. These big footprint places can attract corporate groups wanting to reward their teams during the week as much as the birthday parties and “date nights” on the weekends.

There already is and will continue to be a major need for entertainment. The reality is, you cannot deliver experiences. They can’t be replicated on Zoom, TikTok, or Instagram Live. Prior to 2020, “Experiential Dining” was on the rise. In fact, according to a 2019 ICSC study, the category had seen a consistent growth of 44.7 percent in traditional malls and 68.5 percent in non-malls over the last decade as brands like Dave & Busters, Punch Bowl Social, Main Event, Kings Dining & Entertainment, Lucky Strike, Spin and Topgolf began anchoring more mixed-use developments.

istock

Millennials made it very clear several years ago that they would rather spend money on “experiences” than “things.”

Many new emerging brands came on the scene introducing new technology and upping the design game such as Flight Club Darts, Puttshack, and Electric Shuffle. Offshoots of the core businesses have paved the way for upscale minigolf as Drive Shack introduced its sister concept, “Puttery,” which is a much smaller footprint in what looks to be an upscale, boutique, minigolf environment. More “soft ticket” live music players like House of Blues, City Winery, and Brooklyn Bowl began to gain popularity as they provided the perfect marriage of F&B along with a show.

Virtual reality venues have not taken off like many thought just a few years ago. Consumers have been seeking more and more analog and tactile experiences that allow them to unplug from the virtual world they have been immersed in.

“Esports” are certainly on the rise, and popular Fortnite developer Epic Games has reportedly acquired a 980,000 square-foot mall in Cary, North Carolina, for a new campus. Still there is a very specific age group that this caters to. The pandemic has only increased the desire to get away from technology when it comes to people's free time.

Many developments are including interesting art exhibits that are both indoor and outdoor. Consumer demand for these “visceral meets analog” experiences has led to the launch of immersive art experiences such as Santa Fe-based, Meow Wolf.

Where does all of this leave movie theaters, which were the steady entertainment anchor for decades? The industry has pivoted into quality over quantity. Better technology, 4D experiences, full service, better seating, and far fewer screens. Lobbies that used to be filled with “crane machines” and candy counters have been substituted with fine art and a craft beer and cocktail bar. Sticky floors and soda-soaked carpets have made way for mosaic tiles and plush fixtures. I may be going to the movies less now, but when I do, I want it to be an experience. The question is, can the upscale model and cost to build sustain the ticket price when your core audience is 13- to 24-years-old?

Millennials made it very clear several years ago that they would rather spend money on “experiences” than “things.” There was a rise of experience-driven destinations and even “pop-up” shops that allowed guests to take pictures. I don't think there was a single development constructed in America after 2012 that didn't include at least one “Instragramable” moment that allowed ever-improving camera phone technology and filters to be put to good use. These photo ops became the new marketing tool of the 21st century.

The Acceleration of Technology

Consumer habits have shifted and the new normal will set in. People who have been cooped up inside will begin to emerge and there will be a global campaign to assure the world that it’s safe to go outside again and enjoy our planet. Make no mistake, convenience is key and people will always seek ways to value their time. For this reason, delivery services, ghost kitchens, curbside pickup and upscale fast-casual will be here to stay. The new technology that became widely accepted during the pandemic, like QR codes will open the doors for the emerging and innovative technology groups like Wisely, OneDine, Acrelec, SEVENROOMS, and many more that are flooding the market with solutions to problems of the past.

The companies with strong leadership and great cultures will sustain themselves as they will be able to restart their engines, adapt to changing consumer habits and integrate technologies. I sat in a Bartaco restaurant a few weeks ago and marveled how seamlessly they integrated the in-house mobile ordering system into their program. “It’s just like adding items to your Amazon cart,” the host told us as we were being seated ... and it was. I not only ordered more, but had confidence that the “digital server” would remember that I do not want cilantro (tastes like soap to me), and left when I wanted to. Brilliant integration. Those guys get it.

Unsplash/Anastasiia Chepinska

When survival is key, you do whatever it takes. But what does that mean for the future?

Pandemic Fallout

Still, not all will be able to hang on by adopting new technologies. Over 17 percent of America’s restaurants and entertainment venues have already permanently closed their doors with estimates as high as 37 percent having to do so if additional economic help isn’t received, per CNN. There will be even more closures post-pandemic when relief dries up, rent deals run out and debt catches up to the ones holding on for dear life while landlords and banks figure out what to do. Several brands forced to shrink their programs to survive will also “sell out” their program and become as vanilla as the next guy. When survival is key, you do whatever it takes, but those small “extras” now being lost are often what define a brand and allow it to differentiate itself. Many have already convinced themselves that this is their “new normal” and don't even realize the impact that will have until they’ve reduced their business to their new standards.

I am a firm believer the companies that did not take care of their teams will be the first to suffer as they try to rebuild their brands to pre-pandemic volumes and realize they can’t do so without great people. We saw the ones that coldly cast their teams aside for self-preservation when the pandemic hit who will be forced to use what little resources they have left to try to desperately attract talent and build a culture from square one. Most of the horror stories of how employees have been treated won't be revealed until they are able to find other employment when the industry rebuilds. Right now, a lot of heads are down just to keep food on the table. Those groups will slowly drift toward irrelevance and become the ones that eventually get “canceled” by the consumers (and their teams).

A Roarin’ Return

I believe there will be a “Roaring 20’s Redux” as we emerge from the pandemic. The Netflix “Tiger King'' days are long behind us and whatever novelty there may have been in the early-pandemic in-house entertainment trends and fads have long since faded. We want to be in crowded venues, go to concerts, amusement parks, bowling alleys, comedy clubs, and other places that are fun for people watching without masks, reservations, and mandatory curfews. I want to be able to sneeze in public and not feel like Cersei Lannister on a “shame walk” as I exit stage left from the judging eyes. So many young people who have yet to really experience many of their “firsts” are currently making lists of everything they want to do when “it's safe to do so.”

Human beings need connection and are literally wired for it. Pick an expert. If you want to go old-school psychology, Abraham Maslow established belongingness and love as a fundamental human need and motivator way back in 1943. His contemporary Ray Baumeister furthered this notion with the “Need-to-Belong” Theory which demonstrates a fundamental drive and push for humans to form relationships. Modern social connection expert Professor Brene Brown eloquently states that “a deep sense of love and belonging is an irresistible need of all people. We are biologically, cognitively, physically, and spiritually wired to love, to be loved, and to belong”.

At the end of the day, we are all wired the same way and with the same three main survival instincts: Self-Preservation, Sexual, and Social. The world is making sure it’s “self-preserving” during this once-in-a-lifetime event, but when the dust settles, the other two instincts will reign supreme as we repopulate the planet and our economy.

The light is at the end of the tunnel and we can see it. Vaccines are being administered and it's predicted that most Americans will be vaccinated by the end of July of 2021. This is when we see the people step out of their caves and hibernation into the streets and begin to feel normal again. The pre-pandemic activities that made life worth living will become part of our society in an even bigger way.

Whitlock Design Group

At Kenekt, the motto is start small, think big and scale appropriately.

Where Do Things Go From Here?

The question is, with so many hospitality businesses closing and others with a long, challenging road to climbing out of debt, who will be there to fill the surge in demand? The answer lies in the new and unbridled. Across the country, there have, no doubt, been pockets of passionate restaurateurs and those who have dared to imagine a world after the pandemic. They’ve been planning, pitching, raising capital, and setting wheels in motion to emerge into a new world, unsaddled by the problems of an existing business and ready to welcome the eager droves into the new, shiny, reimagined concept of the future.

Myself and my team at AMP Up1 Hospitality Group are one such pocket. To be focused on growth and not self-preservation through the pandemic has allowed us to rethink the guest experience and use our time wisely to challenge the ways of the past. When the pandemic started, my team and I took a major risk in deciding to launch a new, state-of-the-art “experiential dining” brand that is rooted in the analog. Many progressive entrepreneurs kept saying “right now is the time to do it,” so we did. We pressed the reset button and had a blank canvas with the most talented artists in the industry, all working on a beautiful new painting as we re-define eatertainment.

I believe in our team and I believe in the future of the entertainment industry. We bet on ourselves and our ability to partner up with great people that see the future of upscale experiential dining. It’s still surprising to me how few upscale entertainment businesses there are, but I understand why. It isn't easy to put on a show every night as we do. Our business goes from zero to a hundred miles an hour and back down every week. Aesthetics are easy. Anyone can pick out a fancy light fixture and have some great art on the walls. What makes these places work is your people and your culture.

Our new brand, Kenekt will launch soon. Our motto: start small, think big and scale appropriately. We will choose the best people, locations and focus on our mission and core values as we grow. There is too much of an opportunity in this space to not build a robust foundation first. Growth only becomes hard when you sell out your values and begin to sacrifice what you are passionate about when you launch location number one when you are planning on opening location twenty. You stop trusting your people and start focusing on the automation of culture, which scares me.

Our ethos is connecting people, so the sky's the limit for us. In a world that has had more walls put up in the last few years, we aim to build bridges and are going to have fun doing so.

Take something away from someone and they want it that much more. I am optimistic about the future of our industry and I believe we all should be. We will all emerge from this pandemic and there will be a need—perhaps larger than ever—for us to see each other, to break bread, to clink our glasses, to dance, laugh, and sing together ... to connect. As with the natural peaks and valleys of life, a challenging situation will make way for a prosperous one. In this new situation—at least for a while—we’ll gather and celebrate with a renewed appreciation for the stuff that makes life so special and worth living. Those that bet against the industry will be standing at our doorsteps trying to get in when they realize there is no substitute for human connection.

Josh Rossmeisl is a decorated, 25-year industry veteran. He led Kings Dining & Entertainment's growth as COO and is now at the helm as the CEO and founder of AMP UP1 Hospitality Group, parent company to Ke’nekt.