Yo,
I hope everyone had a great weekend, I am back from my week hiatus and ready to bring the heat in this next barrel of laughs. Hope you missed me too.
Here’s the craic.
The Background
It’s the day after Halloween, and if your life is anything like mine then at least one person asked you to go to a haunted house. I’m not one for scares, so I was able to evade the request, but it did raise the question on how these attractions seemingly popup out of nowhere for two months every year.
Turns out, some haunted house can pull in anywhere around $1 million… in just two months. The total market across the United States is around $300 million.
Yes, that’s a lot, and it looks like the market is still just blooming.
A Milli in 2 Months. How?
When you think of a haunted house, what most likely comes to mind is something like the picture at the top, but in reality, most of the haunted houses now actually look like this:
Most operators have found short term, strip mall leases to be the most effective due to the ample parking, sprinkler systems (fire hazards), their size (10,000 sq ft), ADA compliance, and being able to vacate after only 2 months. These leases usually run between $10,000 – $40,000 per month. You may think that’s a lot, but compared to the million dollars you’re making it’s only a drop in the bucket.
But it can’t all be sunshine and rainbows, especially not when it comes to a haunted house, right? Well let’s take a look at the associated costs (assumes worst case scenario):
- $80,000 for rent (math)
- $100,000 for lights and electricity
- $50,000 for displays and setup
- $10,000 for ad spend
- $35,000 for labor
- $25,000 for misc (just for the hell of it)
Total Spend: $300,000
Ok, you’re $300,000 in the hole. Scared yet?
Eh, you probably don’t need to be. The top 50% of all haunted houses (aimin’ low here) bring in 25,000 customers for an average ticket price of $20.
You can do the math, but I’ll make it easy and do it for ya. That’s 25,000 X 20 = $500,000. The top 50% of haunted houses will do $500,000.
And when’s the last time you weren’t in the top 50%? Can’t remember? Yea, me either.
More on That Ad Spend
Back in the day, the success of haunted houses hinged mostly on locations, and if not location, then ads on billboards along the highway or more recently on Google.
But that all changed with Tik Tok.
Tik Tok has allowed businesses to buy ads for cheaper (although probably not for long) than some of their competitors – think Facebook and Instagram – but this has specifically benefited haunted houses.
Ok, but why?
Haunted houses were made for Tik Tok, the jump scares they can elicit, even threw a screen, have positioned them to go viral on the app many times. More so than without the video component on Google Ads.
In one case, a mere $21,500 ad spend led to over $700,000 in revenue through 24,987 clicks.
Off the Bench
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Closing Thoughts
This is one of those “Why didn’t I think of this?” and “Why don’t I have an extra $300k laying around ideas”. But there are some indications that the market is still growing strongly, especially with the new visual advertising strategies.
There are plenty of seasonal businesses out there – fireworks, Christmas trees, pumpkins – and haunted houses are certainly one of them. But haunted houses lack consolidation.
Let’s stay within Halloween for a minute. Spirit employs the same model. Open for two months using a short-term lease, sell Halloween costumes, and close for the rest of the year. They make $1.1 billion a year doing this.
They are the conglomerate that has consolidated the Halloween costume industry. You just don’t see any mom-n-pop shops for Halloween costumes. This is what’s missing in the haunted house business.
Sure, there are groups that own 10 or 20 spots, but we haven’t seen a huge corporation truly commercialize haunted houses and take advantage of consolidating this whole industry.
So, who knows, start one, then another, then another, and next thing you know you’ll be making a billion dollars a year. But not really a year, more like two months.
executively from, matt