Going Into the Great Unknown

Reopening Doesn’t Mean Business as Usual, But That Can Be Good

by Howard McAuliffe, Partner, Pinnacle Entertainment Group

The most recent news as I write is that both Chuck E. Cheese’s and AMC Theaters are on the edge of bankruptcy, and by the time this goes to print they may have gone over the edge. Even if these two giant companies survive, many others likely will not. How many will depend on a lot of factors including:

Does the virus continue to diminish or is there a second wave?

How much economic damage results from the shutdown we are just beginning to feel?

What permanent changes do consumers make to their behavior?

In addition to these troubles, social unrest has erupted in the United States because of long-standing injustice brought to a head by the killing of George Floyd. The big question on our minds is, “How do we get back to normal?” The answer, I believe, is that if by “normal” we mean back the way it was pre-pandemic, then the answer is never. Further, I do not think that is necessarily a bad thing.

It is time to focus on what we can do now to improve our businesses and communities for the future, not try to focus on getting back to exactly what we were doing before the shutdown. We are working on evolving our business for a future that will probably have fewer new locations opening in the next five years than the last five.

Here are a few things we are focusing on that might be areas for others to look at:

1) We are looking for opportunities to operate. There will be less competition for those who survive, favorable rents to be had, high-quality, used equipment for sale at significantly reduced prices, and maybe even viable operations available to buy. There was increasing saturation in several markets and with several concepts. This downturn will correct that exuberance.

2) Focus on improving the diversity of our suppliers, clients, contractors and, as we grow, hire a diverse group of employees. I have noticed for years at tradeshows that there is a very obvious lack of diversity, not because of malice but likely because of lack of exposure to the industry. I also believe that a significant number of consumers will be considering the diversity of staff as they select where to spend money, especially in major metropolitan areas.

3) Improving operations by improving staff training, cleanliness of facilities and guest comfort. We have developed a game-based training that is proven to teach better-than-standard training and also appeals to younger employees. Facility cleanliness and guest comfort have always been important. If we can execute in these areas during these hyper-sensitive times, we will be able to execute at a higher level going forward.

We are as anxious as everyone else for facilities to open and to get back to profitability. However, I do not believe anyone knows when that will be or exactly what it will look like. There are far too many variables, many of which are unknown. I do believe this downturn will bring opportunities, that improving diversity is good for all of us, and that improving operations will continue to pay dividends. While I am sad that so many of my friends and colleagues are struggling right now, I am excited to see the evolution of our industry into the future. All we can do for now is focus on where we can improve as companies and as people.

Howard McAuliffe loves to imagine and implement new products, business models, and ideas, and is a partner in Pinnacle Entertainment Group Inc. He’s an industry veteran who got his start in the business when he was just 16 and has 20 years of expertise in product development, as well as FEC and route operations. Howard’s wife Reem and young son Sami are the center of life outside of work. When he’s not working, Howard can be found enjoying the outdoors, hiking, fishing and mountaineering. Traveling anywhere new or to old favorites like the American West is a passion. Readers can visit www.grouppinnacle.com for more information or contact Howard at howardmc@grouppinnacle.com, he welcomes positive as well as constructive feedback and counterpoints.