Breaking into the boom in escape rooms: What entrepreneurs need to know
Hijacked airplanes, derailed subway cars and trapped submarines are usually the stuff of nightmares. A growing number of entrepreneurs, though, are catering to customers willing to pay to escape these types of situations for fun.
Escape rooms are adventure games in which teams of friends, family or colleagues work together to find clues and solve puzzles to escape a simulated danger before time runs out.
An escape room can make about $125,000 a year if it sells out most weekends, according to David and Lisa Spira, enthusiasts who review escape rooms around the world for their blog, Room Escape Artist. But entrepreneurs also face challenges like learning a new craft, a difficulty raising funds and an increasingly competitive market.
Originating in Japan, escape rooms have taken off in the United States in the last few years (In Las Vegas, nearly 20 escape rooms are listed under a Google search for escape rooms). In 2014, there were 22 escape room companies in the United States, according to the Spiras. That number has grown to 2,000. One of the most successful, Mission Escape Games, which opened in 2014 in New York and now has four other locations, says it attracted 140,000 visitors in 2017.
“We spend so much time in solitary screen-based worlds, so it is magical when people from a wide range of ages come together and solve a challenge,” said Scott Nicholson, a professor at Wilfrid Laurier University in Ontario who teaches a course in creating escape rooms.
The vast majority of escape rooms in the United States are mom-and-pop operations with one or two sites, Spira said. From chains to smaller outfits, the format is similar. A group of about four to eight people play an hourlong game that could include escaping a prison, evading a serial killer or finding a cure to a deadly disease. Once one puzzle in the escape room is solved, a clue unlocks the next challenge. Hidden doors often reveal new spaces such as secret passageways as the game proceeds.
The outcome is not guaranteed. If players get stuck, escape room staff, often in character, provide hints. The success rate varies, but only about 30 percent to 50 percent of participants escape a given room in the time allotted, Spira said.
Admission usually ranges from $20 to $45 per person, with escape rooms in bigger cities usually charging more. Some business owners earn close to half a million dollars a year, Spira said, although getting accurate data is difficult because the companies are private and do not release financial figures.
Well-designed games draw on many types of knowledge, so all players have a chance for a “hero moment,” said Summer Herrick, a co-founder of Locurio, an escape room in Seattle.
“Everyone likes to feel smart, and there is an adrenaline rush of solving a puzzle without the risk of, say, sky diving or spelunking,” Herrick said.
Escape rooms evolved from video games, like the Crimson Room and the Rusty Lake series, that involve puzzles and group adventures. The first real-life escape room was created by a company called Scrap in Kyoto, Japan, in 2007. Scrap opened an escape room in San Francisco in 2012 and now has three in the United States, which the company said about 50,000 people visited in 2017.
Pioneering U.S. companies like the Escape Game and Escape the Room can now be found in cities like Houston, Nashville and Orlando, Florida. In the early days, several developed a niche, such as the Basement in Los Angeles and Las Vegas, which became quickly known for its actor-driven horror games.
Now, many who played an escape room are creating their own. “But having $10,000, a dream and some moxie isn’t necessarily enough to make a business,” Spira said.
Successful entrepreneurs have relevant backgrounds like engineering and psychology and the ability to learn a variety of new skills, like accounting, game design and set building.
Andrew Preble, who founded Escape My Room in New Orleans, drew on his past working at a technology startup and operating a restaurant in Berlin. Preble opened his first escape room in 2015 and now has four games that revolve around mysterious events that happen to a fictional old New Orleans family called the Delaportes, inspired by Marguerite Delaporte, one of the conspirators accused of poisoning Louis XIV in the 1600s.
Preble said he knew starting a new business would be hard, “but I didn’t expect it to be as popular as quickly as it was.”
Demand was high enough that six months after opening a room called the Jazz Parlor in 2016, Preble built a nearly identical room for corporate groups and birthday parties. The average number of monthly visitors increased 29 percent from 2016 to 2017, Preble said, and his team now includes eight full-time and eight part-time employees.
Despite the rising popularity, getting a bank loan to finance the business can be a challenge, Preble said. “Lenders still don’t exactly understand what escape rooms are, so it’s difficult to assign value to this as an asset,” he said.
Escape rooms are also sprucing up related amenities like conference rooms for corporate groups or those celebrating special events.
“Part of the fun is having dinner or drinks with your friends or colleagues afterward and reliving your experience after the fact,” Spira said, who played 250 rooms in 2017 with his wife for their blog.
Stuart Bogaty, who started Trap’t in Stamford, Conn., with his wife and three daughters, opened his business in 2016 with two “clean and light” conference rooms, in addition to four escape rooms. “I had seen escape rooms that were a bit dark and kind of dumpy,” he said, adding that his attention to detail has helped draw groups from corporations like Indeed, Mastercard and Vineyard Vines.
Bogaty has not done any direct marketing to corporate groups, focusing instead on Google and Facebook advertisements and on customer service.
Word-of-mouth advertising and online reviews have been critical, he said. Strong Google reviews have had the most impact because they affect where a company shows up in searches.
“How you respond to reviews makes a big difference,” Bogaty said. “Even a bad review — if you respond to it appropriately — can help your business.”
Entrepreneurs in cities with large numbers of tourists, such as Preble in New Orleans, also draw players by leaving flyers in hotels.
Few escape room entrepreneurs can rest on their laurels, however.
“What’s good now won’t be that great in a year,” Spira said. “Companies that figure out that it’s not just about making an excellent game but creating an experience that makes customers feel good even if they didn’t escape, that’s the key.”