Robert Evans doesn't have to watch the news to find out about economic jolts that might cause the American consumer to pause. He just has to look at his cycling race registrations.
"Every time something major is announced, like tariffs, or an attack on another country, our event registration tracks like the stock market. People pull back for a minute and pause and take a wait-and-see attitude," said Evans, CEO of Cycling Quests, which organizes high-end road races.
He says that wait-and-see attitude is now in evidence.
"Sometimes it rebounds quickly, other times it stays off by 20-30%. We notice this is more so with our events that have a lower entry price point and targeted more down market," Evans said, noting that events with higher price points seem more insulated. "But we are starting to see a downturn there as well."
The more an event is tied to travel and sports tourism, the more increases in airfares and travel costs reduce demand. For every "fun stop", there is a multiplier effect. Even for mid-sized sporting events in smaller cities like Boise, Idaho, or Provo, Utah, each out-of-town participant represents roughly $900-$1,000 in ancillary economic activity — meals, lodging, gas, and incidental spending — on top of registration fees. Half of participants typically stay at least one night, with 60 percent traveling more than two hours to compete.
"The stakes for host communities are significant. When consumers start skipping events or choosing closer-to-home alternatives, that spending evaporates while promoters' fixed costs remain — meaning the economic hit falls hardest on local restaurants, hotels, and retailers, not just the event organizer," Evans said.
The same economic impact applies to truly local events. People who opt out of going to an escape room may just stay home, skipping the dinner they would have stopped to eat beforehand. This deprives the local eatery of revenue and the waitstaff of tips.
Debit and credit card spending was up in March, the most in more than three years, according to Bank of America, with a 16.5% jump in spending at gas stations the biggest factor, but there also was growth of 3.6% excluding gas. Changes in tax law have pushed up the average IRS refund this year by over 11%.
However, Americans are having less "fun" as high gas prices and uncertainty shadow their discretionary spending. Impacts are felt in dollars spent on escape rooms, bowling alleys, and arcades.
"Placer.ai data confirms a recent shift in consumer behavior: shoppers are decreasing their visits to discretionary retailers and entertainment venues, instead prioritizing consumer staples to stretch their household budgets," says R.J. Hottovy, Head of Analytical Research at Placer.ai.
Bank of America CEO Brian Moynihan told CNBC on Wednesday, "The consumers are spending, the credit quality is very good and improving. ... We all face that same uncertainty, but right now, the U.S. companies and consumers are doing well."
The University of Michigan's monthly survey of consumer sentiment tumbled to 47.6, down 10.7% from the March survey to its lowest on record.
Bowlero operates over 350 bowling entertainment centers throughout the U.S., and its traffic was down 10.6 percent on average in March, according to Placer.ai data.
Dave & Buster's, with 170 adult eatertainment locations across the U.S., has seen its traffic slide 4.5 percent in March.
Main Event, owned by Dave & Busters, saw its traffic decline by 7.6 percent in March, according to Placer.ai data.
Escape rooms were down 6.7 percent on average in March.
Movie theaters have bucked this trend, buoyed by a strong slate of new releases like Project Hail Mary and The Super Mario Galaxy Movie, Hottovy said.
Dave & Buster's stock has been under pressure since mid-2024, with recent geopolitical issues compounding negative investor sentiment. On a March 31 earnings call, CFO Darin Harper said, "Obviously, there's a lot going on from a macro perspective, from gas prices, from consumer sentiment and the like." He noted it was difficult to evaluate macro impact versus holiday timing shifts.
Hottovy says recent data shows a definitive impact from the war, with visits declining year-over-year since mid-February.
Mark Flint, CEO and co-founder of the Escape Game and the Great Big Game Show, said his company anticipated some year-over-year decrease but impacts are less pronounced, with April numbers up so far. "A great game played in a great environment with those you love is valuable to our guests all the time, and even more so when things get tough,"
Mark Johnson, faculty fellow at Wake Forest University School of Business, said this is textbook consumer behavior when gas prices rise. Discretionary spending pauses first but tends to rebound quickly once pressures ease.
On Friday, President Trump indicated the war was nearing an end, and Iran opened the Strait of Hormuz, sending oil prices down by as much as 9%. But by Saturday morning, Iran imposed control over the waterway again amid gunfire.
A recent Ernst & Young Parthenon survey shows 27 percent of consumers pulling back on discretionary spending. Will Auchincloss said households are becoming more selective, prioritizing essentials.
Evans at Cycling Quests describes a long recovery from Covid halted by tariffs. "As long as there is geopolitical chaos, there will be chaos in the fun economy as well, while people hesitate on whether they should save their money or enjoy life as normal. It's unpredictable," Evans said.
