Recently, VT columnist and vending pioneer Allan Gilbert described an operator who was depressed over the U.S. economy – and deeply worried about his own prospects (see VT, March). Gilbert pointed out that this operator’s company remained strong, with earnings and ROI well above national averages. The operator “was facing a crisis of confidence,” Gilbert concluded, not a true crisis of circumstance. Gilbert went on to say that tough times represent opportunities for savvy operators, who increase market share at the expense of less-competent, less-aggressive competitors.
Today, America’s entire public dialog is dominated by depressing talk about how bad everything is. And yes, there are many reasons to justify (or at least rationalize) this negative view. Similarly, amusements professionals can, if they wish, point to objective facts to “justify” doom and gloom: years of soft sales, declining event attendance, smoking bans, gas prices, weaker cashboxes, etc.
Yet there are also solid reasons to be optimistic about the U.S. economy and this industry. I mean genuine optimism, not “happy talk.” The Chicago Tribune’s April 22 lead editorial declared: “…the chatter (about a looming recession) might be a false alarm. We were struck over the weekend by a punchy post from economic forecaster Donald Luskin on SmartMoney.com: ‘Economic Recovery Already Underway.’ His thesis: ‘What a difference a month makes!… Compared to the bleak expectations then, even just hanging in there would have been an upside surprise. But it’s more than that. Things actually are getting better.’”
The Trib didn’t explain how Luskin justified his optimism. But that same week, USA Today reported: “Just five months after raising a bearish warning flag, one of Wall Street’s oldest tools used to predict the longer-term direction of stocks is back in the bullish camp. Dow Theory, a market-forecasting system devised more than 100 years ago by Wall Street Journal editor Charles Dow, is signaling that the primary trend of the market, which turned down in November, is pointing up again. In a nutshell, Dow Theory turns bullish when the Dow Jones industrial average, a proxy for U.S. manufacturing, and the Dow transportation average, made up of companies that ship goods, move in tandem and bust out above prior significant highs.”
Wisely, the Trib noted that people who are determined to be gloomy will find reasons to justify their mood, no matter what. But the paper concluded: “So if the TV talking heads who spent the winter warning of a second Great Depression scared you into a bunker, it may be safe to step out in the sunshine.”
There is one surefire indicator that upbeat assessments represent genuine optimism: The self-proclaimed optimists put their money where their mouths are. When companies announce loudly that conditions are great – while slashing expo booth space, advertising, R&D and staffing – it’s happy talk. When companies say conditions are challenging, but the future will be better…then back up their words with solid investment…it’s genuine optimism.
This month, VT surveys the U.S. tavern market, which continues to face challenges from higher beer prices to fewer mom-and-pop bars. Nevertheless, the operators we spoke with declared: “We’re optimistic.” More importantly, they are backing up their words with deeds – and with money. Like leading operators everywhere, they are upgrading tavern accounts with digital jukeboxes, electronic pool tables and LCD countertops.
How are they paying for it? They’re following the Allen Gilbert prescription, raising prices in tough times. (VT columnist Frank Seninsky of Amusement Entertainment Management also urges operators to follow this course, especially by linking higher play-prices and commission splits to superior value.)
If you want gloom and doom, there’s plenty on TV and in the newspapers every single day. If you want “happy talk,” you can find reams of that too. But if you want genuine optimism, listen to those who are investing in the future.