When it comes to managing and maximizing earned income from food services, catering, event rentals, and retail stores, Association of Zoos and Aquariums-accredited institutions have different perspectives and unique approaches. Yet, interviewees for this story universally addressed the importance of incorporating their mission into these earned income streams.
Several also mentioned the importance of value alignment with their outsourced vendors. All were contract operated, although several had self-operated in the past, including the Texas State Aquarium in Corpus Christi, Texas, which transitioned to contract food service operations in late February of 2022. Most oversaw earned income from food service and retail, while one institutions had these revenue streams reporting to different individuals.
Each of these institutions had a different approach to managing these earned income streams. Some were hands-on, working with their vendor and understanding the “ins and outs” of the operation, while some were less so. Tracking key metrics or performance indicators (KPIs) on a regularly scheduled basis and an open dialogue with the vendor or internal team were two common themes echoed throughout.
Visitor food—including cafés, restaurants, and kiosks—are important to the guest experience, but can be challenging to manage from a capacity perspective. The ebbs and flows of visitation require active management to maximize revenues and profitability. Michele Smith, chief financial officer at Woodland Park Zoo in Seattle, Wash., works closely with the Zoo’s contract food service operator to scale operations depending on Zoo attendance and time of year. Smith and her vendor use a data-driven approach to determine when and how to deploy mobile carts throughout the Zoo.
Rick Johnson, director of finance and administration at the Seattle Aquarium in Seattle, Wash., noted the Aquarium does not have excess space in which to deploy carts, but characterized the new outdoor dining outlet on the Aquarium’s deck, which debuted in 2019, as very successful and a good solution to heavier summer visitation.
Justin Sefcik, vice president of operations at the Texas State Aquarium, noted that satellites drive additional revenue but can also serve as a “relief valve” on busier days to relieve pressure on the main café.
Evan Barniskis, associate vice president for the Aquarium at Mote Marine Laboratory in Sarasota, Fla., said the Aquarium does not have satellite options at their existing facility but does expect to utilize them once the new Mote Science Education Aquarium opens.
Regardless of the solution, communication with the vendor or operating team is a key component of managing capacity which in turn impacts revenue.
Understanding visitor food trends and KPIs is an important step in managing these business activities. Johnson shared that the metrics the Seattle Aquarium tracks from a visitor food perspective are the per capita sale and net concession revenue. Smith from Woodland Park Zoo tracks the per capita sale, top sellers, check average, and more recently has been studying price elasticity utilizing data from her vendor. Sefcik shared that when the Texas State Aquarium was self-operated, they did track the per capita sale by station, but he expects to develop new metrics to track with their contract vendor. Barniskis shared that Mote has not historically tracked many metrics except revenue because visitor food has not been a meaningful source of earned income, but he anticipates that will change in the future. AZA commercial member JGL Consultants has found that tracking metrics or KPIs on a monthly, quarterly, and annual basis provides consistently better insights into trends and opportunities.
Technology has become an increasingly important element in foodservice. The Woodland Park Zoo, like most visitor attractions, started rolling out technological solutions during the pandemic as a way to remain contactless. Smith has seen a marked increase in the use of technology throughout the Zoo, including the use of QR codes. The Zoo is now 99 percent digital and has no plans to go back. Smith shared they have seen significant increases in check averages as a result of the use of technology—in some cases by as much as 50 percent. The Texas State Aquarium’s new food service vendor just recently introduced mobile ordering. They have QR codes on the website, on maps, on program schedules, and located throughout the facility.
The staff love it, and Sefcik has found “more of an early adoption among leisure travelers than expected.” While no hard data exists yet, Sefcik is positive about the potential.
Tera Greenwood, vice president of business development for foodservice and retail vendor Service Systems Associates, also an AZA commercial member, echoes Sefcik’s sentiment; SSA has seen guests on average spend “38 percent more when ordering from a kiosk and 68 percent more when ordering from a mobile device.”
The Seattle Aquarium has implemented pre-order technology in the last few months and does not yet have results, but Johnson has heard anecdotally that Aquarium staff appreciate the ability to order in advance and he expects to see a bump in average spend as well. The Seattle Aquarium is also utilizing the strategically placed QR codes throughout the facility to “counter the challenging location of the café” on the second floor.
Mote will be incorporating technology in their new café as well, including pre-order, QR-codes, and self-service kiosks, and is excited about the potential. Virtually all of the visitor attractions JGL works with nationwide are incorporating technology into their operations; the ROI and positive impact to the guest, and more surprisingly, staff experience make technology a “must have.”
Event rentals can be a meaningful portion of an institution’s earned income.
The Woodland Park Zoo actively seeks event rentals and Smith characterizes the income as important to the Zoo. The Zoo’s corporate clients include Facebook, Amazon, and Google, all of whom are interested in outdoor locations and the Zoo’s conservation message. Smith, who focuses on driving revenue on a daily basis, said she “is always looking to recreate an extraordinary experience that delivers the wow and ties to conservation to inspire people to make an action.”
She shared that the Zoo now pursues buyouts which have become significant revenue drivers. In 2019, the Zoo hosted one corporate buy out; in 2022 they will have three. Smith said “each buyout represents one weeks’ worth of revenue for the Zoo.” She also noted there are sponsorship and donation opportunities associated with these buyouts.
Johnson shared that the Seattle Aquarium is focused on aligning its conservation message across all revenue streams as well. The Aquarium’s vendor added the option to purchase carbon offsets to its catering menu recently and has found strong guest interest. JGL recommends organizations approach their event rental programs as a business and analyze the program profitability on a regular basis.
On the retail store front, most interviewees tracked metrics with their vendor on a regular basis. Smith reviews monthly KPIs with her retail vendor including capture rate, check average, product mix, and top sellers. Smith said she examined “the why behind each metric” to understand trends and inform decisions moving forward.
Johnson had quarterly meetings with his vendor and tracked the per capita sale along with net commission revenue. He shared that “per caps have been amazing recently” and that the Aquarium had several record days this winter. All interviewees expressed the importance of aligning the retail stores with conservation messaging.
Technology is prevalent in retail operations as well. All interviewees have an e-commerce platform and several have plans to experiment with kiosks and contactless checkout.
According to Greenwood with SSA, they have found an “89 percent increase in spending on e-commerce as compared to in-store.” While e-commerce will never rival traditional in-store purchases, it is a great mechanism to add incremental sales and continue to promote the mission and message following a visit.
Everyone interviewed is positive about future earned income potential from these revenue streams. Johnson is bullish about future revenue growth in all areas. With the upcoming Aquarium expansion, he expects “visitorship will increase from 800,000 to 1.2 million.” The new Ocean Pavilion will incorporate timed ticketing and Johnson hopes visitors waiting for their entry time will visit the café and retail store. The Aquarium has had a surge in event rental inquiries since mask mandates were lifted with 45 weddings booked for this summer already.
Smith has mapped out an earned revenue plan for the Zoo and meets bi-weekly with other Zoo stakeholders to ensure the plan is on track. Smith acknowledges the retail store per capita spend has increased in the last two years and believes with the incorporation of dynamic pricing and strong management these KPIs will remain strong.
Sefcik, with a recent move to contract operation, is already seeing improvement in metrics and believes Texas State Aquarium will be better placed to take advantage of previously underutilized assets. He and his team are also implementing a plan to increase the volume of alcoholic beverages sold in the café. Barniskis looks forward to the opening of the brand-new Mote Science Education Aquarium and with much higher projected visitation, a well-located café, retail store, and a large multipurpose event space, it is likely that earned income will play a much larger role than it does today.
Each of the institutions discussed above take a different approach to managing these important earned income streams. Developing a plan and reporting structure while being open to new ideas and techniques to promote mission alignment are common themes among those interviewed and others JGL has worked with nationwide. Most importantly, we encourage institutions to talk with one another about their efforts in earned income. Sharing what has worked well and what hasn’t worked so well benefits everybody and will continue to drive this vital part of the visitor experience.
Top Photo Credit: © Mote Marine Laboratory and Aquarium
Second Photo Credit: © Woodland Park Zoo
Third and Fourth Photos Credit: © Texas State Aquarium
Tracy Lawler is president of AZA commercial member JGL Consultants