Who Will Rise to the Top in the Escape Room Market?
After a slowdown and closures related to COVID, escape rooms are recovering, with increasing competition. Globally, the escape room industry is estimated at $8 billion in 2022, with estimated annual growth of 15%. A different source estimated escape rooms in the US at $651 million in 2023, with growth of 12%. Escape rooms are a good example to help us puzzle out a competitor analysis template.
After taking off in late 2015, Google searches for the term “escape room” grew steadily, peaking in December 2018, then stabilized in 2019. When COVID hit in 2020, searches fell by over 200%. Searches rebounded in 2021, though still below 2019 levels and are holding steady in 2022 and 2023. Since many players use online search to find an escape room, the number of searches is a proxy for demand.
Competitor Analysis Template:
Why Escape Rooms?
We are casual escape room players, and our personal use of escape rooms follows this Google search pattern, as we did not go at all in 2020 and have averaged two to three escape rooms a year in 2022 and 2023. We’re also branching out to escape rooms while traveling in Marbella, Spain and Boston.
When we first started trying out escape rooms in 2019, the choices in Los Angeles seemed to be mainly independent, single-location options. We went to Lab Rat at Hatch Escapes, at that time rated #1 in the area. Our most recent escape room experience was three weeks ago at Maze Rooms Los Angeles to celebrate a family birthday with friends.
Today, there are so many choices, with consolidators and reviews. The growing escape room market is attracting considerable competition.
Competitor Analysis Template:
The Evolving Market
As examples of how the market has matured and become more competitive, the average number of rooms offered at each facility increased from three to six and the majority of facilities (68%) now offer at least three rooms. Booking trends are towards online, making online marketing important for operator success. These market stats are important to know in a competitor analysis template.
Even though an estimated 66% of escape rooms are single-facility businesses today, competitive pressures favor the growth of larger facilities and chain operators, driven by marketing economies and stronger business models. These larger chain operations include competitors like Escapology and PanIQ.
With the many choices, it can be hard for a newer player like me to find a good escape room and to assess if it is a good fit. That presents a business challenge for escape rooms seeking to attract new customer segments.
Competitor Analysis Template:
3 Escape Room Directories
Escape room directories are one tool in the competitor analysis template for this category. They provide search and reviews to help make finding a suitable escape room a little easier. And, since many of these directories also see the escape room operators as business to business customers, they also promise marketing support to escape room operators through their search, just as Yelp promises marketing support to local business operators in many categories.
As a consumer, there are many escape room directories to consider, with no clear winner. Three escape room directories that came up readily on my search browser are:
- Room Escape Artist
- World of Escapes
For each of these, I considered the number of locations, the availability of reviews and whether or not it was possible to find Lab Rat in their listings.
Room Escape Artist captures over 1,800 locations and offers Top 25 reviews and regional recommendations, along with industry statistics. For instance, its blog, first published in 2019 and updated in 2023, provides escape room recommendations for Los Angeles. According to this source, Lab Rat still rates as #5 in the area.
A second escape room directory is escaperoom.com. In addition to a search feature, this site boast 6,000 rooms and leverages blogs, such as “Best Escape Rooms in Los Angeles!” and uses the same blog approach for Phoenix, San Diego, Chicago, Las Vegas, Houston, New York City, Seattle, and Austin.
Recognizing that geography is everything in Los Angeles, escaperoom.com breaks out different geographic areas of Los Angeles, including Beverly Hills, Burbank, North Hollywood, Universal City, Central LA, Mid City Hollywood, Koreatown, and more. There are also more general areas of North LA, Central LA and South LA. While Lab Rat makes the escaperoom.com list, it’s listed under Mid City, where there are no other listings, so it seems doubtful a reader would find this. In general, it’s hard to navigate the lists quickly and compare.
The third directory we examined is World of Escapes, which showcases 22,000 escape rooms in 15 major US cities and many more geographies, judging from its map. For instance, it offers ratings and information on over 50+ escape rooms in 15 US cities:
- Dallas Fort Worth
- Las Vegas
- Los Angeles
- New York
- San Francisco
- Seattle, and
- Washington D.C..
On the first pass, the World of Escapes directory is appealing. It’s easy to search escape rooms by market in categories of interest, some of which clearly target specific customer segments. These categories include big groups, with actors, beginners, ADA compliant, challenging, detective, adventure, historic and more. There’s also a prominent rating (from one to five stars), and other basic information, such as the length of the escape room (typically 60 minutes), the number of players, e.g., from two to 12 and a difficulty rating as depicted by the number of keys.
In Los Angeles, the World of Escapes directory top results for “Popular” escape rooms (not online) include multiple games from:
- The Escape Game (e.g., The Depths, Prison Break, Gold Rush, The Heist, Mysterious Market, TEG Unlocked: The Heist – Vol.1)
- UNLOCKED Escape Room (e.g, The Return of the Magician, UNLOCKED Arcade, Against Us)
- PanIQ Room (e.g., Insane Asylum, Wizard Trials, The Haunted Manor)
For “popular,” there are a very limited number of games featured. In Los Angeles, there are only around 12 in-person escape rooms in this category, while the other popular choices are a limited number of online games and kits.
World of Escapes is clear about its pay-for-placement approach, as stated on the partners page of its website:
“With more than 22000 escape rooms featured in multiple cities all over the world, World of Escapes is the biggest escape room directory website. Our partnership program offers premium placement in the ‘Popular escape rooms’ section at the top of a city page. With the top placement, your escape room will be showcased to all of our website visitors looking for escape room games in your city.”
Excluding the popular filter for Los Angeles, many of the same providers and games rise to the top of the page listings for World Escapes. Scrolling down further, among the 323 games on the site, there are games from other providers, such as:
- 60outEscapeRooms (e.g., Alice in Wonderland, Doctor Psycho, The Mystery of Senator Payne)
- Escape Room Era (e.g., Zoe)
- Escape Hotel (e.g., Daycare- Chapter II)
- Escapology (e.g., 7 Deadly Sins, A Pirate’s Curse)
- Maze Rooms (e.g., Lunar Mission, Pirate Bay)
- Mission Escape Games (e.g., Escape the Darkest Hour: Torture Chamber)
- Planet Escape Room (e.g., Wise Guys)
- Quest Room (e.g., Resurrection, Project Minotaur) and several other providers.
While I wasn’t able to find Hatch Escapes and the Lab Rat game on the World of Escapes site, I may have missed it, as there is no ability to search by name of the game or the operator.
Suffice it to say, that there is still an opportunity for a better escape room directory after looking at these competitors.
Competitor Analysis Template:
3 Escape Room Multi-Location Companies
According to Room Escape Artist, the 8 largest US escape room multi-location companies based on July 2022 locations are:
- 1. Escapology – 53 facilities, “has continued to grow over past two years”
- 2. Breakout Games – 36 facilities, “has shrunk slightly”
- 3. All in Adventures – 28 facilities, “has shrunk slightly”
- 4. The Escape Game – 23 facilities, “has expanded”
- 5. Escape the Room – 22 facilities, “has shrunk slightly”
- 6. The Great Escape Room – 15 facilities, “change not noted”
- 7. PanIQ Entertainment – 12 facilities, “change not noted”
- 7. Red Door Escape Room – 12 facilities, “change not noted”
Understanding these high-profile escape room competitors is a critical component of a competitor analysis template.
Based on reported number of locations and growth, Escapology is the strongest competitor post pandemic. With 53 US facilities in July 2022, Escapology is two to three times as large as most other competitor chains.
Escapology opened its first facility in Orlando, Florida, where it “became the number one attraction on Trip Advisor.” This example highlights the link between tourists and escape rooms that I’ve personally participated in.
The Escapology company began franchising in 2016. Today, their stated growth goal is 200 locations, with 15 to 20 corporate-owned and the balanced franchised. Founded by Simon Davison, Escapology worked with Peninsula Capital Partners in 2021 to secure additional capital for growth.
A second competitor that grew since COVID is The Escape Game. The Escape Game had 22 US facilities in 2023, ranking fourth. With its headquarters in Nashville, Tennessee, The Escape Game is heavily featured on the World of Escapes directory, e.g., in Los Angeles dominating the top listing spots on a paid basis.
The Escape Game has a concentration in California with 6 cities featured: Los Angeles, Irvine, San Diego, San Francisco, Rancho Cucamonga and San Jose. They also have multiple city locations in Texas, Ohio, Florida and Tennessee, along with single cities in other states, e.g., Atlanta, Georgia.
In 2023, The Escape Game expanded into a new business area different from escape rooms: an interactive game show experience with a live host in Nashville called “The Great Big Game Show.”
A third competitor is PanIQ, with 12 US facilities in 2022. Like other competitors, it claims to be the “fastest growing escape room franchise in the country.” PanIQ was established in 2014 and began franchising in 2017. Headquartered in Los Angeles, California, PanIQ has raised funding from Hiventures in 2018, 2020 and 2021.
PanIQ touts “Generation 3” technology for its escape rooms, with no keys and locks as well as an immersive experience. CEO Akos Gabossy expounds:
“The other thing is we try to spend a lot of focus on is our back-end system – we have our special hint kiosk system. We develop all these kinds of tools for our franchises so they can run their businesses smoothly. Plus, again, in Las Vegas we are trying to add a bar to our location which is going to be a very big challenge. Since we have 8 different themes at one location that means we are going to have at least 50-60 people there at one time, which obviously makes sense to serve them food and beverage. So we are trying to create a movie theater experience at these mega locations, which have multiple themes, normally more than 5, plus there’s food and beverage and the location of these venues are prime. We are trying to be in locations where people like to hang out, and get involved in good neighborhoods.”
Despite their differences in size, Escapology, PanIQ and The Escape Game have much in common in their business approach. While I like escape rooms as a consumer, the investor in me is unconvinced that these companies have a clear brand positioning, superior marketing or a winning business model. For any of them to truly become the “fastest-growing,” their leaders should put more focus towards a competitor analysis template.