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Museum Design

How to Make Money With A Haunted House

by Leonard Pickel, Hauntrepreneurs(R) Haunt Design and Consulting

First published in Haunt Nation Magazine 06-2013

Contrary to popular belief, the single goal of any company is to make money! The more money it makes the better its chance of survival. A haunted house IS a business, and like any other business it has to be profitable to survive. Sixty percent of all business fail in the first 3 years of operation, and that number is higher for haunted attractions.

The first question you need to ask yourself is why are you opening the haunted house in the first place. Passion is great, but passion will not pay your mortgage or feed your kids. If you are opening a business, then it should be to make money; lots of money. Yes, building haunts is fun; scaring people is even funer, but profit, lots of profit is the difference between hug success and absolute disaster! A business that is designed at its core to make money will not survive.

So do you want to make money? If so keep reading. If not, then stop right here, because the rest of this will just make you mad.

I am not trying to crush anyone’s dream or vision of what they want their haunt to be like. I am merely playing the realist and trying to show you that with some slight adjustments, you can have the haunt of your dreams without losing you house and life savings.

In haunting everything is a trade off; higher capacity decreases the quality of the experience, but decreasing the capacity means you make less money. The happy medium is somewhere in the middle and will be different for all of us, but you have to lean toward high capacity if you want to survive.

One common characteristic of successful haunts is that they own their own property. Paying rent is the same as paying someone else’s mortgage, when you should be investing in your own property. Land will never be cheaper than it is right now, so if you can, buy your property. It will actually be cheaper in the long run. Owning your property will allow you to open off season and do other events to help pay the bills. It also keeps your event in the mind of your market. You may even be able to lease out part of your building to another business in the off season and have someone else pay your mortgage!

“A haunt is never finished; you just have to know when to stop!” Money is hard to find, and you will always be needing more then you have. Holding down your costs are key to making a profit. Set a budget and stick to that budget! if you over spend in one area you have to steal from another, and that can snowball in to disaster. The marketing is usually the area that suffers the most and decreasing your marketing it the WORST thing you can do if you want to make a profit.

When you are ordering props or equipment from a supplier, order early. You can get a better price and you have a better chance of getting the product at all. Build your attraction early in the year, so you know what pieces you need rather than buying props and trying to cram them into the haunt.

It doesn’t matter how cool your Haunt is, if no one knows about it, then no one’s coming! Advertising is the single most important piece of the haunting puzzle and the hardest to write a check for. How much to spend, where to spend it? That is a whole other article, but the industry average is $2 – $3 in advertising for every person who comes through your door. If you are below that range, then buy more advertising, because you’re getting a bargain. If you are within that range, spend more in advertising; it will make you more money. If you are over that range, and not doing 30,000 people or more, then you are doing something wrong. Make some changes or consult with a marketing expert.

Once you decide that making money is your goal, then things start to fall into place and decisions are easier. “Do we build an elevator for our haunt this year?” No! It will slow capacity, (unless you have 6 of them side by side). Think about designing your haunt to give people a show on the run. Don’t stop people in a room, it’s really hard to get them moving again. Instruct you actors to scare the patrons forward. Make sure you have more than one scare in each room, so that if needed you can scare a constant line. Make them afraid to stay, not afraid not to go forward. One menacing actor standing in a hallway can kill your capacity, (and they really aren’t as scary as they think they are!). Increasing your throughput may take completely redesigning your attraction, but in the long run it will pay for itself many times over. You don’t need that much capacity all the time but make sure it is there when you needed.

One of the biggest hurdles of the haunted attraction as a business model is the short time you have to make it profitable. If you want to make money, you have to extend your season. Open earlier and stay open into November. No matter when you open, your early nights will be slow, but that doesn’t mean you hold off until mid October to open. Use your new advertising budget and discounts to drive people to your event early, then word of mouth will carry you through Halloween.

Be open the weekend after Halloween as well, even if its seven days out. Attendance will be slow, so discount your tickets, use some of that advertising to promote a special event, like full contact or flashlight tours. It costs you the same in construction to be open one day as it does 30 days, so start early and end late. Train you market that you can go to a haunt in September and November. It may take some time, but in the long run you will thank me. This does not mean be open every night. Friday and Saturday is plenty unless you are maxed out. Pick up Thursday if you must, and the Sunday before Columbus day, but that is it. Haunts are a date thing and people don’t do dates on weekdays. People will come when you’re open. Decrease your costs by increasing your capacity and decreasing your off nights.

Use your web site to drive interest and sell stuff. Very few haunters spend enough money on their web sites, and web sites are cheap compared to an advertising purchase. If your web site doesn’t make YOU say “Wow,” then hire someone to make it better. (You do HAVE a web site, right! I am shocked at the number of haunts that don’t.)

Some things you should be doing are just free money. If you have an 9,000 square foot haunt, you can charge about $20 for a ticket. If you have three 3,000 square foot haunts you can easily get $25 for the combo ticket. Your costs to build and operate are the same for both approaches, but breaking the show into more smaller pieces is $5 per head directly to your bottom line. This Multi-Element approach breaks up the queue line, relieves bottlenecks, increases throughput, increases concession sales, gives you more to promote and higher perceived value for the event.

A small percentage of ticket sold on line are never redeemed. Advance sales is money in the bank before you even open, and it is more convenient for the purchaser. Go one step further and implement a Timed Ticketing system. It doesn’t matter how good you show is, if you make people stand in line for hours, they are not going to have a good experience. Sell tickets in showings like a movie theater. Have your advertising push people to the web site to buy tickets that are time dated. As hours sell out, it will increase impulse buying and push people off onto slower nights. No more waiting in long lines will increase patron satisfaction, be easier on your actors and let you close on time every night.

So ask yourself the question, “Do you want to make money?” if so, then start looking for a building or property to buy. Set a budget, and stick to that budget! Advertise, advertise, Advertise! Extend your season and increase your throughput so you can handle all of these new customers you’re going to get. Break you haunt into more smaller sections to increase perceived value and increase ticket price. Spend some money to drastically increase the wow power of your webs site and sell timed tickets online. Remember, “If you don’t make money, then you don’t get to play anymore!”

Owner of Hauntrepreneurs(R) Haunt Design, a consulting firm for the Haunted Attraction Industry, Leonard Pickel built his first haunted house in 1976 while still in college. Since that time he has designed over 100 original and creative Haunted Attractions including Haunts for Madison Square Garden, Universal Studios Florida, Six Flags Great America, several Six Flags parks, Morris Costumes and SCREAMS Terror Park. Leonard’s creative accomplishments include design and sales of the industry’s first turn-key Haunted House ‘kits,’ and the first adaptation of “Field Theory” (triangular grid system) in a Haunted Attraction.