Breakout business: LIers flock to escape rooms

Long Islanders have a growing interest in a form of entertainment that places as many as 10 people in a room decorated to look like a jail cell or a dungeon or a mad scientist’s laboratory. It challenges players to free themselves from the confines of the escape rooms by using clues to solve puzzles.

Entrepreneurs are renting vacant retail, office and industrial spaces and turning them into a variety of imaginative escape rooms. The number of Long Island escape room locations has grown from none less than four years ago to at least 16 year-round locations, often with multiple escape rooms per location. There are also seasonal “pop-up” escape rooms. The business is also growing nationally and overseas.  

The appeal for players, who typically pay $25 to $35 for the experience, is entertainment that is equal parts puzzle-solving, team-building and immersive theater. Participants range from preteens to older adults.

For entrepreneurs, escape rooms have been attractive businesses to open. They say that startup costs range from $100,000 to as low as $10,000 for a bare-bones operation. The businesses have low overhead costs, and a relatively fast return on investment that has allowed some owners to quit their day jobs in less than a year.

One challenge for entrepreneurs is that escape rooms are becoming more expensive to outfit and operate as the market grows more crowded and consumers seek more immersive experiences. As with most fast-growing markets, there will at some point be a shakeout, experts said.

“Likely you’re going to see more of these open in the next two years, and you’re going to see a bunch of them close,” said Shawn Fischtein, a former analyst with the Canadian Securities Institute and the lead game developer of Escape Games Canada, a consultancy and escape game operator. In Toronto, he said, the industry grew from a couple locations in 2014 to around 70 the following year, then shrank to around 30 today.  

Escape rooms, also called escape games, are, in effect, mystery games played face to face with others. Typically an operator will offer multiple themes at a location. Escape room employees, referred to as game masters, lay down the rules and present the premise or story behind a room’s challenge. Players enter the decorated rooms and have 60 minutes to discover the clues, solve myriad puzzles and, if successful, “escape” before time runs out.

The only true stakes for players are the bragging rights that come with solving the mystery in the allotted time, even if a game’s premise may call for unsuccessful player groups to be hunted down by a serial killer, sealed away forever in a cursed Egyptian tomb, or locked up for life in a New York City jail.

“The reasons escape rooms are popular is that they are live-action gaming experiences, where people get to do something like what they’ve seen on the movies or on TV,” said Scott Nicholson, professor of game design at Wilfrid Laurier University in Brantford, Ontario. The cooperative nature of the games, he said, means that “everyone is able to be the hero at some moment.”  

In the United States there were estimated to be more than 2,300 escape room locations in the second quarter of 2018, up from an estimated two dozen in 2014, according to Room Escape Artist, an online resource and escape game review site. Precise data are hard to collect because the industry is fragmented among many small operations.

Room Escape Artist, run by enthusiasts David and Lisa Spira of Weehawken, New Jersey, is one of the few U.S.-based sources of industry figures.

“By and large, this is an industry of independent small businesses, which is also why there isn’t an overarching organization,” said David Spira, who said he has played over 650 escape games.

Escape rooms are estimated to generate $1 billion in revenue in the United States, and owners — depending on the size and sophistication of their operation — can bring in $7,000 to $150,000 a month in revenue, Fischtein of Escape Games Canada said.

Many owners decided to open their own business after visiting an escape room, Fischtein said.  

Siblings Cat Dunn and Efren Santana, co-owners of Epic Escape Rooms Long Island, opened a horror-themed escape room — Killer Feature — on the second floor of a mixed-use office building in West Hempstead.

Dunn, who previously worked in upper management in the freight forwarding industry and then as a consultant, decided to try her hand at the business after visiting several escape rooms in Manhattan and Long Island.

“I was looking to open up my own business,” Dunn said.

The siblings opened in 2017.  They have expanded to five escape rooms at their West Hempstead location.

“It’s something that can be profitable in a short amount of time,” Santana said. “You spend a lot of money on building your rooms, but you’re not in the red that long. You’re definitely not rich overnight, but you’re also not in debt forever.”

Like many operators, they design the puzzles and stories for their rooms. They plan to open a second location in Brooklyn.

“This is the hardest we’ve ever worked,” Dunn said. “People think it’s very easy and lucrative, and let me tell you it’s a lot more work than what we thought.”  

Startup costs include rent, props and interior renovation, industry experts and owners said. For some, recouping that initial capital has happened as quickly as one month after opening.

“It’s profitable,” said Daryl Davis, secretary of the Association for Room Escapes of North America, a nascent industry trade group with 80 members representing more than 100 locations in the United States. “The numbers are incredibly alluring.”

Marketing isn’t a big cost. “As a rule, the owners know that if they do a good job on social media, they can drive the customers to their locations,” Davis said. With the aid of Yelp, TripAdvisor and Google to attract customers, owners can set up shop in cheaper office buildings and industrial areas as opposed to expensive retail locations with foot traffic.

“Once you’ve built the room your only overhead is really your game master, which is your employee, and your standard utilities and rent,” Davis said. Owners “view this as a social media, big-data marketing effort.”  

For Janice Galizia, social media and internet traffic played a major role in her company’s viability.

In June 2015, Galizia opened Challenge Escape Rooms in Bayside, Queens, with her sister and husband. Galizia, a psychologist, said they had no formal business experience. Months after opening, she was able to quit her job, she said. (She has a small private psychology practice.)

“From the very first month we were in the black,” said Galizia, whose business expanded to include two more locations — Franklin Square and Rockville Centre — in less than a year, and another in Patchogue shortly after. “I had never imagined quitting my job within six months. It was scary and extremely surprising.”

Galizia, who moved to Long Island from Bayside after opening the business, said its growth was greatly aided by web traffic.

“We kind of went all in on the creative piece with this without knowing what we were getting into on the business end,” she said. “We had gotten bookings just with posting our website. Marketing, in terms of financial cost, has been very minimal.”

Tim Kennedy, who opened St. James’ Escape Zone Long Island in 2016, also has benefited from social media.

He uses Groupon to attract players to his business, and regularly posts on social media.

“Groupon is great in terms of marketing because it’s essentially free mass marketing,” he said.

“I opened in December, and I was able to leave my career job in February,” said Kennedy, a former executive manager at Target. Kennedy was the sole employee for the first nine months and said he slept four hours a night as he balanced both his career and the new enterprise.  

Alissa Torres, owner of Mineola-based Can You Escape? LI, opened one of the first escape room businesses on Long Island, in early 2015.

The former event planner came up with the idea to open an escape game business after visiting one outside the United States while on vacation with her husband and three children.

“It was really right up my alley,” said Torres, who started the business out of a Mineola storefront. “It was really hard finding a space, because you would go to the town and say, ‘I want to lock people in a room’ and they would say, ‘Are you crazy?’ ” Legal fine point: Escape rooms aren’t actually allowed to lock people into a room.

Since opening in early 2015 with one room, Torres’ business has grown to include six game scenarios at the Mineola flagship location, a seasonal pop-up along the boardwalk in Long Beach, a location at the Broadway Commons Mall, and a bus outfitted as a mobile escape room.

“When we opened up there was nothing that you could find anywhere” in terms of resources, she said. “Nowadays, you can buy a complete room if you wanted to. It was only a few years ago, but things have changed so much in the industry since then.”

A large part of that change has been an increase in local competition, which operators say helps grow the overall consumer audience but makes the business more challenging.

“It’s not as easy,” Torres said, adding that her most recent room, an abandoned factory motif, took more time and money than previous offerings. “Now that people are more educated on escape rooms they’re looking for more, they’re looking for better, they’re looking for a better-quality room.”

Nate Martin, co-founder of Seattle-based Puzzle Break, one of the first U.S. escape rooms, said his company now has “seven-figure” revenue.

Martin’s company has two locations on the West Coast and license agreements with locations in Syosset and Newton, Massachusetts. Starting in 2015, his business began installing escape rooms aboard Royal Caribbean cruise lines.

“To be a long-term profitable business . . . you have to put your profits right back into the business,” Martin said.  

Maria Reyes, general manager of Puzzle Break’s Syosset outfit, said the licensed operator of that facility is building a location in Smithtown and weighing another in Long Island City.

Reyes said the Syosset location has found a niche servicing children’s parties and corporate team-building.

As competition has grown nationally, the number of escape rooms that go out of business also has grown.

“We’re expecting to see that trend grow over the next year,” Spira of Room Escape Artist said. “For the most part, what we’re seeing is a culling of the bottom end of the market.”