Dive Brief:

• Topgolf Entertainment Group will open its first Lounge by Topgolf concept, an upscale bar and restaurant and a virtual gaming experience, according to a press release. The 9,200-square-foot Lounge by Topgolf will be located in Kirkland, Washington, and is part of a 1.2 million-square-foot mixed-use development. 
• The concept includes locally-curated dishes, such as Tableside Nachos, Truffle Chicken and Pig Pile, as well as craft cocktails and spirits. 
• It will have four entertainment bays, a VIP bay, expansive outdoor patio and private event space. It also allows guests to play 80 digital championship golf courses using a microchipped golf ball and simulator screen, Zombie Dodgeball, hockey, baseball and football challenges. 

Dive Insight:

Eatertainment has taken share from the casual dining segment for about the past three years, Punch Bowl Social CEO Robert Thompson told Restaurant Business. Technomic estimates that 70% of consumers prefer to visit eatertainment formats versus a traditional casual dining restaurant for group occasions. The spread of eatertainment concepts was also recently featured in CBRE's report highlighting eight retail trends. 

The reason? The entertainment piece — the golf simulators, Skee-Ball, bowling, karaoke and cooking classes — gives consumers a reason to go out to eat, versus ordering the now-widely available delivery or takeout. Over 20% of consumers are willing to pay more for these venues as well.

The category's growth has been driven both by social media and intensifying competition, Mike Kostyo, senior publications manager at Datassential, told QSR Magazine. This is why brands like Topgolf, Punch Bowl Social, Spin, City Winery, Barcade, Main Event and Pinstripes are not only growing, but differentiating themselves to stand out, as is the likely case with Topgolf's Lounge launch. 

Topgolf also recently opened its Swing Suite at the Four Seasons Hotel Houston, which has tripled revenue for the hotel chain. The company has been opening smaller locations in markets with populations of 100,000 to 500,000. A typical Topgolf can take up to 13 acres, so these smaller formats could help the brand expand more rapidly.

But it's certainly not alone, Punch Bowl Social wants to jump into the hotel space and is eying malls for its Punch Bowl Life concept, which will focus more on gaming and offer classes. Thompson told Restaurant Dive that a Punch Bowl cruise is also a possibility: "Our approach to the world is to be the master brand," which, he adds, appeals to millennial and Gen Z consumers.

And while the social piece generates traffic, the establishments themselves make most of their money — 75 to 80% of revenue — from food and beverage, which explains why Topgolf Lounge is especially focused on the culinary piece. Punch Bowl Social and Pinstripes have menus focused on high quality food, while Dave & Busters has been revamping its menu of late to add more premium items.

For now, Topgolf has about 50 locations open, while Punch Bowl Social has about 20 units and Pinstripes has 13. This means there is plenty of runway here to meet increasing demand, and competition should get even more interesting in the category.