Haunted House Economics

Forty years ago, with nine haunted houses located near each other, Kansas City was known as the haunted house capital of the world.

Haunted House Economics

History

Our story starts at the Edge of Hell. As Kansas City’s first famous haunted house, the Edge of Hell was and still is a family business. When he was a five-year-old, in 1975, a current executive’s job was to lie in a coffin. Fast forwarding to 2019, the Beast, a Kansas City haunted house, won (the coveted?) #1 rank as the scariest in the country.

During October 1978, you would have seen this ad:

Beginning as converted mansions, during the past 50 years, haunted houses have moved to multiple story buildings. Reputedly (I have not been to any) they terrify us with computerized special effects and animatronics. At Edge of Hell, you could have run into a live cougar (on a leash) until the city stepped in and said no. Still, if you go to Kansas City, Edge of Hell legend the Ratman is still around:

Finance

As an entrepreneur, a haunted house venture could be low on your list. To open the average haunted house, you will initially need approximately $250,000. Because banks traditionally are uninterested, the money will come from investors. If they know about haunted houses, they first might ask you if you can accommodate 500 to 1,000 people an hour. Popular during several weeks, their goal is 10 thousand people a year.

Still, America Haunts tells us that there are 1.2K haunted attractions that charge for admission and three thousand charitable enterprises. In cities with pricey real estate, running a haunted house is prohibitively expensive. For that reason, Washington D.C. has none and California has many fewer haunted houses than Kentucky and Missouri.

As a market, haunted houses tend to be small businesses:

One successful venture is the Bates Motel. Located on what was a family farm in Pennsylvanis, Bates Motel customers pay $45-$50 for the haunted house, the haunted trail, and a hayride. Labor intensive the operation, at its peak, needs 340 employees.

Below, you can see why fake blood is one major expense:

Our Bottom Line: Halloween Economics

Rebounding from the Covid dip, last year’s Halloween spending touched record highs that this year’s outlays are expected to exceed:

My sources and more: Always interesting my Hustle email inspired today’s post. From there, the Kansas City Public Library told more about the city’s haunted house fame as did “America Haunts.”  Then, the ideal complement, the NRF (National Retail Federation) had the Halloween spending data.