American Airlines Center in Dallas is one of the latest venues to capitalize on a growing trend to create new revenue streams by lowering the number of suites while adding a premium, self-inclusive, cost-certain seating area constructed and designed more as theater-box-style suites with full-service food and beverage and lounge area.
The Service King Lounge at the north end of the home to the Dallas Mavericks and Dallas Stars replaced 12 suites and opened in time for the Stars first pre-season game last September. Thanks to an overwhelming demand for the original 22 theater boxes, the venue is working with HKS Architects in a second and final expansion to add 14 more boxes.
“We have also seen in the last five-plus years in arenas and stadiums that teams are going to a more inclusive concept,” said Andrew Silverman, the venue’s chief revenue officer and a veteran of having worked with theater box arrangements, most recently with Major League Baseball’s Miami Marlins.
“Suites appeal to a certain clientele but there is also a clientele that wants price certainty in their premium purchase. When you buy a suite, half of the cost is the food and beverage component,” Silverman.
The Service King Lounge and its adjoining theater boxes are an all-inclusive concept where buyers get four tickets to the game and unlimited food, beer, wine and liquor for all sporting events.
Silverman calls the lounge a “tweener” product between a season ticket and a suite product. “This is a nice niche,” he said, “that has worked well in other markets. It has worked well at United Center in Chicago and done great in Oklahoma City. We had this when I was in Columbus, so it’s definitely expanding. You get more of a lounge atmosphere where you can watch the game or you can go to the back area, eat your food and network some.”
Two areas are set up for food to the left and the right of the main lounge area, complete with carving station, pasta, chicken and salads. The high-end buffet provided by venue contractor Levy Restaurants is complemented by two bars also on either side. Executive chef Mark Mabry visits the lounge every night, part of his pet project to ensure that Levy continues over-delivering from the food and beverage perspective.
“This is a good product for a smaller business that can’t fill up a 12-person suite every night or maybe doesn’t have the appetite to order the food and beverage every night,” Silverman said.
Dave Brown, executive vice president and general manager of the arena, said that construction will start in August on the expansion and will be completed prior to the 2014-15 seasons for the Stars and Mavericks. An additional eight conventional suites will be eliminated to build the additional boxes. HKS Architects designed the original 22 theater boxes and will continue the design of the expansion.
“HKS really understood our vision and delivered on that,” Brown said. “The feel and look of the lounge and the way it operates is exactly what we had in mind. It’s a testament to HKS and their ability to turn our vision into a reality.”
Silverman added that once someone dons a hard hat and visits the construction area, the product sells itself.
“I’m a big fan of hard hat construction events,” he said. “I came from the Marlins after three years and we had a new ballpark. All we did was get people to the ballpark, show them the construction, throw hard hats on them and get them excited. You have to show off the spot, the construction, diagrams, hard hats, a little dirt and nails, which is actually a very sexy process. People like that and get excited. This isn’t a product you sell by sending out an e-blast.”
Collision repair expert company Service King was excited enough to put its signature on a five-year sponsorship for the area which features its name and logo in subtle and tasteful placements around the lounge.
“Service King really wanted to integrate with the standard American Airlines Center and be complementary to what we do as opposed to just standing out,” Brown said. “Their branding is subtle, minimal and very tasteful. I think that’s critical to a high-end area like this to have a sponsor that understands they can’t overwhelm the space and make it unappealing by their branding. Service King understood this and worked with us closely to capture the feel that we wanted with the branding. Both of us couldn’t be happier.”
As for the trend of space inventory being allocated more to lounge areas and fewer suites, Silverman believes this will continue in the future.
“Back in the day you would see 80 or 90 suites, but what teams have done is built more all-inclusive premium areas,” he said. “That’s the trend. This is certainly the trend on the arena side where you want to have seats that are all-inclusive and have price certainty. People like that.
“It’s not that the long-term suite business is going away, it’s that you can’t build 130 or 140 suites at a baseball stadium or an arena anymore. We have one of the highest long-term site revenues in the NBA and the NHL. We’re still very high and this is a great market, but at the time they built it, it was probably too many. Now we’ll have 108 suites in the building and 36 theater boxes. That’s a perfect number for us. You want to have demand and you want to sell out. You don’t want to have tons of open inventories because then people just rent and never buy long-term.”
Interviewed for this story: Andrew Silverman, (214) 665-4290; Dave Brown, (214) 665-4240