Level99 and Fairgame Bet That Habit, Not Novelty, Builds Hospitality

Twenty-three percent of U.K. hospitality businesses are operating at a loss, and 16% believe they risk failure within 12 months — the backdrop against which a group of experiential operators is betting that food and drink alone no longer justify a night out. In the U.S., National Restaurant Association data showed August 2026 marked the 18th month out of 19 in which restaurant operators reported a net decline in customer traffic. Roughly one operator in six in Britain now fears it will not survive the year — a sobering frame for anyone selling experiences.

Consumers have not stopped spending on experiences. They have become more selective about which ones are worth leaving home for, and that selectivity is reshaping the sector's economics.

"Restaurants and bars are now competing with cinemas, live events and holidays for the same leisure pound," says Zoë Adjey, senior lecturer in hospitality and events management at the University of East London. "They still want a night out, but a plate of food alone no longer justifies the trip, which is why we have seen casual dining closures and Whitbread selling off its restaurant sites."

How do you turn a night out into a habit?

For Matt DuPlessie, founder of Level99, traditional attractions have a simple flaw: once you've seen them, you're done. His company borrows video-game mechanics — progression, mastery, challenge and player agency — to encourage repeat visits, using persistent player accounts, varying difficulty levels, modular challenge-room design and multiple gameplay formats.

"Novelty is a quickly depreciating asset," says DuPlessie.

The goal is to maximize lifetime value rather than depend on a one-time ticket purchase. "We've mapped video game mechanics onto the real world, moving from the theme-park model of 'watch this once' to the live-gaming model of 'master this skill over time,'" he says.

DuPlessie also challenges the conventional "eat-ertainment" model, in which operators run bars and bolt on entertainment to drive high-margin drinks. His counterargument: compelling, repeatable entertainment drives the long-term proposition, but food and beverage must be good enough to stand alongside it. Level99 pairs its gaming with scratch-made food and craft beverages.

"When high-velocity live-action gaming meets genuine culinary excellence, we aren't just selling drinks, we're creating an enduring social ritual," he says. That ritual, not the ticket, is what the business is actually selling.

What separates durable concepts from spectacles?

Richard Hilton arrived at a similar conclusion from a different starting point. After building Gymbox and later launching Fairgame, he saw strong demand for competitive socializing but believed many concepts repeatedly offered essentially the same activity.

"Once I noticed the weakness I started exploring a concept where each game could be different, test different skills and could be ever changing," he says. Fairgame combines a constantly evolving mix of technology-enabled games with the nostalgia of a traditional fairground. As with Level99, food and drink were built into the experience rather than added afterwards.

Level99 backs its repeatability claim with heavy investment in ongoing game development, employing an internal team of more than 50 creatives, mechanical engineers, software developers, fabricators and game designers. DuPlessie describes the venues as evolving gameplay platforms rather than static physical attractions. A 50-person creative team is a fixed cost most operators cannot carry — a point the founders do not dwell on.

Hilton's Gymbox experience taught him that repeat visits are shaped by details surrounding the headline attraction: lighting, music, food, drink, cleanliness, design, customer service and brand.

"While consumers may not notice all of this detail, they do feel the business is well run and this ensures an enjoyable experience that ultimately brings them back time and time again," he says.

One analyst draws a sharper line between substance and spectacle. "I tend to ask whether something would still be worth experiencing if nobody photographed it," says Eversole. "There's nothing wrong with creating something people want to share. But we sometimes confuse experience with spectacle. The photograph shouldn't be the experience."

Can the model survive saturation?

The commercial picture is tightening. "The market has become increasingly crowded, and this had made it harder to capture the available market share, meaning the economic rewards are less favorable than they were just a few years ago," says Emma Bernardez, head of hospitality at HaysMac. "Greater market saturation makes differentiation more important to stand above the crowd. Technology is key to providing a unique, superior experience, but it represents a major investment, and cutting-edge innovations will often be unfeasible for the average operator."

Adjey points to casualties: three Lucky Voice venues were recently acquired out of administration, and even fast-growing concepts such as F1 Arcade have seen losses widen as they scale. Yet she sees the biggest opportunities among smaller operators rather than large-format experiential brands.

"They can become local social hubs with something different each night: a quiz, a run club, a supper club, live music," she says. "People want real world connection close to home. That needs no multimillion pound fit out, just a welcoming room, a full calendar and staff who know customers by name. The big brands sell a day out. The local hub sells belonging, and belonging brings people back every week."

How do the leaders scale without going stale?

Level99 is expanding with backing from Ron Shaich's Act III Holdings, separating standardized operating systems from a centralized creative and engineering function that continuously develops new content.

"By standardizing the operational chassis while constantly innovating on the content side, all utilizing completely vertically integrated internal design capability, we keep the magic that brings guests back without reinventing repeatable operations," DuPlessie says.

Fairgame, now owned by TenPin and backed by Trive Private Equity, is pursuing a similar ambition. Hilton says the goal is not to reinvent the concept but to use additional capital to expand into U.S. markets. Both companies are wagering private-equity capital on a thesis — repeatable experiences — that has already strained thinner competitors.

The real test, the source makes clear, is not whether consumers want experiences but whether operators can keep giving them reasons to return while reproducing the model economically. The goal is not a memorable night out. It is a social habit.