APPLETON, Wis. — As the U.S.-Iran conflict drags into its second month, American consumers are feeling the pinch at the gas pump and pulling back on the little luxuries that fuel local economies. With gasoline prices hovering around $4 per gallon nationwide, discretionary spending on entertainment and leisure activities has taken a noticeable hit, according to data from location analytics firm Placer.ai. Event organizers, restaurant owners, and economists alike report a "wait-and-see" mentality gripping households, leading to softer traffic at bowling alleys, escape rooms, and arcades even as overall consumer spending shows resilience.
The war, which escalated in early March 2026 with U.S. strikes on Iranian targets following attacks on shipping in the Strait of Hormuz, has sent oil prices surging and disrupted global energy markets. On Friday, President Trump suggested the conflict was nearing resolution, prompting a brief 9% drop in oil prices after Iran reportedly reopened the strait to traffic. However, by Saturday morning, Iranian forces had reimposed controls amid reports of gunfire, reversing those gains and keeping pump prices elevated. This volatility has amplified economic uncertainty, with the University of Michigan's consumer sentiment index plummeting to a record low of 47.6 in April, down 10.7% from March.
Robert Evans, CEO of Cycling Quests, a company that organizes high-end road races across the U.S., has seen the effects firsthand in his registration numbers. "Every time something major is announced, like tariffs, or an attack on another country, our event registration tracks like the stock market. People pull back for a minute and pause and take a wait-and-see attitude," Evans said. He noted that lower-priced events, aimed at a broader market, have been hit hardest, with declines of 20-30% in some cases, while premium offerings have held up better — though even those are starting to soften.
For events tied to travel, the impact is compounded by rising airfares and fuel costs. Evans explained that each out-of-town participant in a mid-sized race in places like Boise, Idaho, or Provo, Utah, generates about $900 to $1,000 in additional economic activity through meals, lodging, and gas. With half of competitors staying overnight and 60% traveling more than two hours, cancellations ripple through host communities. "The stakes for host communities are significant. When consumers start skipping events or choosing closer-to-home alternatives, that spending evaporates while promoters' fixed costs remain — meaning the economic hit falls hardest on local restaurants, hotels, and retailers, not just the event organizer," Evans added.
This pattern extends to everyday leisure pursuits. Placer.ai data shows a clear shift: visits to discretionary retailers and entertainment venues dropped in March, as shoppers prioritized staples to stretch budgets. R.J. Hottovy, head of analytical research at Placer.ai, confirmed the trend. "Placer.ai data confirms a recent shift in consumer behavior: shoppers are decreasing their visits to discretionary retailers and entertainment venues, instead prioritizing consumer staples to stretch their household budgets," Hottovy said. Specific declines included a 10.6% drop in traffic at Bowlero, which operates over 350 bowling centers nationwide; a 4.5% slide at Dave & Buster's 170 locations; and a 7.6% decrease at Main Event's more than 50 outlets.
Escape rooms fared similarly, with average visits down 6.7% in March. Yet, not all entertainment sectors are suffering equally. Movie theaters have bucked the trend, drawing crowds with blockbusters like Project Hail Mary and The Super Mario Galaxy Movie. "Movie theaters have bucked this trend, buoyed by a strong slate of new releases like Project Hail Mary and The Super Mario Galaxy Movie," Hottovy noted, highlighting how compelling content can override broader caution.
Despite these pullbacks, broader spending data paints a mixed picture. Bank of America reported a 16.5% jump in debit and credit card transactions in March — the largest in over three years — largely driven by gas station purchases, though non-gas spending rose 3.6%. Bank of America CEO Brian Moynihan emphasized stability during a CNBC interview on Wednesday. "The consumers are spending, the credit quality is very good and improving. ... We all face that same uncertainty, but right now, the U.S. companies and consumers are doing well," Moynihan said. Larger IRS tax refunds, up over 11% this year due to tax law changes, have also provided a buffer for some households.
For chains like Dave & Buster's, challenges predate the war. The company's stock has faced pressure since mid-2024, exacerbated by past management issues and now geopolitical tensions. During a March 31 earnings call, CFO Darin Harper addressed analyst concerns about the shifting landscape. "Obviously, there's a lot going on from a macro perspective, from gas prices, from consumer sentiment and the like," Harper said. He cautioned that it's hard to disentangle war effects from seasonal factors like shifted spring breaks and Easter dates. "So as typical for our business, we kind of like to get through this spring break period of time and try to get a better read on things. We certainly know it's out there, but it's too early for us to really parse through what impact that's having," he added. Dave & Buster's did not respond to requests for further comment.
Hottovy pointed to a more direct link, noting year-over-year declines in eatertainment and escape room visits since mid-February, aligning with the war's onset. Mark Flint, CEO and co-founder of The Escape Game and The Great Big Game Show — one of the largest escape room operators in the U.S. — acknowledged the Placer.ai figures but suggested his business is somewhat insulated. "We did anticipate a year-over-year decrease for this time of year, but it does look like some concepts and categories were impacted more than expected," Flint said of March's numbers. He reported that April traffic is up compared to last year and that the company is proceeding with a $40 million investment in new stores and experiences nationwide.
"If you run a business people want to come to, it creates a buffer from the impact of what we consider temporary ebbs and flows from these types of world events," Flint continued. He emphasized the enduring appeal of shared experiences: "A great game played in a great environment with those you love is valuable to our guests all the time, and even more so when things get tough."
Economists attribute the cutbacks to classic behavior shifts amid higher fuel costs. Mark Johnson, a faculty fellow in investments and portfolio management at Wake Forest University School of Business, described it as textbook. "When people are spending more to fill up their tank, the first things to go are the fun and discretionary items. Those are easy to put off, but rent, a car payment, and groceries are not," Johnson said. He stressed the macroeconomic ripple: "It matters more than people realize because that discretionary spending is a big part of what keeps local economies growing."
Johnson anticipates a rebound if the conflict resolves swiftly. "The good news is that the 'fun' pullback is usually more of a pause than a permanent shift and a quick end to hostilities in Iran would likely bring people back to the bowling alleys and escape rooms," he said. "Once gas prices come down and budgets feel less tight, people tend to come back fairly quickly." However, prolonged uncertainty could entrench habits. "The key question is how long it lasts. I think this surge in gas prices could stick around longer than many expect. If that happens, inflation could spread into more parts of the economy and some discretionary spending habits may start to change in ways that are harder to reverse," Johnson warned.
A survey by Ernst & Young Parthenon underscores the selectivity: 27% of consumers reported pulling back on non-essentials. Will Auchincloss, Americas retail sector leader at EY Parthenon, observed targeted restraint. "While gas prices aren't the sole cause of discretionary pullbacks, households are becoming more selective as they prioritize essentials," Auchincloss said. "We're seeing targeted pullbacks in fitness and entertainment, as dollars shift toward non-negotiables such as groceries and housing." He added a note of optimism: Consumers feel more confident budgeting despite stress, and easing pressures could spur gradual recovery.
Evans at Cycling Quests echoed the unpredictability, recalling a post-COVID recovery halted by tariffs last year. "We had events last year that were trending well ahead of previous years, and then the tariffs were announced and registrations just stopped. Stopped," he said, describing weeks of minimal sign-ups. The current war has revived that hesitation. "As long as there is geopolitical chaos, there will be chaos in the fun economy as well, while people hesitate on whether they should save their money or enjoy life as normal. It's unpredictable," Evans concluded.
For small towns and cities reliant on tourism and events, the stakes are high. A brief pause in hostilities might restore confidence, but ongoing disruptions in the Strait of Hormuz — a chokepoint for 20% of global oil — keep the pressure on. As Americans balance essentials against indulgences, the war's shadow looms over not just foreign policy, but the vibrancy of everyday life at home.