Five reasons to be cheerful about the leisure sector

COMMENT: With busy work-life schedules, social activities are becoming increasingly valuable to consumers and this desire to unwind in a variety of ways is one of the social-economic trends pushing leisure spend. So away from the limelight of restaurant CVAs, here are my five reasons to be upbeat about the health and the future of the leisure sector. 1. The ability to service multiple consumer types from the same unit Traditionally, operators just catered for one segment such as families (kids’ play areas) or adults (bars and nightclubs). But now we are seeing venues service both. For example, adventure golf. Many operators serve families during the day but switch in the evening to adults-only, with more alcohol, louder music and lower lighting. This has led to landlords being surprised to find indoor mini-golf operators needing alcohol licences until early in the morning. 2. Boutique offers target individual catchments Boutique operators that appeal to specialist customer segments or markets are growing. These include gym studio operators such as Digme Fitness, BXR and F45, as well as cinema operators such as Arc and Scott Cinemas.  Such brands can fit into much smaller units than the larger chains or can service a smaller catchment population. Their fit-out costs are lower so that residential and regional developers can afford to include them in developments. 3. It is human nature to want to compete There are now more than 170 such “competitive socialising” leisure operators with 335 sites across the UK and that figure is growing, according to research by Savills and the Leisure Property Forum. Our love of competing and socialising has led to a rapid growth in virtual reality/gaming, bar games, escape rooms and Canadian axe-throwing, with new formats such as indoor archery and board game cafés also popping up.  At the Leisure Property Forum we are seeing a surge in membership including these new offerings. For landlords, the big question around these offers is: are they just passing fads? Watch out for those that are too strongly tied to a piece of IP such as a TV show and ask yourself how easily a unit can be upgraded or refreshed before agreeing to a deal with a trendy new leisure offering. One of the problems with the trampoline sector, for example, has been that customers have grown bored of layouts which then require major capital expenditure to be changed.  That said, I think most will survive – remember back in the 1980s when many thought US-style bowling alleys were a passing trend? They are still with us 30 years later. 4. Consumers continue to feel the need for speed The QSR (Quick Service Restaurant) sector is booming, with established operators such as McDonald’s, Burger King and KFC, plus new brands such as German Doner Kebab and Oodles, competing to roll out new drive-thrus. Despite the trend for healthier eating gaining traction, any brand that can serve us rapidly and efficiently is cashing in thanks to time-poor Britons. 5. The Fortnite effect Leisure operators have traditionally been pretty poor with the use of innovative technology in their units but that is starting to change. Smart operators are realising that linking their activities to customers’ smartphones and providing out-of-venue experiences beyond just having a booking function on their website is crucial. Whereas technology is disrupting retail and causing the closure of units, for leisure operators it provides an opportunity to expand sales and improve their offer for customers. It can even create new sectors. The escape room concept, for example, started on smartphones. I predict we will see more of these transfers.  A Fortnite environment using laser weapons? It’s totally possible. Ashley Blake is chairman of the Leisure Property Forum and chief executive of leisure specialist investor Otium Real Estate