01_
Across all parts of the leisure sector, value
for money will be crucial as the period of
austerity continues
02_
Health and fitness club operators may
engage in more estate management
activity, bringing more lower-end clubs to
the market
03_
Budget offerings will again be to the fore
04_
We should expect further distress in the
nightclub sector, as youth unemployment
continues to erode the target market
05_
We could see a further increase in the
outdoor leisure/health and fitness sector
Market
predictions
royalties are paid. Royalties collection firm
PPL’s plan to increase fees for Special Featured
Entertainment (SFE) up to 4,000 per cent will
seriously impact club venues that host DJs
and discos. The plan was revealed late in 2011
and major operators like Intertain are already
warning of dire consequences for the nightclub
sector if it is implemented and were also quick
to galvanise organised objection.
Even without this, there have been a number
of operators signalling distress or falling into
administration.
The most high profile of these was Luminar
Leisure, owner of 75 nightclubs operating
under the Oceana, Liquid and Lava & Ignite
brands. The company was acquired out of
administration in December for £45 million
by former company executive Peter Marks,
together with Alex Geffert and Joe Heanen.
As well as providing valuation and strategic
disposal advice to Luminar and its backers,
Christie + Co also completed the sale of three
additional Nexum Leisure nightclubs in Derby,
Leicester and Newport.
For experienced operators however,
nightclubs still remain a valid business
proposition. If clubs are to survive and
thrive in 2012 and beyond, operators will
need to demonstrate adaptability and change
or enhance their offering. This may mean
relocating to smaller or city centre premises,
or making better daytime use of space rather
>>
Operators throughout the leisure
arena saw the patterns of 2010 being
replicated through 2011, with budget
health and fitness, cinemas and
spas performing well, but with the
late-night sector remaining under
significant pressure. To assume that
2011
was merely a repeat tells just
half the story, however.
Nightclubs count the cost
Recessionary pressures, though a key driver
for levels of performance, were not the sole
causation of a difficult year for operators in
the nightclub arena.
It was true that the impact of youth
unemployment – now topping one million –
meant that nightclubs’ traditional audience
was under pressure. It was also the case
that the so-called ‘bank of mum and dad’
had its own lending restrictions during the
year, while continuing doubts about the
affordability of university fees meant that
disposable income was at a premium.
Yet nightclubs also had additional concerns to
weigh up – notably licensing reforms, which
saw nightclub operators struggle to compete
with late-night operators in the high street.
A further dark cloud on the horizon comes in
the form of proposed changes in the way music
than the self-limiting 10pm-4am usage. Venues
the size of most nightclubs could potentially
be utilised for complementary daytime
uses and it will be up to club owners and
managers to think outside the box more than
ever before.
Operators like Eclectic, under its Po Na Na
brand, and Odysian’s Cruise concept are
already reaping the benefits of using smaller
space better, with trading performance
and profitability improving as a result.
Budget still rising in health
and fitness
The health and fitness industry has seen
steady growth over the last few years,
particularly with the increase in local
authority and other public health clubs. It
remains a fragmented sector, however, with
the top seven players accounting for just one-
fifth of all health clubs, and a large proportion
of independent single-site operators.
Although largely resisting the effects of the
economic downturn, the health and fitness
sector witnessed a further consumer and
operator migration to the budget sector in
2011,
as the shift in consumer confidence
and pressures on disposable income hit
non-essential (things other than membership
fees) health club spend. Mid-market clubs
2012
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