Take me out
Zipline London recently opened the world’s fastest city zipline on London’s Southbank, illustrating the growing thirst for new experiences that is driving the UK leisure market.
We consider the space an attractive opportunity for two reasons: first, growing consumer spend in this sector; and second, an increase in the supply of innovative concepts.
The latest Barclaycard data on spending patterns shows that a fifth of Brits foresee an increase in their spending on leisure and entertainment.
A shift towards experiences over objects is a key driver of this: IKEA’s head of sustainability recently claimed that “In the West, we have probably hit peak stuff.” Indeed, the ‘experience economy’ has proven to be resilient this year despite economic uncertainty, inflation and slower wage growth. The changing nature of a “night out” underpins this, with leisure becoming an important part of a traditionally food and beverage focused evening activity.
Millennials are often seen as driving this trend, with their easy adoption of technology, preference for subscriptions over possessions, disposable incomes and prioritisation of leisure time. However, it is important for operators to focus on older groups as well, either as participants or as paying parents or grandparents.
Faced with this growing demand, there is an abundance of new concepts. ‘Competitive socialising’ has been pioneered by operators offering mini golf, go-karting, ping pong, darts, escape rooms, boules and shuffleboard. Further innovations include rejuvenating traditional concepts, as The Imbiba Partnership is looking to do with a new bingo offering, extending the scope or appeal of established activities, such as go-karting on ice or on cruise ships, and leveraging technology as we have seen in the boom area of e-sports.
We are also seeing operators successfully scale. Go Ape! now offers tree top adventures for families from over 30 sites, whilst High Sports, an indoor climbing wall operator, has grown to 11 sites. Mixed-use retail and leisure developments are also thriving, with the leisure offer taking centre stage; KidZania’s first UK site, at Westfield London, offers an immersive and experiential roleplay experience for children and it now has 24 facilities globally. Perhaps most notably, many will be familiar with the rise of trampoline parks – there are now over 100 of them in the UK; Oxygen Freejumping leads the market and secured £10m of investment last year whilst innovating by partnering with Bear Grylls on two sites. The fact that trampolining is now seen by some as reaching its peak is a sign of the fast-paced nature of the leisure sector.
The combination of demand growth and the volume and diversity of operators entering the leisure market creates opportunities for growth, consolidation and investment.