“There’s not a lot new. It’s much of a muchness, and everything is really the repackaging of old ideas.” This view of new leisure markets in the UK in 2005 from David Camp, director with international leisure analyst firm ERA, may seem cynical, but he does have a point.
The leisure industry is forever chasing the “next new thing”. In reality, though, most of the next new things come when a company or person adds a new twist to an existing formula.
So what will be the new thing for this year? The question brings up many answers, chief among them are chameleon bars, which are venues that are all things to all people. “People are now interested in going to places that can provide a lot of entertainment under one roof,” says Camp.
Taking the chameleon idea further, Trevor Shelley of Shelley Sandzer believes deli-restaurants will be making it big in 2005. “They are a mix between retail and restaurants,” says Shelley, offering as the perfect example London’s Carluccio’s chain.
Tracey Mills, agency director with Davis Coffer Lyons, thinks “bed clubs” will be the next hot trend. A development of concepts such as the Supper Club in Amsterdam, bed clubs are, Mills explains, “not just about eating and drinking. It is also about the whole experience, where diners relax on cushions while eating “.
A Supper Club spokeswoman adds: “We would like to open in London as soon as possible but we won’t make any concessions to the location. We want the perfect location in the centre of London, and if we find a location today it will take another five months to be open.”
A potential problem posed by these “chameleon” operators concerns planning classifications.
Changes to the Use Classes Order come into force on 21 April, adding two new categories to the existing three A classes and setting new definitions of each, which subdivides the A3 classification into five categories. Trevor Watson, specialist projects director of leisure for Davis Coffer Lyons, explains: “It will be possible to move up the list from A4 drinking establishment to A3 restaurant and café without applying for planning permission. But it will not be possible to move from A3 to A4, or indeed to A5.”
With operators mixing retail with leisure, Shelley says: “I don’t know how we are going to explore this concept with the planners.”
Deli-style eateries also create a conundrum for landlords. “In lots of areas,” Shelley explains, “retail rents have exceeded leisure rents. Landlords let to retailers and so lose the planning consent.
“If a landlord says, ‘I really like you’, and restaurant rents pick up, we can’t revert to a leisure consent, without obtaining a new planning consent.
“In light of reticence of planners giving consent, it is unlikely that we will gain another approval. Once you lose the leisure consent, you lose it forever.”
It may take a while for these problems to be ironed out. Meanwhile, operators are continuing to strive for new concepts, while some older concepts are predicted not to do too well over the next 12 to 18 months.
Examples of the deli-restaurant trend include Deli Bertorelli, London W1, owned by Paramount Restaurants, Del Aziz in London’s Fulham, and La Flaneur in Clerkenwell. Shelley says that these restaurants with retail attached are a hybrid of American and Italian influences — “but it’s more American than Italian”.
That said, dim sum and noodle restaurants are gaining in popularity across the industry. Ping Pong by Kurt Zdesar, Great Marlborough Street W1, is one of the most recent examples to have opened.
On the speciality side, former Fish! owner Tony Allen is set to start another restaurant. After the demise of Fish! comes Fish Kitchen. Allen will open his first restaurant in June.
“But this type of market is unforgiving because you need a high turnover, due to the type of product served,” says DCL’s Tracey Mills.
Shelley adds: “Where we have had a problem in the restaurant sector is the mid-market casual dining restaurants. We need more like Chez Gerard’s Bertorelli concept.”
Shelley believes that the success of the cheaper end of the market — where the likes of Pizza Hut (itself looking for another 50 units this year) offer good-value food at lower prices — is draining the mid-market.
“Ha! Ha! Bar is the only female-friendly concept to have moved along with the times. The others, like Pitcher & Piano, seem to have faded,” fumes one agent, who unsurprisingly did not want to be named.
Pitcher & Piano owner Wolverhampton & Dudley recognises that its concept needs updating. In his statement at the company’s financial results last December, chairman David Thompson said: “We refurbished five Pitcher & Piano bars during the year, and have achieved good results. Six more will be completed in the new financial year.”
Elsewhere in the market, Alex Munro, head of commercial agency and development at Knight Frank’s Leeds office, says that most of the pub activity concerns individuals and companies trading in their portfolios. “All the enquiries now are from small companies,” he says. “That’s probably a healthier thing, because they have much tighter control over their properties and are most likely to bring out new ideas.”
What’s not doing so well? “Nightclubs,” says Munro, adding: “There’s too much competition with the larger bars.”
Andrew McGregor, director of commercial leisure at Savills, agrees. “Any operator that is pure nightclub is going to be in big trouble,” he warns. “This format just isn’t going to work any more, because there are more exciting theme bars out there that can be open from morning through to 3am.”
McGregor believes that operators need to look for links with other sectors in order to broaden their markets. “Luminar is taking the right steps,” he says. “It’s diversifying its product by looking at tying up with casino operators.”
After a good 2004, which saw stronger demand from buyers for hotels, Christie & Co is predicting another good year for the sector. As well as those being bought, hotel groups of all sizes have announced expansion plans for 2005 and beyond.
Among them are Millennium & Copthorne Hotels, which announced last month that it is planning to expand its presence in the UK and Ireland following a 48% jump in profits.
The group is planning to open 20 Copthorne-branded hotels, which are likely to be franchise operations or under management contracts, two of which are under negotiation.
Days Inn, Malmaison and Hotel du Vin are also set to grow. The expansion of the latter two confirms Shelley’s belief that: “The hotel sector is about boutique hotels.”
The health and fitness market has been riding a series of highs and lows since the sector first gained popularity in the late 1980s. After a flurry of openings in the mid-1990s, though, the sector dropped like a stone later that decade. But it has now started something of a comeback – albeit in a leaner form.
David Lloyd has been looking at more sites. Overall, however, according to McGregor at Savills, the past few years have been “an incredibly quiet time from an acquisition point of view”. He says that, on the whole, operators are not expanding.
