Technology in the leisure sector - is it too little too late?

09 January 2019 by James Anderson

Wherever you look, whether it is your weekly online shop, your digital wallet on your phone or your Smart TV, it is clear to see that technology is making its way into every aspect of modern life 

We also see tech revolutionising the property sector as speakers made clear at last year’s RPA iGeneration event. Speakers from a range of industries explained that embracing technology was key to keeping shoppers interested in physical stores - whether that be as extreme as the automated, cashierless Amazon Go stores soon to be rolled out in UK or the digitized shopping experience at the Nike Live store, or perhaps simply making the best use of social media to drive footfall to a location. 

But are there similar ideas in the leisure sector? And does this have an impact on store network expansion and growth? I'm going to look at a few sectors in the entertainment sector.

Bowling: A different kind of Turkey 

From 2018 to 2019, the two stand-out leaders in the bowling market; Hollywood Bowl and Tenpin, both experienced growth and increased their venue network across GB, compared to the struggling independent bowling centres – which saw an 8% decline in the last 12 months (January 2018 to January 2019). 

Fig1

Figure 1Net percentage change of estate numbers for top GB bowling alley brands over the last 12 months (Source: LDC) 

The Hollywood Bowl Group was formed in 2010 after a series of mergers and acquisitions within the sector (and now includes brands AMF, Hollywood Bowl and Bowlplex). The group had a clearly defined strategy from the get-go with one of their key strategies being to invest in technology. Walking into a Hollywood Bowl today, you might see one of the computerised VIP lanes or a virtual reality (VR) attraction on offer, showing that the group’s vision of embracing technology has become a reality. 

As VR is still a relatively new technology, the pricey headsets are too expensive for most consumers wanting to experience VR for the first time. Leisure locations like bowling alleys are a cost-effective way for consumers to try out different technologies, whilst also providing a channel for tech companies to launch and promote new products. 

The new technology focus has clearly paid off, with the group quickly becoming the market leader in the sector, which is highlighted by their continued growth (+2% increase in sites in last 12 months across the whole Hollywood Bowl Group) alongside recently revealing record profits and revenues last year, despite tough trading conditions. We can see the current locations of sites in the Hollywood Bowl Group on the map taken from our location insight platform, LDO below. We can also track the impact of the strategic partnership with intu with 17% of Hollywood Bowl’s portfolio appearing in shopping centres (compared to just 7% for their main competitor Tenpin). 

Screenshot 2019-01-09 at 11.26.34

Figure 2: Map of the Hollywood Bowl Group portfolio (Source: LDC) 

Tenpin also appears to be embracing technology in what has long been a relatively low-tech industry. They too have incorporated a VR experience into one of their Tenpin centres and have 12 locations offering their own ‘4D’ Laser Tag experience (Source: Tenpin).  

The fastest growing bowling alley brand in terms of openings is Superbowl UK, which has seen a sizable increase of +29% sites in the last 12 months, with five more launching in the next two years. Superbowl UK also brings tech experiences to the table with either Laser Tag or a Ninja TAG computerised assault course on offer at all of their current locations which again shows a shift in focus towards technology-driven activities. 

Consumers are increasingly demanding value for money across leisure experiences and extending the range of products on offer in a single location gives more reasons to visit and increases dwell time and secondary spend. Independent bowling centres and smaller brands like MFA Bowl may not have the capital to invest in new tech experiences like Hollywood Bowl and Tenpin can, which could be one of the reasons for its recent decline (MFA Bowl saw a 7% reduction in sites in last 12 months). 

Bingo halls: 85 Staying Alive or 78 at Heaven’s Gate ? 

In the past 12 months, we’ve seen some big changes in the highly profitable gambling industry. The continuing increase and popularity of online gambling sites has finally forced the traditional bingo powerhouse Gala to take action and re-invent their offer 

Under a huge rebranding initiative, every Gala club across the country will be converted into a Buzz Bingo by February 2019. This will accompany the launch of a new digital platform as Gala aims to capitalise on recent trends which show younger people are going out more often. The rebrand hopes to bring this new generation of players into the new-look bingo halls. Their goal is to move forward technologically and create an omni-channel platform that runs across mobile, desktop and on the electronic touchpads in all of its clubs in a hope to offer something different to the pure play online sites. The question is whether this move is too late, with other competing Bingo offers such as Bingo Academy already targeting the younger demographic. 

Snooker halls - It’s only a game so, put up a real good fight  

Fig3

Figure 3Changes to estate numbers for GB snooker and pool halls in the last 12 months (Source: LDC) 

When we look at snooker and pool hall openings and closures over recent years, we see that this subsector is in a state of decline. Top sports bar chain Rileys was operating in 59 locations in the UK four years ago until it hit financial difficulties, when it immediately shut 15 venues. It has been closing more year-on-year and now operates just 24 venues nationwide. We also have seen independent snooker and pool halls declining slightly in the last 12 months, as they fail to introduce tech into their products and consequently get snookered out of the market by other leisure locations. One example of this is the brand Flight Club, who have come up with an exciting new way to put a competitive spin on darts - a key Rileys offer. Other competing leisure pursuits that have seen growth include escape rooms - which attract both work groups and social consumers and mini-golf with the expansion of Top Golf, Swingers and Junkyard. 

Our prediction for this market is that it will take more technology-focused businesses to reimagine and consolidate these fragmented sectors to save them from further decline. It is clear to see that customers are looking for a change to the status quo when searching for leisure activities, and so without businesses continually thinking outside the box and innovating their offers, the traditional leisure experiences may become a thing of the past. 

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