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Leisure Review - UK - December 2012

“The amount of money that consumers have available to spend on leisure will continue to be under pressure for several more years, at least until the point where their earnings begin to grow above the rate of inflation. For the leisure industry, the implication of this is that there will continue to be a strong emphasis on value for money and price. This offers opportunities for leisure operators to stimulate advanced bookings through offering attractive discounts, a strategy which is already working well for companies like Cineworld in the cinema industry and which also aids the business’s planning and cashflow.”

– Michael Oliver, Senior Leisure & Media Analyst

Some questions answered in this report include:

  • What are the prospects for leisure spending?
  • How can operators target the squeezed middle?
  • Who are the most receptive and influential consumers when it comes to organising leisure activities?
  • What opportunities exist for developing food and beverage spend?

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Table of contents

  1. Introduction

      • Definitions
        • Abbreviations
        • Executive Summary

            • The market
              • Figure 1: Value of the UK leisure* industry, 2007-17
            • Market factors
              • Figure 2: Indexed trends in selected overhead costs for leisure operators, 2007-12
            • The consumer
              • Eating and drinking dominate out-of-home leisure
                • Figure 3: Leisure activity participation and frequency levels, overview, September 2012
              • Eating and drinking out biggest targets for cutbacks
                • Figure 4: Leisure activities net spending trend* in past 12 months, by sector, September 2012
              • The Planners rule…
                • Figure 5: Leisure habits and behaviours, September 2012
              • Days out attractions have highest secondary spend penetration
                • Figure 6: Secondary spending at leisure venues on last visit, September 2012
              • Less calorific options most likely to stimulate spending more on food and drink
                • Figure 7: Incentives to spend more on food and drink at days out venues, September 2012
              • What we think
              • Issues in the Market

                  • What are the prospects for leisure spending?
                    • How can operators target the squeezed middle?
                      • Who are the most receptive and influential consumers when it comes to organising leisure activities?
                        • What opportunities exist for developing food and beverage spend?
                        • Trend Application

                          • Trend: Click and Connect
                            • Trend: Power of One
                              • 2015 Inspire Prediction: Old Gold
                              • Market Drivers

                                • Key points
                                  • Overhead cost increases put pressure on leisure operators
                                    • Figure 8: Trends in food prices compared to all retail prices*, 2007-12
                                    • Figure 9: Trends in utility prices* paid by non-domestic consumers, 2006-12
                                    • Figure 10: Trends in the National Minimum Wage (for workers aged 22+ until 2010 when this rate applied to those aged 21+) compared to the Retail Price Index, 2006-12
                                  • Government planning policy is overhauled
                                    • Carbon Reduction Commitment causes administrative headaches
                                        • Figure 11: Examples of CO2 emissions of leisure operators, 2010
                                      • Financing issues
                                        • Private equity and the leisure industry
                                          • Figure 12: Examples of private equity ownership in the leisure industry, December 2012
                                        • Zombies, Run!
                                          • Pre-packs and CVAs allow zombies to come back to life
                                            • Insolvencies in the leisure industry
                                              • Figure 13: Hospitality and leisure insolvencies, Q4 2010-Q3 2012
                                            • Consumer issues
                                              • Incomes being squeezed
                                                • Figure 14: Trends in inflation and average weekly earnings, 2008-12
                                              • Unemployment worries continue
                                                • Figure 15: UK unemployment rates (seasonally adjusted), Q1 2006-Q2 2012
                                                • Figure 16: Forecast UK unemployment levels, 2012-17
                                                • Figure 17: UK unemployment rates, by age band (seasonally adjusted), 2006-12
                                              • UK economy forecast to return to growth in 2013
                                                • Figure 18: Forecast for UK GDP growth, 2012-17
                                              • Consumer confidence on verge of recovery?
                                                • Figure 19: Trends in UK consumer confidence, January 2010-November 2012
                                              • Digital device ownership grows despite economic woes
                                                • Figure 20: Electronic products/services have at home, January and September 2012
                                            • Who’s Innovating?

                                              • Key points
                                                • App domination
                                                  • Pubs/bars
                                                    • Cinema
                                                      • Performing arts
                                                        • Days out attractions
                                                          • RFID technology simplifies access control
                                                            • Catch ‘em young
                                                              • Encouraging new customers
                                                                • New attractions
                                                                • Market Size and Forecast

                                                                  • Key points
                                                                    • Leisure industry almost back to pre-recessionary values
                                                                      • Figure 21: Value of the UK leisure* industry, 2007-17
                                                                      • Figure 22: Trends in the value of the UK leisure* industry, 2007-12
                                                                    • Forecast
                                                                      • Figure 23: Forecast UK leisure* industry market value, 2007-17
                                                                  • Segment Performance

                                                                    • Key points
                                                                      • Eating and drinking out dominates leisure spend
                                                                        • Figure 24: Value of the UK leisure* industry, by segment, 2007-12
                                                                        • Figure 25: Value of the UK leisure* industry, by segment, 2012
                                                                      • The winners and losers: long term
                                                                        • Figure 26: Value growth rates for leisure* industry sectors, 2007-12
                                                                      • The winners and losers: short term
                                                                        • Figure 27: Value growth rates for leisure* industry sectors, 2011-12
                                                                    • Companies and Products

                                                                      • Major players
                                                                        • Cineworld Group Plc
                                                                            • Figure 28: Financial performance of Cineworld Group plc, 2007-11
                                                                            • Figure 29: Breakdown of Cineworld Group plc’s revenue, by segment, 2008-11
                                                                          • JD Wetherspoon plc
                                                                              • Figure 30: Key financial data for JD Wetherspoon PLC. 2008-12
                                                                            • Merlin Entertainments Group Ltd
                                                                                • Figure 31: Key financial highlights of Merlin Entertainments Sàrl, 2010 and 2011
                                                                                • Figure 32: Merlin Entertainments total global visitors, by division, 2010 and 2011
                                                                              • Tate
                                                                                  • Figure 33: Financial performance of Tate, 2008-12
                                                                                  • Figure 34: Self-generated income breakdown for Tate, 2011 and 2012
                                                                                  • Figure 35: The Tate visitor statistics, 2011 and 2012
                                                                                • Virgin Active Holdings
                                                                                    • Figure 36: Financial performance of Virgin Active UK, 2007-11
                                                                                  • Whitbread Plc
                                                                                    • Figure 37: Financial performance of Whitbread plc, 2011 and 2012
                                                                                  • Zoological Society of London
                                                                                      • Figure 38: Key financial data of the Zoological Society of London, 2007-11
                                                                                  • Leisure Participation and Frequency Levels

                                                                                    • Key points
                                                                                      • Eating out is most popular regular leisure activity
                                                                                        • Figure 39: Leisure activity participation and frequency levels, overview, September 2012
                                                                                      • Gambling most popular weekly activity
                                                                                        • Figure 40: Leisure activity participation and frequency levels, September 2012
                                                                                        • Figure 41: Leisure activity participation and frequency levels, September 2012
                                                                                    • Leisure Spending Trends by Sector

                                                                                      • Key points
                                                                                        • Main areas of spend are biggest targets for cutbacks
                                                                                          • Figure 42: Leisure spending trends in past 12 months, by sector, September 2012
                                                                                          • Figure 43: Leisure activities net spending trend* in past 12 months, by sector, September 2012
                                                                                        • Who cut back?
                                                                                          • Who spent more?
                                                                                          • Leisure Habits and Behaviours

                                                                                            • Key points
                                                                                              • The Planners rule
                                                                                                • Figure 44: Leisure habits and behaviours, September 2012
                                                                                              • Who plans?
                                                                                                • Who is spontaneous?
                                                                                                  • Women and families most receptive to a discount
                                                                                                    • The power of recommendation
                                                                                                      • Price sensitivity peaks among younger consumers
                                                                                                        • Paying more for the experience is largely the preserve of the better off
                                                                                                          • New venues versus old favourites
                                                                                                            • Women take responsibility for organising leisure activities
                                                                                                              • Futurescape?
                                                                                                                • Theatre- and live sport-goers most likely to plan in advance
                                                                                                                  • Clubbers are the most spontaneous
                                                                                                                    • Price-sensitive among most likely to plan in advance
                                                                                                                    • Secondary Spend at Leisure Venues

                                                                                                                      • Key points
                                                                                                                        • Days out venues achieve highest secondary spending penetration
                                                                                                                          • Figure 45: Secondary spending at leisure venues on last visit, September 2012
                                                                                                                          • Figure 46: Secondary spending at leisure venues on last visit, September 2012 (continued)
                                                                                                                        • Alcoholic drinks
                                                                                                                          • Soft drinks/tea/coffee
                                                                                                                            • Snacks
                                                                                                                              • Meals
                                                                                                                                • Merchandise
                                                                                                                                  • Propensity to buy alcohol higher among most frequent visitors
                                                                                                                                  • Incentives to Spend More on Food and Drink at Days Out Venues

                                                                                                                                    • Key points
                                                                                                                                      • Less calorific options favoured
                                                                                                                                        • Figure 47: Incentives to spend more on food and drink at days out venues, September 2012
                                                                                                                                      • Size matters
                                                                                                                                        • Branding appeals to youth audiences
                                                                                                                                          • Demand for ‘free-from’ options to grow?
                                                                                                                                            • Correlation between locally sourced, free-range and organic
                                                                                                                                            • Appendix – Market Drivers

                                                                                                                                                • Figure 48: Hospitality and leisure insolvencies, Q4 2010-Q3 2012
                                                                                                                                                • Figure 49: UK unemployment rates (seasonally adjusted), Q1 2006-Q2 2012
                                                                                                                                                • Figure 50: Forecast UK unemployment levels, 2012-17
                                                                                                                                                • Figure 51: UK unemployment rates, by age band (seasonally adjusted), 2006-12
                                                                                                                                                • Figure 52: Forecast for UK GDP growth, 2012-17
                                                                                                                                            • Appendix – Market Size Forecast Scenarios

                                                                                                                                                • Figure 53: UK leisure industry market size forecast scenarios, 2012-17
                                                                                                                                            • Appendix – Leisure Participation and Frequency Levels

                                                                                                                                                • Figure 54: Leisure participation and frequency levels, by most popular leisure participation and frequency levels, September 2012
                                                                                                                                                • Figure 55: Leisure participation and frequency levels, by next most popular leisure participation and frequency levels, September 2012
                                                                                                                                                • Figure 56: Leisure participation and frequency levels, by other leisure participation and frequency levels, September 2012
                                                                                                                                                • Figure 57: Leisure participation and frequency levels, by least popular leisure participation and frequency levels, September 2012
                                                                                                                                                • Figure 58: Leisure participation and frequency levels in gambling, by demographics, September 2012
                                                                                                                                                • Figure 59: Leisure participation and frequency levels in drinking in pubs/bars, by demographics, September 2012
                                                                                                                                                • Figure 60: Leisure participation and frequency levels in eating out in restaurants (not pubs), by demographics, September 2012
                                                                                                                                                • Figure 61: Leisure participation and frequency levels in eating out in pubs, by demographics, September 2012
                                                                                                                                                • Figure 62: Leisure participation and frequency levels in going to the cinema, by demographics, September 2012
                                                                                                                                                • Figure 63: Leisure participation and frequency levels in using a public leisure centre, by demographics, September 2012
                                                                                                                                                • Figure 64: Leisure participation and frequency levels in using a private health and fitness club, by demographics, September 2012
                                                                                                                                                • Figure 65: Leisure participation and frequency levels in attending live sports events, by demographics, September 2012
                                                                                                                                                • Figure 66: Leisure participation and frequency levels in attending live comedy shows, by demographics, September 2012
                                                                                                                                                • Figure 67: Leisure participation and frequency levels in going to a nightclub, by demographics, September 2012
                                                                                                                                                • Figure 68: Leisure participation and frequency levels in going to music concerts/festivals, by demographics, September 2012
                                                                                                                                                • Figure 69: Leisure participation and frequency levels in going to the theatre, by demographics, September 2012
                                                                                                                                                • Figure 70: Leisure participation and frequency levels in going tenpin bowling, by demographics, September 2012
                                                                                                                                                • Figure 71: Leisure participation and frequency levels in visiting a museum, gallery or exhibition, by demographics, September 2012
                                                                                                                                                • Figure 72: Leisure participation and frequency levels in visiting a zoo/wildlife attraction, by demographics, September 2012
                                                                                                                                                • Figure 73: Leisure participation and frequency levels in going to a theme park, by demographics, September 2012
                                                                                                                                                • Figure 74: Leisure participation and frequency levels in going to other visitor attractions, by demographics, September 2012
                                                                                                                                            • Appendix – Leisure Spending Trends

                                                                                                                                                • Figure 75: Leisure spending trends in past 12 months, by leisure participation and frequency levels in gambling, September 2012
                                                                                                                                                • Figure 76: Leisure spending trends in past 12 months, by leisure participation and frequency levels in drinking in pubs/bars, September 2012
                                                                                                                                                • Figure 77: Leisure spending trends in past 12 months, by leisure participation and frequency levels in eating out in restaurants (not pubs), September 2012
                                                                                                                                                • Figure 78: Leisure spending trends in past 12 months, by leisure participation and frequency levels in eating out in pubs, September 2012
                                                                                                                                                • Figure 79: Leisure spending trends in past 12 months, by leisure participation and frequency levels in going to the cinema, September 2012
                                                                                                                                                • Figure 80: Leisure spending trends in past 12 months, by leisure participation and frequency levels in using a public leisure centre, September 2012
                                                                                                                                                • Figure 81: Leisure spending trends in past 12 months, by leisure participation and frequency levels in using a private health and fitness club, September 2012
                                                                                                                                                • Figure 82: Leisure spending trends in past 12 months, by leisure participation and frequency levels in attending live sports events, September 2012
                                                                                                                                                • Figure 83: Leisure spending trends in past 12 months, by leisure participation and frequency levels in attending live comedy shows, September 2012
                                                                                                                                                • Figure 84: Leisure spending trends in past 12 months, by leisure participation and frequency levels in going to a nightclub, September 2012
                                                                                                                                                • Figure 85: Leisure spending trends in past 12 months, by leisure participation and frequency levels in going to music concerts/festivals, September 2012
                                                                                                                                                • Figure 86: Leisure spending trends in past 12 months, by leisure participation and frequency levels in going to the theatre, September 2012
                                                                                                                                                • Figure 87: Leisure spending trends in past 12 months, by leisure participation and frequency levels in going tenpin bowling, September 2012
                                                                                                                                                • Figure 88: Leisure spending trends in past 12 months, by leisure participation and frequency levels in visiting a museum, gallery or exhibition, September 2012
                                                                                                                                                • Figure 89: Leisure spending trends in past 12 months, by leisure participation and frequency levels in visiting a zoo/wildlife attraction, September 2012
                                                                                                                                                • Figure 90: Leisure spending trends in past 12 months, by leisure participation and frequency levels in going to a theme park, September 2012
                                                                                                                                                • Figure 91: Leisure spending trends in past 12 months, by leisure participation and frequency levels in going to other visitor attractions, September 2012
                                                                                                                                                • Figure 92: Most popular leisure spending trends in past 12 months, by demographics, September 2012 (counts)
                                                                                                                                                • Figure 93: Next most popular leisure spending trends in past 12 months, by demographics, September 2012 (counts)
                                                                                                                                                • Figure 94: Other leisure spending trends in past 12 months, by demographics, September 2012 (counts)
                                                                                                                                                • Figure 95: Leisure spending at gambling and drinking in pubs/bars trends in past 12 months, by demographics, September 2012 (percentages)
                                                                                                                                                • Figure 96: Leisure spending at eating out in restaurants (not pubs) and eating out in pubs trends in past 12 months, by demographics, September 2012 (percentages)
                                                                                                                                                • Figure 97: Leisure spending at going to the cinema and using a public leisure centre trends in past 12 months, by demographics, September 2012 (percentages)
                                                                                                                                                • Figure 98: Leisure spending at using a private health and attending live sports events trends in past 12 months, by demographics, September 2012 (percentages)
                                                                                                                                                • Figure 99: Leisure spending at attending live comedy shows and going to a nightclub trends in past 12 months, by demographics, September 2012 (percentages)
                                                                                                                                                • Figure 100: Leisure spending at going to music concerts/festivals and going to the theatre trends in past 12 months, by demographics, September 2012 (percentages)
                                                                                                                                                • Figure 101: Leisure spending at going tenpin bowling and drinking in pubs/bars trends in past 12 months, by demographics, September 2012 (percentages)
                                                                                                                                                • Figure 102: Leisure spending at visiting a zoo/wildlife attraction and going to a theme park trends in past 12 months, by demographics, September 2012 (percentages)
                                                                                                                                                • Figure 103: Leisure spending at going to other visitor attractions trends in past 12 months, by demographics, September 2012 (percentages)
                                                                                                                                            • Appendix – Leisure Habits and Behaviours

                                                                                                                                                • Figure 104: Leisure habits and behaviours, by most popular leisure participation and frequency levels, September 2012
                                                                                                                                                • Figure 105: Leisure habits and behaviours, by next most popular leisure participation and frequency levels, September 2012
                                                                                                                                                • Figure 106: Leisure habits and behaviours, by other leisure participation and frequency levels, September 2012
                                                                                                                                                • Figure 107: Leisure habits and behaviours, by least popular leisure participation and frequency levels, September 2012
                                                                                                                                                • Figure 108: Leisure habits and behaviours, by most popular leisure participation and frequency levels, September 2012
                                                                                                                                                • Figure 109: Leisure habits and behaviours, by next most popular leisure participation and frequency levels, September 2012
                                                                                                                                                • Figure 110: Leisure habits and behaviours, by other leisure participation and frequency levels, September 2012
                                                                                                                                                • Figure 111: Most popular leisure habits and behaviours, by demographics, September 2012
                                                                                                                                                • Figure 112: Next most popular leisure habits and behaviours, by demographics, September 2012
                                                                                                                                                • Figure 113: Other leisure habits and behaviours, by demographics, September 2012
                                                                                                                                            • Appendix – Secondary Spend at Leisure Venues

                                                                                                                                                • Figure 114: Secondary spending at leisure venues on last visit, by leisure participation and frequency levels in cinema, September 2012
                                                                                                                                                • Figure 115: Secondary spending at leisure venues on last visit, by leisure participation and frequency levels in public leisure centre, September 2012
                                                                                                                                                • Figure 116: Secondary spending at leisure venues on last visit, by leisure participation and frequency levels in private health and fitness club, September 2012
                                                                                                                                                • Figure 117: Secondary spending at leisure venues on last visit, by leisure participation and frequency levels in live sports event, September 2012
                                                                                                                                                • Figure 118: Secondary spending at leisure venues on last visit, by leisure participation and frequency levels in museum, gallery or exhibition, September 2012
                                                                                                                                                • Figure 119: Secondary spending at leisure venues on last visit, by leisure participation and frequency levels in music concerts/festivals, September 2012
                                                                                                                                                • Figure 120: Secondary spending at leisure venues on last visit, by leisure participation and frequency levels in theatre, September 2012
                                                                                                                                                • Figure 121: Secondary spending at leisure venues on last visit, by leisure participation and frequency levels in tenpin bowling, September 2012
                                                                                                                                                • Figure 122: Secondary spending at leisure venues on last visit, by leisure participation and frequency levels in zoo/wildlife attraction, September 2012
                                                                                                                                                • Figure 123: Secondary spending at leisure venues on last visit, by leisure participation and frequency levels in theme park, September 2012
                                                                                                                                                • Figure 124: Secondary spending at leisure venues on last visit, by leisure participation and frequency levels in going to other visitor attractions, September 2012
                                                                                                                                                • Figure 125: Secondary spending at most popular leisure venues on last visit, by demographics, September 2012 (counts)
                                                                                                                                                • Figure 126: Secondary spending at next most popular leisure venues on last visit, by demographics, September 2012 (counts)
                                                                                                                                                • Figure 127: Secondary spending at cinema on last visit, by demographics, September 2012 (percentages)
                                                                                                                                                • Figure 128: Secondary spending at public leisure centre and private health and fitness club on last visit, by demographics, September 2012 (percentages)
                                                                                                                                                • Figure 129: Secondary spending at live sports event on last visit, by demographics, September 2012 (percentages)
                                                                                                                                                • Figure 130: Secondary spending at museum, gallery or exhibition on last visit, by demographics, September 2012 (percentages)
                                                                                                                                                • Figure 131: Secondary spending at music concerts/festivals on last visit, by demographics, September 2012 (percentages)
                                                                                                                                                • Figure 132: Secondary spending at theatre on last visit, by demographics, September 2012 (percentages)
                                                                                                                                                • Figure 133: Secondary spending at tenpin bowling on last visit, by demographics, September 2012 (percentages)
                                                                                                                                                • Figure 134: Secondary spending at zoo/wildlife attraction on last visit, by demographics, September 2012 (percentages)
                                                                                                                                                • Figure 135: Secondary spending at theme park on last visit, by demographics, September 2012 (percentages)
                                                                                                                                                • Figure 136: Secondary spending at going to other visitor attractions on last visit, by demographics, September 2012 (percentages)
                                                                                                                                            • Appendix – Incentives to Spend More on Food and Drink at Days Out Venues

                                                                                                                                                • Figure 137: Incentives to spend more on food and drink at days out venues, by most popular incentives to spend more on food and drink at days out venues, September 2012
                                                                                                                                                • Figure 138: Incentives to spend more on food and drink at days out venues, by next most popular incentives to spend more on food and drink at days out venues, September 2012
                                                                                                                                                • Figure 139: Incentives to spend more on food and drink at days out venues, by other incentives to spend more on food and drink at days out venues, September 2012
                                                                                                                                                • Figure 140: Incentives to spend more on food and drink at days out venues, by most popular leisure participation and frequency levels, September 2012
                                                                                                                                                • Figure 141: Incentives to spend more on food and drink at days out venues, by next most popular leisure participation and frequency levels, September 2012
                                                                                                                                                • Figure 142: Incentives to spend more on food and drink at days out venues, by other leisure participation and frequency levels, September 2012
                                                                                                                                                • Figure 143: Incentives to spend more on food and drink at days out venues, by least popular leisure participation and frequency levels, September 2012
                                                                                                                                                • Figure 144: Most popular incentives to spend more on food and drink at days out venues, by demographics, September 2012
                                                                                                                                                • Figure 145: Next most popular incentives to spend more on food and drink at days out venues, by demographics, September 2012

                                                                                                                                            Companies Covered

                                                                                                                                            • Alton Towers
                                                                                                                                            • Beefeater
                                                                                                                                            • Blackstone Group (The)
                                                                                                                                            • Brewers Fayre
                                                                                                                                            • Chessington World of Adventures
                                                                                                                                            • Cineworld
                                                                                                                                            • Coffee Nation
                                                                                                                                            • Costa
                                                                                                                                            • CVC Capital Partners Limited
                                                                                                                                            • DreamWorks SKG
                                                                                                                                            • Esporta
                                                                                                                                            • Facebook, Inc.
                                                                                                                                            • JD Wetherspoon
                                                                                                                                            • LEGOLAND Windsor Park Ltd
                                                                                                                                            • London Stock Exchange plc
                                                                                                                                            • London Zoo
                                                                                                                                            • Merlin Entertainments Group Limited
                                                                                                                                            • Odeon Cinemas
                                                                                                                                            • Starbucks Coffee Company UK Ltd
                                                                                                                                            • Tate Britain
                                                                                                                                            • Tate Modern
                                                                                                                                            • The London Eye Company
                                                                                                                                            • The Tussauds Group
                                                                                                                                            • Thorpe Park
                                                                                                                                            • Twitter, Inc.
                                                                                                                                            • Virgin Active
                                                                                                                                            • Walt Disney Parks & Resorts
                                                                                                                                            • Whitbread PLC
                                                                                                                                            • Zoological Society of London

                                                                                                                                            Leisure Review - UK - December 2012

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