It used to be that the hospitality sector was a relatively straightforward affair, one in which the pub, with a traditional pint and a friendly landlord, reigned supreme — but in today’s era of rising energy costs and cash-strapped consumers, one in which pubs are closing at the rate of more than one a day, landlords have had to get creative to encourage people through the door.
Where a simple game of darts might have been sufficient, for example, now there is “social darts” at Flight Club, bolstered with dart-tracking technology, automatic scoring and pre-programmed games, with each “oche” taking a dozen or more guests. Or maybe you would prefer Puttshack, a mini-golf brand, or Bounce, which specialises in ping-pong “for groups of two to five hundred” and promises “an experience you won’t forget”?
According to Toby Harris, chief executive of State of Play, the hospitality company behind Flight Club and the other games, landlords have begun to realise that people are prepared to go for a night out but are looking for something extra to make the evening truly memorable. “This theme was relevant before the pandemic, but [Covid] has driven a greater yearning for physical and ‘in real life’ experiences,” he said.
There is certainly plenty of space for newcomers: 386 pubs called last orders for the final time in England and Wales in 2022, according to Altus, the property adviser. Elsewhere on the high street, leading high street brands from Topshop to Debenhams closed during Covid as consumers shopped online.
It meant landlords of all types needed to become more inventive if they were to keep their properties occupied, particularly the former department stores that were often the anchor properties of shopping centres. It is an approach that has paid off for Landsec, the FTSE 100 property owner: nearly two years ago it leased an 80,000 sq ft former Debenhams store in its Southside shopping centre in Wandsworth, southwest London, to Gravity Active Entertainment. Gravity, which started as a trampoline park company in 2015, transformed four floors into a gaming emporium that features a go-karting race track, crazy golf, pool, table tennis and shuffleboards.
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“The deal has been transformational,” Nik Porter, Landsec’s head of retail brand account management, said. Since Gravity opened in the autumn of 2021, the venue has performed ahead of expectations, has driven an increase in shopper numbers, higher retail sales and has had a positive impact on leasing activity.
In December, Landsec’s One New Change shopping centre next to St Paul’s Cathedral in central London introduced the world’s first F1 Arcade, a bar offering guests an immersive Formula One motor racing simulation adventure. Tracey Pollard, managing director at Bruce Gillingham Pollard, the leisure and retail property agency that advised Landsec on the F1 Arcade deal, said it was key that any operator that took up the space needed to be more than just another regular food and beverage chain; it had to give people an exciting reason to visit.
A couple of miles west of St Pauls is Sandbox VR, a venue that aims to immerse people in their own action movie. Technology allows players to roam inside interactive worlds where they can fight alien invasions or a zombie apocalypse. If that all gets too much, there are places to sip a cocktail made by Britain’s first robot bartender.
Since opening in the summer, the venue has attracted more than 25,000 guests. Andy Scanlon, co-owner of Sandbox VR UK and Ireland, has plans to open thirty venues in the next six years, with two intended to open in 2023 and five in 2024.
“I’ve come to the conclusion that the terrible consequences of Covid have actually improved an offering like ours because it adds to the value of what we do,” he said.
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The change to working patterns prompted by the pandemic also has had an unexpected side-effect. Scanlon said the growth of hybrid working, with employees working from home at least some of the time, meant that managers saw team-building as more important than ever. Some corporate customers now visited his business “pretty much every month”.
State of Play is similarly pressing on with its expansion plans. Harris and his team are concentrating on taking Hijingo, its newest concept that comprises a “multi-sensory futuristic” take on bingo, to multiple international markets over the next few years, including the United States. The first venue opened in Broadgate Quarter near Shoreditch in 2021 and a second London venue is expected to follow.
While there hasn’t been any sign yet of consolidation in this sub-sector, Harris believes it is logical that businesses like his may add to its portfolio. “I absolutely do believe that there will be [consolidation], and probably in relatively short order, as some founders and smaller businesses, for whatever reason, don’t want to go on that journey of scaling up and others have investor bases or the fundamentals to be able to acquire. I suspect us to be one of those,” he said.
