Adventure sports are everywhere at the moment – surf lagoons, iFLY, zip line parks and canopy tours, bike parks, high ropes – the range is truly exciting to see. As economists, we are enthusiastic about this trend. The range and scalability means adventure sports are finding themselves at the centre of many of our current projects. Whatever size your attraction – or planned attraction – this particular sector of the leisure industry has something to offer. This, coupled with an ever-growing public appetite for new/different experiences to share across social media, has created one of the most ‘grammable’ and bankable trends in recent years.
Why now? We’d suggest this is a trend that’s been growing in strength for at least 10 years. We have seen extraordinary social shifts and a growing sensitivity to social and environmental concerns as never before. Our travel and tourism plans reflect how we live our life. And there is an indisputable wholesomeness to adventure sports that ticks so many boxes. They are usually active, sporty, challenging…all the things we want to encourage in the next generation. Adrenalin combined with health and well being. There’s the benefit of government funding too. Climbing was officially declared as an Olympic sport in 2017 with UK Sport announcing plans to support this with an award of up to £630,000 to developing future talent.
Operationally, these businesses tend to be relatively low throughput but impactful and with a higher value per hour (a lot like The Void). Importantly from an economic feasibility viewpoint, they can get up and running comparatively easily and can be highly profitable with EBITDA margins often well in excess of 30 percent. As a result, Europe is wholeheartedly embracing these opportunities, currently accounting for about a third of the world-wide market. Appetite in the Middle East is growing rapidly (we are working on adventure and extreme sports in The Kingdom of Saudi Arabia and the UAE presently). World-wide, estimates suggest a projected CAGR for the sector of around 17% out to 2023.
Here’s LDP’s four ways that adventure attractions can add value:
1. As an anchor attraction to other leisure clusters
There is exciting potential for adventure sports installations within malls. More than ever, leisure, sports and entertainment are the next generation of anchors for vast retail destinations, such as EuropaCity. This is among a handful of high profile retail and mixed use schemes where adventure and extreme sports will be anchor attractions linked with lifestyle retail.
Indoor snow, although sometimes a challenging business, has proven people will travel greater distances for guaranteed conditions than they will for retail. The synergies with retail are strong and mean net new shoppers increasing rent rolls and driving incremental benefits to the retail developer. Research suggests that between 30 and 50 percent of visits to adventure and extreme sports within retail environments will be net new visitors to the centre.
2. Hotels and resorts – destination driver and a reason to lengthen stay
There is a growing sense within many hotels and resorts that guests need to be offered ‘something else’, that added never-to-be-forgotten experience. Aquaventure, the waterpark at The Atlantis in Dubai, is an early example of this but that kind of investment is by no means the only option to draw new visitors. Within Europe, perhaps the best known active resort offer was Center Parcs – a forest getaway with various activities attracting an extra charge.
Several of our current and recent resort and glamping projects are first and foremost adventure sports destinations, one driven by surfing, one diving and two diverse projects you could think of as paradise for adrenaline junkies with multiple sports around exciting new lodging concepts.
Our research with clients like Surf Snowdonia illustrates that people will travel further for perfect conditions for the sport that they are passionate about than they will for the perfect roller coaster. This fills beds and drives sound business.
A new adventure attraction can offer the ‘high intensity’ experience many families are looking for, especially given the move towards shorter but more regular breaks we are seeing within Europe.
3. Stand alone
We are seeing an abundance of new, stand alone adventure sports attractions. Often, rents are low as they are out of town and filling a long-unused space – take the incredible Chainstore Gym which is a dedicated Parkour space, named after the space that was used originally to test the strength of ship chain used in the docklands in east London. On a smaller scale, White Spider Climbing offer attractive spaces to undertake a range of climbing challenges for all ages. For the investor, these are smaller, more accessible with the attendant smaller capital outlay.
4. Alongside traditional fitness – something more ‘fun/family’
It’s impossible to have missed our changing attitude to fitness. Families are demanding quality family time, getting away from the screen for a while whilst keeping active.
This explains the success of Holme Pierrepont, the vast attraction at the National Water Sports Centre developed for the 2012 Olympics. Based in Nottingham, it has seen great success through its combination of adrenalin and adventure activities with fitness, accommodation and massively successful events throughout the year.
Another interesting development is a large gym group we’ve heard looking at raising funding for family-friendly indoor activity centres which are likely to be totally separate from the traditional gym offer. The fitness industry appears to be moving away from treadmill boredom.