COMMENT “Never let a good crisis go to waste.” There is some debate over who said these words, but they have been on my mind since March.
Whether you believe Covid-19 has accelerated pre-existing trends or initiated new ones, the way in which we spend time in buildings, and with one another, is transforming before our eyes. With a portfolio of hospitality and leisure businesses spanning the UK and the US, our business has had to stay close to these changes and anticipate how the market will evolve in the face of a resurgent virus and uncertain future government support.
Although moments such as these may interrupt the rhythm of everyday life, they also create gaps for new ideas. Businesses and brands will have to innovate more than ever before, but distress creates unique opportunities that wouldn’t otherwise be available.
Repurposing traditional retail space is a theme that continues to accelerate and should be embraced as an opportunity to help our high streets flourish. This trend has been some time in the making, as demonstrated by one of our portfolio companies – the Institute of Competitive Socialising, the business behind crazy golf venue Swingers. It started as a pop-up at an abandoned Shoreditch warehouse and has since opened two permanent sites in London, including the former flagship BHS store on Oxford Street (pictured below).
Demands and dynamism
While user patterns and maximum capacities may have shifted dramatically from the “old” normal, the core principle of a successful business has not changed: understand what the customer wants and provide it. How we spend our leisure time is more valuable to us than ever before, which is why multi-functional spaces offering experiences that cannot be replicated at home will continue to grow post-pandemic.
As restrictions eased following Lockdown 1.0, we saw how members returned en masse to Mortimer House, our private members’ club with co-working space. Its offering enabled opportunities for social interaction in a Covid-safe environment, while amenities such as a gym and restaurant provided many with a much-needed delineation between home and work.
The importance of dynamism can also be seen with the expansion of AllBright’s offer into digital memberships during lockdown.
Research by Aviva found that 59% of women reported higher levels of stress during the lockdown period, compared with 45% of men. Several findings show that women have taken on the greater share of housework and childcare while balancing work, affecting their wellbeing and long-term career progression. This means AllBright’s core offer of a network for women in business is needed today more than ever before, so it has created a digital membership that is affordable, accessible and complementary to the club’s physical locations.
In the trenches
This is not just a moment for leisure operators to pivot and innovate, but one for our entire industry to re-examine what we want from real estate and who we want to be working with when the next crisis hits.
If we are to create an ecosystem in which leisure businesses can thrive, then there needs to be a move towards a partnership-based approach – sharing risk and reward through performance-linked rents. We were happy to be in the trenches alongside all our partners during Covid because we are confident in their fundamentals. Only businesses that are ready for change and armed with bold ideas will thrive.
There is no denying that it has been a difficult year for most. As we move forwards, some old rules will still apply: well-capitalised businesses with strong management teams and the right product will be better positioned to weather the storm.
However, if we can apply what we have learnt about consumer needs throughout this great pause and commit to innovation that reflects these shifts, then the leisure sector may just emerge from this pandemic stronger than it was before.
Adam Taylor is senior vice-president, equity investment at Cain International
