Operators of bars and venues built around darts, bowling and escape games have warned the UK market for “competitive socialising” venues risks becoming oversupplied as they struggle to encourage repeat visits.
But a series of companies insisted that, despite several years’ rapid growth, they still had room to grow through branching out overseas, regularly varying the activities offered or targeting less saturated UK locations.
The number of UK venues for competitive socialising, ranging from digital clay pigeon shooting to virtual reality games, has grown by 40 per cent since 2018 to around 600, according to Savills, the real estate consultancy. The group expects further growth, to more than 800 sites, by 2029.
However, Tim Wilks, founder of bowling alley chain Lane7, was one of several executives to warn that the number of venues risked growing faster than customers’ appetite for them.
“The markets are evolving quickly [to the point] of oversupply in certain markets,” Wilks said.
Lane7, in which Wilks and his wife are sole shareholders, started in Newcastle in 2013 and has since grown to 17 sites, including its first overseas location opened in Berlin last November.
The company was seeking new activities to offer at venues during its continued expansion, Wilks said.
“We are trying to figure out what’s a fad and what’s got longevity,” Wilks said, pointing to axe-throwing as an activity that was initially popular but then lost momentum.
“Is it something people need to do 10 times?” Wilks asked. “Probably not.”
It was also important to choose locations carefully, Wilks added.
Pointing to hotspot cities such as Liverpool, he said: “There is saturation in certain areas out there.”
Industry leaders and experts said that the sector’s growth was slowing partly because the concepts involved were no longer novel.
Paul Davies, category director of consumer leisure habits research at Mintel, said his research had shown 15 per cent of UK adults and 23 per cent of those aged 16 to 24 had participated in crazy golf in the last year.
Although bars that offered multiple activities had maintained their growth momentum, crazy golf and some other activities had reached their peak, Davies said.
“There is very limited scope for growth in those particular markets,” he said.
Steve Moore, chief executive of Red Engine, which runs Flight Club darts bars and the Electric Shuffle shuffleboard brand, said the marketing required to acquire new customers had grown “more and more expensive” because of saturated markets.
The company was setting up an in-house market intelligence team to select suitable sites for new development, he added.
Red Engine plans to open eight new venues this year to take its estate to 39 outlets spanning the UK, US, Australia and Ireland. It is aiming to grow to more than 80 venues by 2030 and expand to countries such as Sweden, France and Portugal.
Moore insisted, however, that his sites were not purely activity-based. Many guests enjoyed drinks with friends at Red Engine’s outlets without playing games, he said. He contrasted that with other operators where, he said, customers often felt they need not come back after playing once.
“We’re not a social entertainment [but] a place to come and hang out,” Moore said.
Meanwhile, Little Lion Entertainment, which operates Crystal Maze Live experiences in London and Manchester, is betting that regular changes of activity will maintain interest in its outlets.
Little Lion is planning to launch a Pac-Man themed immersive site next month in Manchester and aims to reach a total of 25 sites, mostly in the UK, within the next five years.
Tom Lionetti-Maguire, chief executive, said regular changes of activity meant the sites would work like games consoles.
“You can have infinite content and there is infinite repeatability with different games [so that] we can target different audiences,” he said.
Lionetti-Maguire acknowledged there had been a “gold rush mentality” around competitive socialising.
But he added: “Regularisation of the market is already happening, as there’s been a number of companies that have fallen into administration.”
Lionetti-Maguire, whose company is backed by private equity firm Edition Capital, predicted that private equity firms and entertainment companies such as Netflix would soon buy other operators.
Richard Harpham, chief executive of XP Factory, which runs 26 Escape Hunt games room sites and 31 Boom Battle Bar entertainment venues in the UK, acknowledged that many small operators faced “constant cash challenges”.
Those would probably worsen following planned increases in employers’ national insurance contributions and the national minimum wage from April, he said.
However, he said his company had found it could site venues closer to each other than it previously anticipated. XP Factory, which is listed on London’s alternative Aim market, plans to add eight to 10 new Escape Hunt venues annually. In December, it said it hoped eventually to have a total of 100 sites, instead of the 50 previously anticipated.
“We need far smaller catchment areas than we thought we did,” Harpham said.
