Business ideas for 2016: Activity bar

No longer satisfied by single purpose restaurants and bars, today’s digitally engaged millennial generation – typically those aged 25-34 – are searching for something a little more extraordinary from their leisure time.

With real earnings continuing to rise above inflation, consumers have more disposable income to spend on going out – recreational and cultural services was the second biggest expenditure for UK households in 2014, according to the ONS living costs and food survey.

But “the post-recession consumer has become far more discerning” – claimed the BDO 2015 Bars and restaurants report – and “some serious innovation to business models is needed to help stave against falling revenues”.

Activity bars are leading the charge by combining the hedonistic thrills of a bar or club with the simple pleasures of an activity or entertainment and are becoming increasingly imaginative in their quest to draw in punters. Coupled with a rise in sober adults; one in five adults in the UK do not drink at all now, demand for bars which offer more fun than just a cocktail Happy Hour is on the up.

With wallets and consumer appetite for more novel experiences growing, 2016 could be a great year to start an activity bar…

Starting an activity bar: Why it’s a good business idea

According to BDO’s report “expenditure in restaurants and bars is increasing more than any other consumer-focused sector”, but to stay ahead of the curve “new entrants to the market are launching enticing new propositions to consumers – and shaking up the traditional market considerably.”

With the myriad of bar, restaurants and entertainment options available, offering a truly unique experience will set you apart from competition and help to sway wavering consumers into trying something new.

A report from Mintel in August 2015 on the leisure habits of millennials found that the younger generation are “constantly on the lookout for new experiences, which can be as simple as trying a new type of food or going to a pub quiz”. In its survey of 1,000 UK internet users aged 16-35, it indicated there would demand for alternative bars offering food tasting, footgolf, and even Netflix streaming:

The clear advantage of an all-in-one service for food, drink and entertainment is being able to drive revenue through a number of different sources and keeping customers on site, spending, for longer. Not having to rely solely on one offering allows you to more easily experiment with different elements of your business without having to worry about failure.

Euromonitor International’s June 2015 report evidenced the growing need for bars and restaurants to offer more than just food and beverages. In its research, it commented that “a new group of gourmet consumers, those aged 18-35, are often seeking affordable but gourmet food and a distinctive dining experience.”

Activity bar business opportunities

The relative youth of this burgeoning movement means there are still plenty of unexplored avenues to venture down, but one of the most popular routes is to open a venue based around a social sport or game.

Bounce operates a social ping pong bar, with 28 tables across its two London locations in Shoreditch and Farringdon. Available for group bookings, each table accommodates 20 and includes full service from its cocktail bar and pizza restaurant. With a Chicago site slated for launch this spring, the company is expecting turnover to reach an impressive £35m.

Bounce co-founder Adam Breeden, alongside Steve Moore and Paul Barnham, has recently launched Flight Club, a social darts venue aiming to bring “Britain’s most loved pub game” to a younger, hipper crowd – and it would seem they’ve hit the bulls eye again, with the business already set to turnover £4.5m.

Once a staple of dreary out of town leisure or shopping centres, even bowling has seen a revival on the social entertainment scene. Brooklyn Bowl in the O2 Arena, All Stars and Hip Hop ‘N’ Bowl take the classic bowling experience to the next level with cocktail bars and American style diners.

You could also go down the pop-up route like crazy golf pop-up Swingers. Following the success of its first venture in Shoreditch last year, the company is to open a new site early in 2016, featuring nine-hole crazy golf courses, a clubhouse with a gin terrace, three street-food outlets, four cocktail bars and a variety of spaces for private, group and corporate hires.

On the more low-key end of the scale, a board or video game themed bar or café, like Draughts in Hackney represents a low cost option with a more laid back atmosphere.

Or, you could shun activities altogether and go for a more sensorial experience akin to London’s ICEBAR – due to open a second site in the capital this year – where everything including the walls, bars, tables and even your own personal glass are made from Northern Sweden’s Torne River ice.

Although not strictly an activity bar, escape games such as Breakout; which give groups an hour to escape from a locked room by solving puzzles, are also increasing in popularity.

Insider opinion

Co-founder of Bounce, Adam Breeden, has commented:

“Evidently, the trend is for businesses to be a jack-of-all-trades, providing customers with a one-stop destination for food, drinks and entertainment, with customers increasingly looking for more than just alcohol to fuel their nights out.

“With the advent of the Internet of Things (IoT) as well, there will be a greater need for businesses to continue innovating to remain relevant.”

Published Jan 2016