What you need to know

Even before the COVID-19 pandemic struck, delays in replacing or refurbishing ageing swimming pools meant that 40% of these facilities were considered at risk of closure over the coming decade. However, the damage wrought by the crisis is such that industry associations fear that up to half of all leisure centres could be lost by the end of 2020 without urgent new financial support.

With enforced leisure centre closures extending beyond those imposed on many other business sectors during the pandemic and only around two thirds of sites re-opening by early September, the market is set to see revenues fall by 60% in 2020.

The principal threat to the sector’s long-term recovery is that it fails to resolve the underlying issues of lack of investment and unsustainable operating models that magnified the impact of the COVID-19 crisis when it struck.

The most significant opportunity for public leisure centres and swimming pools in the next normal of the post-pandemic period lies in positioning themselves as key enablers of the healthier society that changes in public policy and consumer behaviour are expected to promote.

Key issues covered in this Report

  • The impact of COVID-19 on consumer behaviour and market dynamics in the leisure centres and swimming pools market

  • The concerns operators will need to address to give customers confidence to return

  • The need to rebalance revenues between the market’s swimming and fitness segments

  • The role leisure centres and swimming pools can play in delivering the ambitions of post-pandemic public health policy

  • The value of expanding the leisure centre and swimming pool offer beyond current core activities.

COVID-19: Market context

This update was prepared on 24 August 2020.

The UK’s first cases of COVID-19 were confirmed at the end of January 2020, followed by a small number of clusters the following month.

The country continued to operate as normal during what was termed the ‘contain’ period of the government’s response strategy, until numbers of diagnosed cases, hospitalisations and deaths began to increase dramatically in March.

At this point, the government moved into its ‘delay’ phase, introducing stricter self-isolation criteria, banning large public gatherings and, on 20 March, ordering the closure of a wide range of non-essential shops, pubs, restaurants and leisure venues including all licensed gambling premises.

A wider lockdown requiring people to stay at home except for essential shopping, exercise and work ‘if absolutely necessary’ followed on 23 March and remained in place until the end of May, when the peak of the pandemic had passed.

At this point, the government began to relax restrictions on social interaction outside the home and on 15 June amended the Health Protection Regulations 2020 to allow the reopening of all non-essential stores in England and made mandatory the use of face coverings on public transport, a requirement extended to all shops from 24 July.

In England, pubs, restaurants, hotels and hairdressers were able to reopen on 4 July, but outdoor swimming pools remained closed until 11 July and leisure centres and indoor pools were not permitted to resume operations until 25 July. In Scotland, outdoor pools re-opened on 29 May but indoor leisure centres and pools did not follow until 31 August. In Wales, leisure centres and swimming pools re-opened on 10 August.

Economic and other assumptions

Mintel’s economic assumptions are based on the Office for Budget Responsibility’s central scenario included in its July 2020 Fiscal Sustainability Report. The scenario suggests that UK GDP could fall by 12.4% in 2020, recovering by 8.7% in 2021, and that unemployment will reach 11.9% by the end of 2020, falling to 8.8% by the end of 2021.

The current uncertainty means that there is wide variation on the range of forecasts however, and this is reflected in the OBR’s own scenarios. In its upside scenario, economic activity returns to pre-COVID-19 levels by Q1 2021. Its more negative scenario, by contrast, would mean that GDP doesn’t recover until Q3 2024.

The forecasts included in this Report are based on these economic assumptions, supplemented by our understanding of the operational impacts of the COVID-19 pandemic and the activity restrictions imposed around it, such as the number of facilities likely to remain closed, the nature of the venues that re-open and the level of pre-pandemic visitation they are able to accommodate while adhering to social distancing requirements.

Products covered in this Report

This Report covers local authority-owned leisure centres and swimming pools, including facilities run on a ‘dual-use’ basis (eg facilities housed within schools, etc that are available for use by the public at certain times of the day or week). Market size is based on expenditure in publicly-owned leisure sites.

Private health and fitness clubs are excluded from the coverage of this Report, as are all other private leisure and swimming facilities that are not open to the general public, such as those reserved for employees, or association or trade union members.

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