11 Feb 2016
Diversification key to competing with ‘mega-trusts’, says BH Live chief
BY Jak Phillips
Broadening the reach of a business and diversifying into more sectors is essential for the survival of squeezed trusts in the UK’s highly-competitive leisure operations market.
That’s according to BH Live CEO Peter Gunn, who says the south coast leisure trust’s expansion into events, hospitality (across its own sites and those of other operators), and ticketing sectors has been key to staying competitive with much larger rivals in operating local leisure facilities.
The past couple of years have seen the emergence of several ‘mega-trusts’ who have grown rapidly to operate more than 100-sites each nationwide – 210+ in the case of GLL. The resultant economies of scale and strength have made it tougher for smaller trusts to compete for tenders, with many opting to ‘merge’ with their larger rivals for the sake of survival. The trend is expected to continue in 2016, with several industry observers tipping the march of the mega-trusts to continue.
Despite this, several smaller and mid-size trusts and local authority operators have continued to flourish. Gunn says diversification has helped BH Live to increase revenue by 60 per cent in the past five years, creating additional revenue streams to invest back into its core social objectives.
“Diversifying into emerging markets has differentiated us from our competitors in a marketplace where the emphasis is increasingly about adding even more value to contracts, continued investment and offering more to the communities we serve,” Gunn told Health Club Management.
“As an example of how we’ve broadened our offer over the past five years, we’ve been developing our event, hospitality and ticketing partnerships alongside leisure, health and wellbeing.”
In addition to managing leisure centres on behalf of Bournemouth Borough Council, BH Live operates hospitality services at 25 sites across London and the home counties in partnership with Fusion Lifestyle; as well as hospitality services at London Aquatics Centre, Copper Box Arena and Streatham Ice and Leisure Centre in partnership with GLL. In 2014/15 BH Live also hosted more than 400 shows, sold over half a million cultural, sporting and entertainment tickets and welcomed 93,000 conference and exhibition delegates.
Meanwhile, the company has continued to expand its leisure facilities and recently acquired two more health clubs from Fitness First and Virgin Active, both of which will be operated by BH Live independently.
“Our reach across the south has been significantly boosted and this diversification supports our overall growth strategy; creating more opportunities, employment and generating additional revenue to invest in furthering our social objectives,” added Gunn.
“With even more expansion plans in the pipeline for the next 12 months, the diversifying model has certainly benefited our growth, but most importantly, it has given the communities where we operate even more choice.”
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