IN MY OPINION

IN MY OPINION - Chartered Management Institute companion David Thomas, Whitbread's CEO, outlines how the leisure sector is responding to rising consumer demand.

by DAVID THOMAS
Last Updated: 31 Aug 2010

Chartered Management Institute companion David Thomas, Whitbread's CEO, outlines how the leisure sector is responding to rising consumer demand.

Simply put, the majority of us have got less time and more money. Unless, of course, you've recently retired, when you're likely to have more time, more money and - increasingly - more energy. Yet however you cut it, the UK's leisure industry faces both opportunities and challenges in the future as it adapts itself ever more quickly to suit the constantly changing needs of today's consumer.

Today, leisure is no longer an optional extra in the mind of the UK consumer.

In 2001, the industry was worth some pounds 178 billion, and this year that figure could be as high as pounds 191 billion, double what it was just over a decade ago. It's a direct result of changing demographics and life-styles, increasing prosperity and the greater availability and choice provided by the industry.

Personal disposable income grew by about 11% in real terms between 1996 and 2000. Those who work find themselves under increasing pressure - the UK puts in one of the longest average working weeks in Europe - but when they are not working, they want to use their time to best advantage. We're living in a cash-rich, time-poor society where there's easily available credit, a low propensity to save and a new trend on the block: 'treating', or the purchase of goods and services as a personal 'feel-good' factor or reward.

And while consumers have been getting richer and more discerning, we in the business of leisure have been busy giving them more choice - doing the research, studying the demographics, isolating the 'occasions', developing the menus, finding the sites, planning the decor and unleashing new brands onto the market.

Some do well, others less so - but we have to stand back, take stock and decide what our customers keep coming back for, what they really want and how we, as an industry, can provide it.

Using what we do at Whitbread as an example of best practice, meeting the guests' needs means addressing three key areas: the right brands, the right experience and the right people. As an industry, we need to invest in these things - they are the keys to massive opportunity.

First, we're not going to convince people to spend precious time with us if the brand proposition isn't right. I won't say that we get it right all the time, but our home-grown brands - Travel Inn, Brewers Fayre and Brewsters - are leaders in their markets, as are David Lloyd Leisure and Costa, brands that we acquired as small businesses in 1995.

I'm proud of Whitbread's reputation as a brand manager - a company that has spotted the trends and catered for the customers' needs, often before they themselves realised the need was there.

But by itself, the proposition won't deliver results. It has to be the rule that consumers' experience meets or even exceeds their expectations.

It would be simple to say the experience is the smile on the face of the hotel receptionist, the courtesy of the waitress, the presentation of the food or the professionalism of the personal trainer, but these efforts would be just the visible tip of the iceberg.

The experience at Whitbread might include such initiatives as 'taggards' on smaller children in Brewsters restaurants, so that if they wander towards the doors, an alarm goes off; or the 'club' atmosphere in David Lloyd leisure clubs, so that you're not just visiting the gym but allowing all the family to enjoy a relaxed atmosphere. If the experience is right, if the guest feels special, then they'll be back for more.

The third piece of this jigsaw is made up of the people on whom we rely on to deliver this experience and to be the ambassadors for our brands; without them, none of it would be possible.

The leisure industry now accounts for one in 10 UK jobs. In the future, it will account for one in five of all new jobs created. Whitbread alone employs about 65,000 people, and every individual among them is an ambassador for both our brands and our company.

Recruitment, however, is a huge issue. Whether we like it or not, and whether it's true or not, the leisure industry still has a reputation for low pay, long hours, poor conditions and lack of prospects. A great organisation called Springboard UK works with us to raise the profile of careers in the leisure industry, among other things. It runs a Careers Festival Week (which Whitbread will be chairing in March) and it needs the industry's support.

Once we've got the right people, we need to invest in them: train them, hone their skills, nurture their talents - confident that they'll reward us for it. I might be stating the obvious, but here's the equation - satisfied people, satisfied guests, satisfied shareholders.

The leisure industry is both fast-moving and innovative and has huge growth potential, even in uncertain times such as these. To emphasise our mantra - leisure is not an optional extra; it has become a basic right, and we have a duty to ensure that our guests can exercise that right.

In doing so, and in doing it well, we ensure that our businesses continue to grow and offer genuine value opportunities for investors.

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