12/11/2024
**UK Indoor Play Industry Faces Dire Consequences Following Budget Announcement**
Immediate Measures Needed to Prevent Sector-Wide Closures and Job Losses
The UK indoor play industry, a vital contributor to the leisure economy and a key employer of young and part-time workers, faces a severe financial crisis following recent budget announcements. This budget, which brings a dramatic rise in operating costs through increased National Minimum Wage and reduced business rates relief, threatens the survival of many family-run businesses still recovering from the impact of COVID-19.
The effects of these budget measures will be felt heavily by the end consumer, with price increases of 10-15% becoming necessary just for businesses to break even. For many families, especially those on lower incomes, indoor play—once an accessible and affordable form of family entertainment—will become increasingly out of reach. With operators facing immense financial pressures, many will be forced to cut staff, leading to job losses for young workers as companies look towards automation to manage costs. For some centres, it will no longer be financially viable to remain open, resulting in more closures across the country. Additionally, reduced investment will strain suppliers within the industry, creating a ripple effect that impacts the entire indoor play sector.
Mark Whittington, Director of Segsbury Ltd. (trading as DJ’s Play, with three sites), highlights the overwhelming impact: “Our wage bill alone is set to increase by 14%, largely due to a 16% minimum wage rise for younger employees, coupled with National Insurance changes. On top of that, the reduction in business rates relief will more than double our rates bill. Combined, these factors force us to consider price increases, but given the cost-of-living crisis, we fear customers simply won’t be able to absorb them. We’re now forced to consider reducing operating hours and shelving any plans for growth.”
Ken Lunn, Director of Jack in the Box and Finance Director of the Association of Indoor Play, states, “The cost increase from this budget alone will erase 75% of our total net profit before tax, leaving us with almost no capacity to reinvest. We work long hours to support our communities, and our customers are highly resistant to price increases. The government says it’s protecting working people, yet as a small business owner working 80 hours a week, I’m left questioning where I fit in. To survive, we’re looking at potential layoffs, a devastating prospect for our 25 employees.”
This sentiment is echoed by Gordon Forster, Managing Director of Safari Play Venues, which employs over 120 staff. “Our anticipated cost increase will reduce our profit by up to 35%, impacting our ability to reinvest and improve our facilities. We’ll need to reduce opening hours and pause all planned capital investments for the next year. Raising prices is an option, but with inflation already so high, there’s a limit to what customers can bear. The Chancellor’s approach will cut jobs, reduce investment, and fuel inflation in the service sector, which defeats the very purpose of these measures.”
James Sinclair, owner of the Partyman Group, underscores the crisis, calculating the effects across his business. “For us, this means an additional £2.4 million in costs annually. From what we generate in operating profit, I’m now forced to make tough decisions, including selling assets, cutting staff, changing operations, and potentially closing less profitable business lines. It’s a harsh reality for any business.”
Janice Dunphy, Owner of Web Adventure and Chair of the Association of Indoor Play, said, “Even as a large attraction, we’re facing the reality of around 59% of our profit being wiped out by these increases. When you add the impact of the business rates hike, it leaves us in a position where we can’t invest in the business or retain our current staffing levels. This budget has placed an enormous strain on our ability to operate sustainably.”
Andrew Kirkwood, Owner of Snakes & Ladders (with three sites), shared similar challenges: “We estimate that the additional business rates will cost us around £36,000, additional payroll costs around £100,000, and additional National Insurance around £45,000—about £180,000 in total. This will take us from profit to loss. We’ve raised prices by 6% to help cover these costs, but higher prices don’t necessarily increase revenue, as they often reduce visitor numbers. If revenues don’t rise sufficiently, we may have to reduce our headcount to survive.”
This budget marks a particularly dark time for the indoor play industry, which was among the hardest hit during COVID-19, losing 10% of operators as a result. Already struggling to recover from those losses, many businesses now face a bleak outlook. The Association of Indoor Play (AIP) urges the Chancellor to recognise the unique pressures on small leisure and hospitality businesses, without which this vital industry may face an even greater crisis, with far-reaching impacts on communities and families across the country.
This latest budget comes on the back of successive years of significant minimum wage increases, compounding challenges for the indoor play industry. With the introduction of a cost-of-living component into the minimum wage calculation, businesses now face soaring payroll costs that threaten already thin profit margins. Moreover, the Employment Rights Bill, which proposes to equalise pay for 18-21-year-olds with that of those aged 21 and above, could further drive-up expenses for businesses that rely heavily on young staff. For operators, many of whom provide vital first-job opportunities for young people, these measures represent mounting pressure, pushing the prospect of sustainable operations out of reach.
For further info:
Maria Cantarella
CEO
Association of Indoor Play
M: 07785258150
E: [email protected]
W: www.associationofindoorplay.org
Office Tel. 0203 951 8640
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About the indoor Play Industry
AIP represents approximately 1,100 operators with indoor play facilities ranging from single site play cafes and role play centres to multi-site businesses. We cover traditional indoor play, role play, laser, farm parks, mixed leisure facilities and baby sensory.
The indoor play industry contributes £308m to the Treasury each year. We employ more young people than an average industry as some 65% of employees are under the age of 25, equating to 14,400 young people. We are represented by the Government's Department for Digital, Culture, Media & Sport (DCMS) and make up 10% of the who DCMS represents, outstripping cinemas. The indoor play sector welcomes 60 million children visits for indoor play, role play and baby sensory. A quarter of our members also run on site nurseries.
The industry has hardest hit by the pandemic, with centres only allowed to open for 12 weeks in total. Indoor playcentres are recognised as a cornerstone to children's social and physical development, provides support with the mental health of parents and children and is a stepping-stone in socialisation.
The Association of Indoor Play (AIP). UK's largest member network of indoor play including soft play, role play and other children's play activities. Promoting the vital contribution that indoor play, role play and soft play have on children's mental and physical wellbeing. Helping children to play,...
