Grounds for optimism

18 August 2005
Grounds for optimism

Since the Taylor Inquiry report was published in 1989, about 15 major new football grounds have been built in Britain - one new-state-of-the-art stadium for each new season played.

As the business of football becomes just as competitive as the tackles on the pitch, there's more and more pressure on each club to be the one stepping out at the start of the season with the new look. As well as puffing up the home fans, for whom a flashy new home signals ambition (and turns the away teams' support green with envy), these new stadia are also proving far more lucrative than their predecessors in terms of revenue.

Take Coventry City's new Ricoh Arena. The ground comes complete with a 6,000sq m exhibition space, which can be transformed into a banquet space for 5,000 or a concert venue for 8,000; there are three banqueting spaces built into the West Stand, the largest of which holds 1,000 and spectacularly overlooks the pitch from three floors up; it has 69 hotel rooms, including 17 serviced apartments, integrated into the stand; there is a gym, office space and a casino; and, of course, it has capacity for 32,000 fans to watch their team. he business opportunities seem endless.

The 10-year contract to run this potential goldmine has been won by Compass. And while it represents a significant opportunity, all operations director Gary Atkinson and operations manager James Street are thinking about now is how to get 70,000 pieces of equipment into the arena before the first home game this Saturday (20 August).

There's a 1.1m kitchen equipment order from Lockhart, five articulated lorries-worth of chairs and 50,000 glasses to organise. "It's the biggest fit-out I've ever been involved in," says Atkinson.

Promised innovation However, what Compass and Atkinson bring to the footballing equation is know-how and a promise of innovation. From recruiting Lee Littleford, the former head chef of the Belfry at Wishaw, Warwickshire, to introducing details such as bowl food and square plates, Atkinson is looking to modernise the experience - and not just for corporate guests. There will even be bean-to-cup coffee machines in three of the ground's four corners for fans who enjoy high-street coffee culture.

As Atkinson says: "What happens next elsewhere will have to be modelled from this. We're setting a benchmark."

In some respects, Compass and Arena Coventry Ltd (ACL), the council-formed company which owns the stadium, are taking a leap into the unknown. "The difference here is that we manage, operate and sell everything," says Atkinson. "We're promoting the concert space, for instance, and selling exhibition space, which is the first time we've ever done anything like that." For ACL, having a hotel and exhibition space under one roof is also a football first.

To that extent, it's not a guaranteed success. Each new stadium built in the modern era has sought to outdo the last, but there's always a risk in being a pioneer.

The first club to introduce a hotel into the equation was Chelsea. Although Chelsea Village, as it was first branded, enjoyed limited success - there was good occupancy on match days, for example - the club has had to rebrand the operation (now the Hotel at Chelsea) and chase new business.

"Capturing the leisure market for 30 match days each year is not enough to make the business profitable," says Paul Mulcahy, managing director of Chelsea's hotel and stadium. "So we refocused our efforts in terms of business mix, and are now aiming more at the residential conference market, to make effective use of the meeting space."

The tactic is paying off for the London outfit. Over the past 12 months, occupancy at the hotel has been close to 80%, representing a 23% increase in yield. "This is much bigger than the general trend," says Mulcahy.

The same challenge - to attract revenue in an increasingly congested market - faces the Ricoh Arena. Atkinson's solution is what he describes as "sweating the asset". With the hotel, for example, he has tweaked designs so that each room can be transformed by a single member of staff, in only half-an-hour, into a meeting room and hospitality box for match days. "Maximising revenue is about flexibility," says Atkinson. "But the secret to this arrangement is making sure that people don't feel like they're sleeping in a foldaway bed."

Improved experience To improve the experience, Atkinson also insisted on shower screens rather than curtains, better-quality bath products rather than soap, and details such as a hand-held Micros Fidelio property management system so people can be checked out while taking breakfast. "We don't want it to be budget," Atkinson says, "but we do want it to be competitive."

Atkinson is also confident that the stadium's visibility from the M6 motorway will create steady demand. The rooms are not only convenient but overlook the pitch, offering more character than other three- and four-star competitors in the area.

Another challenge is the exhibition space. Birmingham's NEC, the largest exhibition space in the country, is little more than 10 miles away, and obviously dwarfs the Ricoh's capacity. However, Paul Fletcher, chief executive of ACL, says it is exactly this size difference which will help. "The NEC is massive, whereas, in terms of the size of exhibition we can handle, the Ricoh Arena is a minnow," he says. "A lot of shows are too small to get in there, so we can trade from the scraps off their table."

Both men are aware, however, that increasing sophistication must not be at the expense of the core market. "We have got to be all things to all men," says Atkinson. Compass has thus renewed a contract with Shires, the same pie company which supplied the club's old Highfield Road stadium. But he has improved how the kiosks are arranged on the main concourse, with drinks and food sold together (one queue, rather than two) and increased the number of EPoS systems.

Importantly, financial targets are more elastic at the Ricoh Arena. Although Coventry City FC has been in dire financial straits, the city council came to the rescue by buying the land for the new arena on the site of an old gasworks. By selling a chunk of this to supermarket operator Tesco, most of the costs of the stadium were immediately paid.

Compared to the cost of the new Wembley national stadium in London, which has already ballooned to nearly 750m, the budget for the Ricoh Arena was a slender £113m.

"The key aspect of the arena is that it will make money straight away," says Fletcher. "Normally, most new-build stadiums need to be paid back over 20 years. A profit in year one will be unique."

For councils involved in creating new stadia, there's also massive opportunity for urban regeneration. New grounds in Bolton and Huddersfield both proved that wealth could be created in poorer communities, while at the Ricoh some 3,000 jobs will be created. And the former ground at Highfield Road, closer to the city centre, is being redeveloped with new homes and retail and leisure opportunities.

Such support from the councils, combined with competition among clubs, means there's likely to be no slowdown in the construction of new stadia. Time will tell whether the demand is there to make them a success, but expect each to enter the market with increasingly sophisticated facilities.

"We're on our way to wem-ber-lee"
One stadium that will have no worries about markets and demand is the new Wembley national stadium in London. Despite the saga surrounding its construction, there's no doubt that, when the new stadium opens next year, every football fan will want to go there.

"Nothing is going to leapfrog this stadium until it is rebuilt, because no one will be able to match the demand," says Simon Dobson, managing director of Delaware North (UK), which won the 25-year contract to provide food and drink at Wembley.

Delaware North (UK) is the new arm of Delaware North Companies (DNC), the international sports stadia, recreation and airport concessionaire with a turnover of about $1.8b (£995m) each year.

Until the Wembley deal, DNC didn't operate in the UK, but, adding this to Arsenal's Emirates Stadium contract (see opposite), the company has become the biggest stadium contract caterer in the UK in terms of turnover.

However, for Wembley, much rides on the hospitality provision. Dobson, once a managing director for Sodexho, is confident. "Although we're new to the UK, we have credible experience from around the world," he says. "We run more than 50 international stadia, including the Telstra Dome and the Melbourne Park stadium in Australia."

But with an estimated £750m turnover over the life of the contract, the size of the task at Wembley is massive. There are about 17,000 seats given over to Club Wembley, the membership scheme that will guarantee a place at matches. This combines 166 corporate boxes and 10-year seat licences.

For the general public, who will occupy the first and third (upper) tier of the stadium, Dobson's mission is to get them to arrive at games earlier and to stay on for longer. Open-air terraces have been positioned around the top-level concourse, where giant screens will provide pre- and post-match entertainment. Seventy-six kiosks and bars will service these two tiers.

All this will be served by some 96 kitchens, which would occupy a combined area half the size of the pitch - the largest permanent kitchens in the capital. Delaware North also has the right to market stadium facilities for banqueting, conferences or any other event.
And Dobson is not ruling out using the Wembley kitchens as a production hub for events outside the stadium, too.

Taking a shot at Arsenal
Delaware North's success in landing the Wembley Stadium deal helped it tremendously when it was invited to pursue the food and retail contract at Emirates Stadium, the new 60,000-capacity north London home of Arsenal FC, writes Ben Walker.

Negotiations started in November 2004 after Compass, the caterer at the club's Highbury stadium since 1982, decided to pull out of major capital expenditure programmes.

Delaware North inked a 20-year deal in March this year. The terms see Delaware North spending £10m on the catering facilities during the construction phase and a further £2.5m in the first three years after opening.

All the facilities will be owned by Arsenal FC, and Delaware North will make its profit from running the catering, after paying the club a percentage of turnover. Total turnover for the 20-year contract is predicted to be £20m.

A strong emphasis on the latest technology will make for smooth delivery of the diverse food offer, including corporate hospitality, casual dining and retail concessions.

Full use will be made at the Emirates Stadium of devices common in high-street restaurant chains but rare in the UK's football stadia - such as electronic table registration, hand-held waiter service, and the latest EPoS systems.

"Technology is absolutely crucial for delivering customer service, and [gathering] invaluable customer data about what's selling," explains Simon Dobson, managing director of Delaware North (UK).

When the stadium opens, in time for the 2006-07 season, 35 kiosks at concourse level will serve hotdogs, burgers, fries, fried chicken, sandwiches, wraps, soft drinks and beer. A glycol cooling system will keep drinks ice-cold, and multi-dispensing units will pull four pints in five seconds.

Commercial kitchen designer KCCJ was contracted to fit out the eight kitchens that will serve the restaurants. Its past clients include the Lowry hotel in Manchester and Harry Ramsden's national rollout programme.

In the north building, there will be a 300-cover public restaurant offering panoramic views of the stadium, with seats in the £15 to £25 price bracket. This will offer a contemporary three-course menu with three sittings expected on a match day. Moving on to the hospitality offer, there will be 150 private boxes served by 75 pantries. Season ticket holders will be entitled to use four restaurants, one at each corner of the stadium, seating 7,000 fans.

While menus have not been finalised, two restaurants are expected to carry buffets and live cooking stations, with prices per head from £35 to £45. The other two will provide formal Á la carte dining, with prices in excess of £45 per head.

All 19 full-time Highbury staff have transferred under TUPE regulations to Delaware North's payroll. That number will climb to 24 when the Emirates Stadium opens, with 1,100 casual catering staff on match days.

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