Local Authorities Leisure example essay topic

Esteban Caracas - NOVEMBER, 2003 IMPORTANCE OF COMMERCIAL PROVIDERS OF LEISURE 1. WHY IS IT IMPORTANT FOR COMMERCIAL PROVIDERS OF LEISURE TO DIVERSIFY INTO DIFFERENT AREAS OF PROVISION? It is important for commercial providers of leisure to diversify into different areas of provision in order to maximise income, raise awareness (profile of company) for example increase one shop to one hundred shops, spread over the country, providing the same product / service. This would make the company a specialist market niche. This process is known as horizontal integration, where the company chooses to have a core business which they expand on but do not vary the product or service they are providing. An example of a special market niche company would be "David Lloyd" which concentrates on health and fitness as opposed to a diversified company which would be for example "Whitbread" who now own Marriot Hotel, Costa Coffee, Pizza Hut and Travel Inn.

The disadvantage of not diversifying into other areas is that the company could be at risk of being taking over by a diversified leisure company such as Whitbread. Vertical integration minimises the risks and enables your company to target different areas, different people and widen the capacity to increase income. For example using Whitbread again they have diversified into areas which enable the to succeed all over the UK. Using the vertical integration method it allows a company to follow trends and "cash in" on fads, crazes etc. This time next year the general public may not be drinking coffee at all which would result in the Costa Coffee chain being worthless, but this would not be as damaging to Whitbread with their other interests as it would be to a company who only owned a coffee shop. Many companies for example Hilton have not diversified too much but remain very much in the hotel industry but have 499 hotels worldwide, 147,667 rooms worldwide.

They have an astonishing 98% brand awareness worldwide and a 72% overall guest satisfaction. From their website they appear to diversify only in franchising Hilton Family Hotels providing a powerful network of support to franchisee. Selling themselves very much as a large family. 2. SHOULD LOCAL AUTHORITIES DISPENSE WITH THEIR LEISURE SERVICE PROVISION AND LEAVE IT TO THE OTHER TWO SECTORS TO SATISFY THE NEEDS AND WANTS O THE LOCAL COMMUNITIES?

There are a number of options local authorities have to enable them to move forward, these include: -. Joint provision, e.g. between tiers of authority. Dual use, e.g. sports hall at a school managed by a local council. Local authority participation in companies.

Facilities management contract. Management / employee buy-out / buy in. Sale. Sale / joint venture. Independent non profit distributing organisation, with local authority involvement.

Independent non profit distributing organisation without local authority involvement. Private sector non profit distributing organisation By linking with the private sector skills and expertise can be gained. To overcome all the strict regulations Leisure Trusts have been defined as a good way forward for local authorities where you then have an investment company and a management company (operational) who form a limited partnership to carry out the commercial business. Within most local authorities Leisure still does not come very high on the budgets allocated to it. Education, Social Work and Housing appear to get the lions share resulting in old dilapidated buildings badly in need of repair or replacement. The National down trend in swimming means financial income targets are not being met putting further pressure on Leisure Managers to perform with out of date equipment, in poor facilities, with sometimes poorly training staff.

Entering into a Trust Status or partnership with a private partner would no doubt create great financial investment enable facilities to be rebuilt or at least refurbished and equipment to be replaced. The downside to choosing this provision could mean loss of staff who are perhaps not well trained due to historical financial restrictions within the local authority. Where local authorities meet the social inclusion policies of the Council, private companies may not wish to flex their pricing policies to allow access FOR ALL. Fear of the unknown, if the companies do not succeed what happens to the facilities and staff in ten years time?