Final Industry Project Outdoor Adventure Industry December 1, 2014 Maris Fraser, Straun Wefers and Matt Doucette Table of Contents Industry Barriers………………………………………………………………………………………………………………………………………3 Geographic Scope……………………………………………………………………………………………………………………………………6 Competion…………………………………………………………………………………………………………………………………………….10 Marketing………………………………………………………………………………………………………………………………………………18 Demographic Profile………………………………………………………………………………………………………………………………19 Staffing Profile……………………………………………………………………………………………………………………………………….22 Environmental Considerations……………………………………………………………………………………………………………….23 SWOT…………………………………………………………………………………………………………………………………………………….25 Sources………………………………………………………………………………………………………………………………………………….28 2 Industry Barriers History: Early Canadian Mountaineering To look at the history of Indoor Climbing Gyms you must first look at the history of rock climbing and mountaineering specifically in Canada. The Development of the sport is intertwined with the development of the country and industrialized Canada. The first professional Mountaineering guide started in the year 1896. By this time expansion of the Canadian Pacific Rail Way had expanded across Canada from coast to coast opening up expensive retreats for tourists to experience the vast beauty of Canada. Rich European tourists wanted a way to see the natural beauty of the Rockies but the harsh and rugged terrain made it impossible for the average traveller. This is when the influx of climbing guides appeared. The first of the Swiss mountaineers would arrive in Canada the following year in 1897. The Rockies were a gold mine when it came to attracting tourists and they needed to be explored. That is why so many Swiss and other European guides who had experience working in European mountain ranges such as the Alps were needed and recruited. They had the experience to safely and efficiently navigate the ranges while supervising wannabe mountaineers. In order to attract international attention, it needed to be compared to another well-known mountain range such as the before mentioned Alps. This sparked interest and gave rich European travellers a chance to bag their own peak. New climbers were given a chance to claim a piece of real estate in the vast wilderness of the Canadian Rocky Mountains. In 1906, the Alpine Club of Canada holds its founding meeting in Winnipeg; this would be the start of a more modern era of climbing where a community of climbers could gather and slowly develop. Different certifications, trips, support, and lodges would be developed over Canada. Another Prominent organization that developed in 1963 in the area would be the Association of Canadian Mountain Guides. In fact, the ACMG become the first non-European member of the International Federation of Mountain Guides Association. These bodies set the standards for practicing professional mountaineering. Climbing in their respected countries would be shaped by the rules and standards of these organizations. This not for profit organization is also known for setting other standards in mountain travel such as heli-skiing regulations. This starts to lead us into the relatively young industry of indoor climbing gyms. A boom hit in the late 80’s and early 90’s where climbing started to make its way nearer to the main stream. Gyms started to open up on the west coast making its way all throughout the country. Gravity climbing gym in Hamilton, Ontario is one of the largest indoor climbing gyms in Canada let alone Ontario. Having held numerous Canadian climbing championships the gym has solidified itself in Southern Ontario climbing culture. Amateur recreational climbers to various local talent have the ability to learn and develop their skills in a safe and easily accessible indoor facility. Weather in Canada has always been a factor so having the ability to continuously develop potential even through the off seasonal is pivotal. Competitive climbing has certainly boosted popularity as a new and marketable sport is making its way into the limelight. Statistics show that the majority of climbers North American climbers are mid to late 20-year-old white males who often do not visit a gym more than 10 times in a year. This shows how the ability to bring climbing too more urbanized areas has made climbing a more prominent sport in Canada. In the last 10 years indoor climbing facilities have made a subtle yet noticeable climb in popularity and it shows no signs of slowing down. 3 Trade Organizations and Associations The indoor rock climbing world has many trade organizations associated with the sport. These associations are on many different levels, from regional to international. While some of these organizations are specific to indoor rock gyms, many are all-encompassing when it comes to the sport of climbing in general, and represent both the indoor and outdoor aspects of the sport. Some of these include… OCF (The Ontario Climbing Federation) The OCF was established in 2011 to help the sport of climbing grow in Ontario. It is more specifically related to competitions of climbing around the province, as coaches and competitive athletes must have a membership with the OCF in order to compete. ACMG (Association of Canadian Mountain Guides) The ACMG is the most well-known association when it comes to any aspect of climbing in Canada. The ACMG’s objectives include establishing and maintaining a high standard of professional competence for its members, represent its members in dealings with official bodies, and act as a public relations body to promote the sport of climbing in all aspects. Most (if not all) climbing companies in Canada deal very regularly with the ACMG, or have members of the association working for them Certifying Bodies There are a couple of certifying bodies which set the standard for professionalism in the climbing industry. These certifications are more often specific to the indoor climbing world, but outdoor climbing certifications are most often transferable to the gym. CUI (Challenges Unlimited Incorporated) Challenges Unlimited Inc. has been a leader in designing and building Challenge Courses, Climbing Wall and Zip Lines in Canada since 1988. As a founding Professional Vendor Member of the Association for Challenge Course Technology (ACCT), CUI has been part of the development of industry standards to promote well managed Challenge Course Adventure programs within Canada. CUI is a leader in the design/construction of climbing walls, as well as the certification of instructors and the inspection of walls and climbing courses across North America. (CUI, 2014.) CUI is quite effective in the way they certify, and that mainly has to do with how credible they are through word of mouth, as well as how professionally they run their operations. As the Canadian Leader in challenge course construction, it puts them in a unique position, as not only are they in charge of building courses, but also in certifying that they are safe. While some may look at this as a negative (they may be able to certify their own “shady” work,) it also gives them some insight on what to look for during a safety inspection of a course. 4 ACMG (Association of Canadian Mountain Guides) Once again, the ACMG provides a multitude of certifications across the entire scope of the sport of climbing. They do offer specific indoor climbing courses for employees, from their Level I certification focusing on basics to their Level III focusing on training instructors. ACMG guides/instructors are trained, examined and certified by an independent, internationally recognized body to the highest standard in Canada. This process is carried out through a partnership between the ACMG and Thompson Rivers University (TRU) in Kamloops. In this relationship, TRU provides the course instruction and administration while the ACMG consults on the technical standards for each level of certification. This ensures that the training and assessment are both academically and experientially rigorous. (ACMG, 2014) This process of 3rd party certification is fantastic, as it keeps both organizations honest and held to a standard when certifying instructors, for indoor climbing, mountaineering or otherwise. This makes them extremely effective and credible. Laws and Regulations There are many standards to uphold when starting a gym. The organizing body responsible for setting these industry standards in Canada is the Climbing Wall Association. The four main points they overlook are design and engineering, inspection, operational standards, and certification standards. A numerous amount of by laws can be found at http://www.climbingwallindustry.org/images/uploads/CWA-Bylaws-Approved-08-27-2011.pdfds. An annual report is developed and upgraded with the needs of the industry as standard of practice is an ever-growing area as new gear, equipment, engineering are always evolving. Barriers to Start Up One of the obvious barriers to start-up in the indoor rock climbing business is the initial costs involved. Most rock climbing gyms are in huge indoor locations, which then have costs like hydro, rent, building permits, etc. The initial investment when starting the business is a large barrier. For example, the indoor climbing gym franchise Gravity Vault has 13,000 square feet of climbing space for a typical location, as well as walls 35 feet or higher. The total investment to open a gym is anywhere from $746,400 to $1,200,000. Gravity Vault owners used U.S. Small Business Administration loans and personal savings for financing, but the initial cost can be quite daunting. (McKinney, 2014.) Another barrier to a new rock climbing gym would be the legal issues that need to be dealt with pre-emptively before actually starting the business. As indoor rock climbing takes place solely inside the establishment, anything which causes injury to the client could be a potential legal issue without a completely bombproof waiver, as well as attention to detail when setting up safety around the gym. These costs of consultation with legal professionals as well as construction agencies such as CUI are another financial barrier. As far as geographic and cultural barriers to rock climbing, as a newer sport, it faced adversity before it gained in popularity. Being a niche market comes with both advantages and risks, as being the only one involved in a sport gives an automatic monopoly on the sport in an urban centre. However, if 5 the sport is not popular, this can come with a huge loss. However, the culture of indoor rock climbing has grown from those who wish to train for large rock climbing to a more generic market, including families looking for more of an experience than a gym. Because of the growth of the sport, what been a barrier in the past to the sport of climbing has become an opportunity. Geographic scope of industry Indoor Rock Climbing is a sport that has taken off worldwide since the early 1990s. Climbing gyms can be found in major city centers on every continent worldwide. Areas leading industry in number of gyms are the United States, United Kingdom, Germany and Japan. (Indoorrockclimbing.com, 2014) According to the British Mountaineering Council there are over 5 million user days on the 350 indoor locations. The number of youth participating in climbing competitions has risen by 50%. (Gardner, 2013) According to a survey done by the Outdoor Foundation of the 6,148,000 participating in mountaineering activities 4,313,000 of them take part in bouldering, sport climbing, and indoor climbing. In 2009 climbing participation rates rose 24.4%, the fifth highest increase of outdoor activities. (Green, 2014) Although indoor rock climbing may seem small in comparison to other popular outdoor activities such as fishing, the industry itself is very healthy and growing. In North America specifically, climbing gyms are located mainly in large city centers in the Western regions. This is because the climbing culture tends to be stronger in mountainous areas and the demand for training centers is stronger. The following is a list all the indoor rock climbing walls in Canada and their locations on the map. For a detailed list of all climbing gyms worldwide please visit: http://www.indoorclimbing.com/worldgyms.html 6 Alberta (21) Ascent Climbing Wall Sport & Wellness Centre, University of Lethbridge, 4401 University Drive, Lethbridge, Alberta Augustana University Climbing Wall 4901 - 46 Avenue, Camrose, Alberta Canada Banff Centre Climbing Wall 107 Tunnel Mountain Drive, Banff, Alberta, Canada T1L 1H5 Best Body Fitness #5 Beju Industrial Drive, Sylvan Lake, Alberta, Canada T4S 2J4 Calgary Climbing Center - Strong... 140 - 15th Ave NW,, Calgary, Alberta T2M 0G6 Calgary Climbing Centre #6, 7130 Fisher Rd SE Calgary, Calgary, Alberta T2H 0W3 Centennial Centre 4313-50 Ave, Bonnyville, AB T9N 2G8 Climb Edmonton 11635-154 Street Edmonton, AB Collicutt Centre 3031 30 Avenue, Red Deer, Alberta Crux Climbing and Bouldering Bay 9, 1415, 28th Street NE (16th and Barlow), Calgary, Alberta T2A 2P6 GPRC Climbing wall 10726 - 106 Ave., Grand Prarie, Alberta, T8V 4C4 Jasper Climbing Wall 303 Bonhomme Street, Jasper, AB T0E 1E0 Mount Royal University 4825 Mount Royal Gate SW, Calgary Alberta Odyssey Recreational Adventures ... 1715 - 20 Ave NW T2M 1H2, Calgary, Alberta Outdoor Program Centre Univ. of Calgary, 2500 University Dr NW, Calgary, Alberta T2N 1N4 Southland Leisure Centre 2000 Southland Drive SW, Calgary, Alberta 7 The Vsion #109 Boulder Crescent, Canmore, Alberta, T1W 1P2 University of Alberta PAV - 153 Van Vliet Centre, 87th Avenue and 116 Street, Edmonton, Alberta T6G 2H9 Vertically Inclined Rock Gym 8523 Argyl Rd,, Edmonton, Alberta Westside Recreation Centre Climb... 2000 - 69 Street S.W., Calgary, Alberta T3H 4V7 YMCA Calgary Shawnessy Branch In... Suite 400, 333 Shawville Blvd SE, Calgary, Alberta T2Y 4H3 British Columbia (18) Beyond The Crux Climbing wall #2-1414 Hunter Ct., Kelowna, British Columbia Boulders Climbing Gym 1627 Stelly's X Road, Victoria, British Columbia Bulkley Valley Regional Pool & R... 1316 Toronto St., Smithers, British Columbia V0J2N0, Canada Cliffhanger Indoor Rock Climbing 98 Brigantine Drive, Coquitlam, British Columbia V3K 6Z6 Cliffhanger Richmond #520, 3771 Jacombs Rd, Richmond, British Columbia V6V 2L9 Cliffhanger Vancouver 670 Industrial Avenue, Vancouver, British Columbia V6A2P3 Cliffside Climbing Gym 954B Laval Crescent, Kamloops, British Columbia V2C 5P5 College of New Caledonia Boulder... Prince George, British Columbia Crag X indoor rock climbing wall 341 John St, Victoria, British Columbia Dogtooth Climbing Gym 102 - 806 9th Street North, Golden, British Columbia V0A 1H2 On the Rocks Climbing Gym 1980 Nth Isle Hwy.V9W 2G2., Campbell River, Vancouver Island, British Columbia Project Climbing Centre Unit 3 34100 South Fraser Way, Abbotsford, British Columbia, V2S 2C6 The Alternative 681 Industrial Way Unit B, Tofino BC, V0R 2Z0, Canada The Core 4010 Whistler Conference Centre, Lower Level, Whistler, BC V0N 1B4 The Edge #2-1485 Welch St., North. Vancouver, British Columbia The ROCK Wall Climbing wall #6 - 11455 201a St., Maple Ridge British Columbia V2X 0Y3 The Romper Room indoor rock clim... 4385-B Boban Drive,, Nanaimo, British Columbia, V9T 5V7 Vertical Reality Climbing Gym #202 - 7728 128th Street, Surrey, British Columbia V3W 9A1 Manitoba (2) U of M Climbing wall Frank Kennedy Centre, University of Manitoba Campus, 145 Frank Kennedy Centre, Winnipeg, Manitoba R3T 2N2 Vertical Adventures 77 Paramount Road, Winnipeg, Manitoba R2X 2W6 New Brunswick (4) Complexe Sportif Régional 167 boulevard Hebert, Edmundston, Canada E3V 2S8 NBCC St. Andrews Climbing Club 99 Augustus Street, St. Andrews, New Brunswick E3B 2E9 NBCCSJ Climbing Club Wall PO Box 2270, Saint John, New Brunswick E2L 3V1 Rock & Ice Climbing Club University of New Brunswick, Fredericton, New Brunswick Newfoundland (2) Wallnuts Inc. 57 Old Pennywell Road, St. John's, Newfoundland A1C 2Z5 YMCA Rockwall 7 Renouf Cres, Corner Brook, Newfoundland Nova Scotia (3) Dalplex Climbing Wall 6260 South St. Dalhousie Univ. Campus, Halifax, Nova Scotia, B3H 3J5 FHOCC (Formation Halifax Outdoor... HMC Dockyard (The wall is inside the Navy base on the dockyard 8 side.), Halifax, NS Ground Zero Climbing Gym Corner of John Savage and Wright Ave., Dartmouth, Nova Scotia Ontario (21) Active Fitness Centre 69 Peter St. S, Orillia, Ontario, L3V 7A3 Boulderz Climbing Centre #16 - 1444 Dupont Street, Toronto, Ontario Canada Bracebridge Sportsplex 111 Clearbrook Trail, Bracebridge, Ontario P1L1V9 Climber's Rock 5155 Harvester Road, Burlington, ON L7L 6V2 Coyote Rock Gym 1737B St Laurent Boulevard Ottawa, ON K1G 3V4 Georgian College One Georgian Dr., Barrie Ontario Gravity Climbing wall 70 Frid Street,, Hamilton, Ontario L8P 4M4 Guelph Grotto 199 Victoria Road South,, Guelph, Ontario In Play Inc. 18075 Leslie St., Newmarket, Ontario Joe Rockhead's Climbing wall 29 Fraser Ave,, Toronto, Ontario M6K 1Y7 Laurentian University Bouldering... 935 Ramsey Lake Road, Sudbury, Ontario P3E 2C6 Of Rock & Chalk 482 Ontario Steet,, Newmarket, Ontario L3Y 2K7 Peaks Indoor Rock Climbing 630 Welland Avenue, St. Catharines, Ontario L2M 5V6 Rock & Rope Climbing Centre 280 Perry St. unit 16, Peterborough, Ontario K9J 2J4 The Boiler Room 4 Catraqui Street, Kingston, Ontario K7K 1Z7 The Rock Oasis 27 Bathhurst Street,, Toronto, Ontario M5V 2P1 The Rock Oasis - Ajax 75 Centennial Road, Ajax, Ontario L1S 4S4 Toronto Climbing Academy 11 Curity Ave, Toronto, Ontario M4B 1X4 True North Climbing Inc. 75 Carl Hall Rd., Unit 14, Toronto, Ontario, Canada M3K 2B9 Vertical Reality 161 Middle Street, Victoria Island, Ottawa, Ontario Wilfrid Laurier University Athle... 75 University Avenue West, Waterloo, Ontario N2L 3C5 Quebec (19) Action Directe 95 Boul des Entreprises Suite 100, Boisbriand, QC, J7G 2T1 Adrenergie 1276 rue Ste-julie, Trois-Rivieres, Quebec G9A 1Y6 Allez-Up 1555 Saint-Patrick street, Montreal, Quebec H3K 1G6 Altitude Gym 35 Boulevard Saint Raymond, Hull, Quebec J8Y 1R5 Bloc Shop 1370 Chabanel Ouest Montreal, Quebec H4N 1H4 Centre d'escalade Délire 2485 Boulevard Sainte-Anne, Quebec, QC G1J 1Y3 Cepsum Climbing Wall University of Montreal, 2100 Edouard Montpetit, Montreal, Quebec, H3T 1J3 Club Tennis 10, ch. de la Plage des Cantons, Canton de Magog, Quebec J1X 5X8 Horizon Roc 2350 rue Dickson, Montreal, H1N 3T1 La Montagne en Ville Roc Gym 2350 Ave du Colisee,, Quebec, Quebec Le Mur Laval University,, Sainte-Foy, Quebec Le mur d'escalade de l'aqueduc 3198 Girouard Ouest, Saint-Hyacinthe, Quebec Le Vertical 1111 Rue Lapierre Montreal, QC H8N 2J4 Shakti Rock Gym 175 St. Viateur Est. Montreal, QC H2T 1Y1 Universite de Sherbrooke Sherbrooke Vertical Limit -Club Sportif Côt... 8305 Chemin Cote de Liesse, Montreal, Quebec Vertige 290 Brooks Sherbrooke QC J1H 4X9 9 Vertige Escalade 290 Brooks, Sherbrooke, QC J1H 4X9 Zero Gravite 4519, avenue Papineau Montreal QC H2H 1V3 Saskatchewan (2) Saskatchewan Science Centr 4903 Powerhouse Drive, Regina, Saskatchewan SK SW4N 0A1 University of Saskatchewan - PAC 87 Campus Drive, Saskatoon, Saskatchewan Source: http://www.mountainproject.com/v/climbing-gyms/107140516 Competition Profile Market Structure The market structure of indoor climbing gyms would be described as an oligopoly. An oligopoly market structure is one in which a small number of firms control the market share. The reason for this placement is based largely off of geographic barriers. While indoor climbing gyms by their nature technically need no natural environments and could be opened anywhere a gym could be built, the vast majority of gyms are operated in urban centres. In Ontario for instance, there are 21 indoor climbing gyms. However, only one of them is operated in a city with a population less than 78,000 people (Bracebridge Sportsplex.) The other 20 are operated within not only larger urban centres of Ontario, but within the top 70 populated cities in Canada. Because of this barrier, only a limited number of gyms can feasibly open in a given urban centre. Toronto for instance, has the largest population in Canada of over 2.5 million people, and yet has only 4 gyms operating. This shows that only a few operators can be successful per urban centre, and decreases the amount of gyms in a given area. Not only that, but it limits the locations of these gyms to largely populated areas. Profitability The vast majority of indoor rock climbing gyms are personal, professional enterprises. As stated previously, there can only be a small number of operators in any given urban centre, so the opportunity for a small “mom and pops” style operation is very unlikely to be profitable. While some climbing walls are smaller aspects of a lifestyle operation such as a “sportsplex,” most walls are professional enterprises in large urban centres. Statistics on how many climbers come through a gym are lacking, and are not displayed on each industry leader’s websites. Therefore, the profitability of a climbing gym will be based off our estimates. As previously stated, indoor climbing gyms have a very high start-up cost. However, once the gym is open and operating, they enjoy a relatively low cost of sales. The key for a newly started rock climbing gym would then be to grow their client base, and bring in more grouped clientele. At a modest yearly growth rate of 8%, sales and profitability would look similar to this. 10 The following is a projected sales forecast for a climbing gym in its’ first 2 years of operation. SALES FORECAST Unit Sales Year 1 Year 2 Day Pass 1,280 1,382 Ten Punch Pass 205 221 Month Membership 495 534 College Month Membership 181 195 Three Month Membership 190 205 Annual Membership 95 102 Annual Pay Plan 61 65 College Annual Membership 47 50 Family Annual Membership 26 28 Family Annual Pay Plan 20 21 Groups 157 169 Lessons 133 143 Climb Time 211 227 Junior Program 65 70 11 Summer Camps 105 113 Misc. 44 47 Total Unit Sales 3,315 3,572 Unit Prices Year 1 Year 2 Day Pass $14.00 $14.00 Ten Punch Pass $107.00 $107.00 Month Membership $63.00 $63.00 College Month Membership $48.00 $48.00 Three Month Membership $150.00 $150.00 Annual Membership $415.00 $415.00 Annual Pay Plan $44.00 $44.00 College Annual Membership $355.00 $355.00 Family Annual Membership $685.00 $685.00 Family Annual Pay Plan $78.00 $78.00 Groups $115.00 $115.00 Lessons $45.00 $45.00 Climb Time $60.00 $60.00 Junior Program $225.00 $225.00 Summer Camps $147.00 $147.00 Misc. $20.00 $20.00 12 Sales Day Pass $17,920 $19,348 Ten Punch Pass $21,935 $23,647 Month Membership $31,185 $33,642 College Month Membership $8,688 $9,360 Three Month Membership $28,500 $30,750 Annual Membership $39,425 $42,330 Annual Pay Plan $2,684 $2,860 College Annual Membership $16,685 $17,750 Family Annual Membership $17,810 $19,180 Family Annual Pay Plan $1,560 $1,638 Groups $18,055 $19,435 Lessons $5,985 $6,435 Climb Time $12,660 $13,620 Junior Program $14,625 $15,750 Summer Camps $15,435 $16,611 Misc. $880 $940 Total Sales $254,032 $273,296 13 Direct Unit Costs Year 1 Year 2 Day Pass $0.42 $0.42 Ten Punch Pass $3.21 $3.21 Month Membership $1.89 $1.89 College Month Membership $1.44 $1.44 Three Month Membership $4.50 $4.50 Annual Membership $12.45 $12.45 Annual Pay Plan $1.32 $1.32 College Annual Membership $10.65 $10.65 Family Annual Membership $20.55 $20.55 Family Annual Pay Plan $2.34 $2.34 Groups $6.90 $6.90 Lessons $1.35 $1.35 Climb Time $1.80 $1.80 Junior Program $6.75 $6.75 Summer Camps $44.10 $44.10 Misc. $10.00 $10.00 14 Direct Cost of Sales Day Pass $538 $580 Ten Punch Pass $658 $709 Month Membership $936 $1,009 College Month Membership $261 $281 Three Month Membership $855 $923 Annual Membership $1,183 $1,270 Annual Pay Plan $81 $86 College Annual Membership $501 $533 Family Annual Membership $534 $575 Family Annual Pay Plan $47 $49 Groups $1,083 $1,166 Lessons $180 $193 Climb Time $380 $409 Junior Program $439 $473 Summer Camps $4,631 $4,983 Misc. $440 $470 Subtotal Direct Cost of Sales $12,744 $13,709 As shown by the above projections, once a climbing gym has gotten past the initial “hump” of start-up costs, it can plan to enjoy growth and profits right away, if the gym is in a populous urban center with an interest in climbing. By the sheer number of costs and services provided, any indoor rock climbing gym would need to be a profitable, professional enterprise. Factors for success The major rock climbing gyms in our area are Vertical Reality, Altitude, and Coyote. They all fight for a share in the market. They all have regular clientele and take up a relatively equal share of business. As rock climbers, we have the luxury of having a more in depth look at things we like and don’t like about the companies. 15 Coyote- Coyote has a smaller facility which is jam packed full of holds and climbs. With tons of real estate to boulder, top roping and leading climbing fall close behind. This caters to the bouldering community and those more invested in bouldering tend to prefer to climb there based on route selection. Altitude- Altitude is on the Quebec side which is always going to draw in more French attention as well as a good portion of Ontarians. Having probably arguably the highest quality facility really tailors towards the baby boomers and more aged climbers looking for the cushiest experience. You may pay a premium but it is to be able to climb in a safe, fun, and efficient environment. Vertical Reality- Vertical Reality is more of an all-around climbing gym. In the middle of quality but with big walls. Offering higher walls intrigues rock climbers as it offers more extensive training which benefits climbers. Being able to push that last 10 meters is important on hard climbs which is why this company caters to outdoor climbers. All these companies have found their niche in the industry while all offering relatively similar things. It tweaking the type of climbing discipline is what has allowed for these companies to thrive. Strategy Canvas Generally the strategy that a company wants to compete on will vary depending on the type of business. In the rock climbing gym industry, businesses can compete on things such as Pricing, Location, Facility & equipment quality, staffing, and route quality. A high quality climbing gym needs to hit many of these factors in order to be successful in the industry. Pricing and membership are generally going to stay consistent in a region as to stay competitive rates need to be on par with all the other gyms. Customer service has been shown to be a powerful tool when coming to run a business. Many sectors of today’s outdoor adventure industry are now catered to more luxurious outdoor experience. A shift in the industry has seen clientele wish to be pampered while experiencing great outdoors. If you are not running a very high caliber gym then you very well better be bringing something new to the table. Offering something fresh to the market gives the opportunities for companies to find their blue ocean. A blue ocean is an untapped sector in an industry that if properly exploited can lead to new found success. However with that possible reward comes the risk, pioneering uncharted waters can lead to rough seas. 16 Strategy Canvas, Indoor Climbing Gyms 12 10 8 6 4 2 0 Altitude True North The Grotto Crux Cliffhanger Growth Stage Climbing gyms are actually steady businesses once they have been established in a community. Obviously a gyms success can vary but climbing gyms in Canada are contained in more densely populated areas in Canada. This allows for more exposure to the business and it the steady trend within the last 10 years has been if you build it, they will come. There will always be slight differences in quality when comes to how a business is conducted. However, the climbing gyms in Ottawa that I we have attended being Vertical Reality, Altitude, and Coyote. These companies have all had steady business and have regular attendance. A loyal group of members and of course the ever popular under 10 climbs a year member. Being able to cater to both these types of climbers is the key to success. Maintaining difficult quality routes while also keeping an inviting atmosphere with plentiful variation in route difficulty. Being versatile is also very important as getting climbers who want to lead 5.13+ routes and those who want to lazily boulder about. Having something for everyone is a great way to expand business. Offering Birthday parties and group rate attracts large groups which is always good for business. Altitude Climbing Gym in Gatineau offers a pint sized climbing/obstacle course which is slowly becoming the new bowling alley parties. All these factors contribute in business growth. Seasonal issues Seasonal issues don’t really arrive at an indoor climbing gym. Obviously there are your basic housekeeping items such as snow maintenance in Canadian environments and higher heating bills. These things are easily manageable with a little attention to detail and common sense. Their also may be a dip or rise in detention depending on the climate. A region with a long winter and slow summer may receive more business as the season to climb outdoors is a lot shorter. Being able to operate year round is great as it makes managing staff and facilities much easier as there is constant supervision. Having year round business is obviously good as it leaves a larger time span to generate income. 17 Capital Investment There are always going to be some financial difficulties when opening a business. Start up and business costs such as Real Estate, Staffing, equipment, hydro, water, advertisement and other factors need to be accounted for when starting up a climbing gym. A gym can have the highest quality facility and be aesthetically pleasing but if it doesn’t consistently hit on the yellow tail charts then it will not be competitive with other companies in the same industry. Having multiple owners is a way to cut the cost or have shareholders if you run a substantial enough gym. Getting investments is always a tricky endeavor but if you can find someone to back a wellexecuted business plan then an investor is certainly not out of reach. Even though it seems like a huge amount of cost, the business is a relatively simple and inexpensive industry to work in. Minimal staff are needed to run a high functioning organization where nothing is imported or exported regularly. Having the ability to operate year round is also a benefit that many other adventure activities do not get to enjoy. Marketing Product Offering: The average rock climbing gym has three main target markets: avid high performance climbers, drop-in climbers, and recreation for children. Most gyms have separate specifically tailored packages to appeal to each of these groups. Services offered by the majority of rock climbing gyms in Canada include: day passes, month, 3 month and yearlong memberships, birthday party packages, kids camp, competitions, climbing lessons for a range of ability levels and rental equipment. The more advanced climbers would purchase 12 month memberships and participate in competitions. The casual climber would buy day passes or short term memberships and take classes. Finally, parents would bring their children for birthday parties and summer camp. Pricing: Climbing gyms across Canada offer very similar activities for very similar prices. For each package there is a baseline price with individual gyms being a few dollars above or below that price. Day passes will be $15 +/- about 2 or 3 dollars. Annual memberships are $500 +/- about 100 dollars. Birthday parties are typically $35 +/- about 10 dollars. Rentals are typically $5 +/- about 1 or 2 dollars. Lessons are $35 +/- about 10 dollars. The climbing gyms that are more expensive are located in the larger city centers (Toronto and Vancouver). Operating costs such as rent are higher in these areas which is directly related to why they are more expensive. In addition, the demand may be higher due to a higher population which would explain why theses gyms are able to set higher prices. Product Distribution: The product offered by rock climbing gyms is access to their facility for whatever amount of time the climber is interested. The service provided is expertise in how to climb which can be offered in many forms depending on the age and ability of the climber. Therefore all customers must come to the location in order for the exchange to be made. If the customer is only interested in the using the product (i.e. having access to the gym) they will simply come to front desk and purchase a membership, a day pass and/or rentals. If the customer is interested in the services the gym has to offer (i.e. lessons or kids 18 camp) they will book ahead of time and depending on company policy make a down payment prior to using the service. Promotional strategies: Most climbing gyms offer discounts in different forms. There is usually a student, children under a particular age and a senior discount. In addition there are packages that can be purchased to save money for example buying a package of 10 day passes rather than buying them separately will be cheaper. Many climbing gyms also have special events which are designed to promote the gym and inspire membership. It is common to see flyers for these events in places where the target market can be found such as outdoor store bulletins. Top 5 “Big Players”: Altitude Gym Gatineau, Quebec True North Toronto, Ontario Product Altitude offers: day camp, clip & climb, kids club, bouldering, top- roping, and lead climbing Known for: clip & climb kids obstacle course Price Day Pass: $13.95 Year Membership: $480.00 Shoe/ Harness Rental: $3.75 True North offers: various private or semi-private beginner to advanced classes (technique, scramble, lead etc.) youth and adult competitive teams, school groups, day camps, birthday parties, bouldering, top-roping and lead climbing. Day Pass: $16.81 Year Membership: $638.45 Shoe/Harness Rental: $5.00 Below average pricing Above average pricing The Grotto Guelph, Ontario Crux Calgary, Alberta Cliffhanger Vancouver, B.C. The Grotto offers: introductory and technique classes, summer camp, after school Kids Rock Club, climbing teams, birthday parties, bouldering, top-roping and lead climbing. Crux offers: multi-pitch, rappelling, various introductory to advanced courses, junior climbing team, birthdays, school groups, bouldering, toproping and lead. Known for: one of the highest indoor gyms in North America Day Pass: $15.24 Year Membership: $476.00 Shoe/ Harness Rental: $3.81 Cliffhanger offers: an very extensive variety of courses including an outdoor course, Kidrock after school programs, birthday parties, bouldering, toproping and lead. Average Pricing Slightly below average pricing Above average pricing Day Pass: $14.25 Year Membership: $520.00 Shoe/ Harness Rental: $5.00 Day Pass: $18.00 Year Membership: $588.00 Shoe/ Harness Rental: 5.50 19 Promotion Annual Membership $540.00 per 1st person, $300.00 for second 12 Month Membership for a Student. $480.00 Standard Birthday Party. 2 hours of climbing, use of party room for 45 minutes, $35.00 per child, minimum 4 children, $125 deposit required Introductory Lesson. $35.00 per person. “Show me the Ropes.” $95.00 for 2 or $55.00 for an individual, 2 hour climbing lesson with an instructor “Taking the Lead.” $115.00 Lead Climbing Lessons “Everest Birthday Package” $35.00 per child, pizza and pop included Bouldering League. $30.00 per person Family Annual Pass. $998.00, for a family of 4 Kids Belay Session. $22.00 per person, minimum 3 participants, maximum 50 Demographic Profile Demographic Profile of the Indoor Climber Indoor rock climbing is becoming much more prevalent in urban centres. In fact, there were approximately 6.7 million participants, its second highest level of participation in the United States this year. However, there is a specific demographic that enjoys climbing indoors. According to statistics, the average indoor climber is primarily male and unmarried (male climbers outnumber female climbers 2 to 1.) Over half of indoor rock climbers (59%,) are between the ages of 16-24, and 21% are aged from 25-34. (Outdoorfoundation.org, 2005) Clearly, the main demographic of the indoor climber is young and male. This is backed up by the fact that in 2000, 35% of indoor rock climbers were female, falling to 27% in 2005. (Outdoorfoundation.org, 2005) While this may not be a huge loss, it does show that the target demographic is generally male. In the United States, the primary area where there are indoor climbers is in the western region of the country. Perhaps this is because the west of the U.S. is home to the Rocky Mountains, where there are many outdoor climbing spots that attract outdoor rock climbers from around the world. Indoor rock climbing could be more prevalent here because of people training/seasonally preparing for the outdoor climbing attractions. Also, it seems that those with a middle level income, ranging from $40k to $79k have the highest level of participation, at 46% in 2005. (Outdoorfoundation.org, 2005.) Speculation is that indoor rock climbing is a sort of “in between” sport. Like many recreational activity, there are costs associated with gear costs and membership fees. However, compared to other sports such as skiing or white water kayaking, the costs are relatively low. Therefore, it seems that indoor rock climbing is perfect for the middle class. In summary, the demographic profile of the indoor climber is young, male, in their early 20s, lives in the western end of North America and has a mid-level income rate. Participation rates Participation of climbers has been relatively stable in a report conducted by The Outdoor Industry Association. From the years of 2002-2006 climbing has ranged anywhere from 7.5-9.9 million. 20 In 2002 there was an unusual spike in average visits; outings jumped from 16-21 mean outings and then back down to an average of 10 outings a year for climbers. This is interesting because the amount of climbers has actually stayed rather steady. This means that there has been an increase in beginner or occasional climbers. Potential rock climbers tend to be active. In a lot of cases those participants are involved in other physical activities. We will call these mixes of activities crossover sports. The main crossover sports for indoor rock climbers are cycling at 70%, hiking at 66%, and trail running at 62%. There is a relatively good chance that potential climbers are already involved in some other outdoor activity. This is a positive sign for climbing gyms because there is a better chance of retention in first time climbers because they are active and more likely to excel in climbing. Target Market for Commercial Operators The main demographic for indoor rock climbing are Caucasian men around 26. (Outdoor Foundation.org, 2006) Generally they are novices who visit the gym under ten times a year. Ideally all companies would love to target the baby boomers as it is a very lucrative market; they have free time and disposable income. The main problem with that is there are physical limitations placed on rock climbers. Rock climbing involves dynamic movement and good core and arm strength, things that not all boomers possess. This means that the next best target would be financially secure males and females in their mid-30’s. Climbing gyms want potential clients to know that their gym is a great alternative to traditional gyms as well as having a great atmosphere. Climbing communities are very tight knit and are a great way to blow off steam from the monotonous day at the office. Gyms have always been a place to find potential matches and there are lots of hotties toning their sculpted bodies in climbing gyms. Personality Profile of a Typical Client Clients at an indoor climbing gym come from either end of the ability spectrum. The two main client groups are beginner one-time-climbers: birthday parties, school field trips etc. The other client group focusses on intermediate climbers who need an urban area to practice. Gyms cater to two very different ability levels and interests. Climbing gyms have a drop in based clientele. Gyms are located in city centers where people can have easy access to them throughout their busy schedules. They are meant to be an outlet where climbers can practice their skills and work on technique in between on outings to natural rock. Of course there are the occasional group of clients in who plan trips to climbing gyms as a special experience. It is necessary for gyms to have easier routes to be inclusive of all possible clients. Clients who frequent indoor rock gyms are typically from urban centers. They tend to be Caucasian, unmarried males with a mid-level income. (Outdoor Foundation.org, 2006) Although there are fewer female than male climbers, more females partake in indoor rock climbing as opposed to natural rock climbing. Climbers are, by their very nature, extremely active people. The majority of climbers also enjoy cycling, hiking, camping and fishing. 21 Staffing Profile Demographics/Range of Staff The demographics of rock climbers in general are particularly male, and between the ages of 21-25. As previously stated, one of the primary focuses of rock climbing gyms is for those who climb outdoor s to have a safe and challenging training centre. Presumably because the lure of climbing is too much to pass up for climbing enthusiasts, the primary demographic for indoor rock climbing gym instructors is much the same, made up of men Training Level, Source of Training The training level for an instructor at an indoor climbing gym can vary depending on the position. For example, a posting at True North Climbing is look for a part-time instructor, known as belay staff. Belay staff would be responsible for the safety and instruction of children during school groups, birthday parties, day camp and special events. (True North, 2014). No certifications seem to be needed in order to apply. Months of climbing experience are emphasised, but in terms of hard certifications, none seem to be required. Even as positions become more senior, such as a job application for a head coach of the climbing team for “The Spot” climbing gym in Boulder, Colorado, there does not seem to be a lot of emphasis on hard certifications, but rather on experience. (Climbing Wall Industry, 2014.) Some certifications such as CPRC, WFR and standard first aid are highly recommended, but no actual qualifications from certifying bodies such as Challenges Unlimited or ACMG. It would seem that personal climbing experience and the willing to work with and teach people are the most sought after abilities. Pay As is common in the rock climbing world, pay for certain positions doesn’t seem to be based on a perhour or per-instruction basis up front. Depending on the experience you have coming in to a potential job, this could help shape the compensation you receive. The standard for an entrance level instructor is just over the minimum wage level (dependant on location.) However, for those coming into the industry with any small bit of experience, it seems that their rate would be based which role is best for them to fill in the gym, which could vary greatly. Life Span in Industry The average life span of a rock climbing gym instructor can vary. A person who has devoted their life to rock climbing is likely in very good physical condition. This will allow a longer life span in a very physically demanding work environment. Don’t let this fool you however as at some point doing physical instruction at a competitive level will become out of reach. The average age of an instructor would mimics the age and gender range as the most popular climbing demographics. That demographic being males aged 21-25. This is a lot of the time not a career that spans a lifetime; turnover rates fluctuate because many gyms have seasonal staff. 22 Personality Profile The personality profile of an indoor rock climbing employee seems to be the most important aspect of hiring new staff. In almost every application, some of the prized attributes are: passionate, approachable, hard-working, friendly, excellent communication. (Climbing Wall Industry, 2014.) Environmental Considerations Land Management Indoor rock climbing gyms are generally built in urban centers. The zoning policies of the municipalities would dictate where a gym would be able to operate. A rock climbing gym would be deemed as “commercial” and therefore would only be able to operate in the areas that the city zoned for these purposes. The municipality is responsible for where a building can be built but the province is responsible for the building itself. According to Ontario’s Building Code Act of 1992 the province is has jurisdiction over buildings, however, in many cases the responsibilities are delegated to other local enforcement agencies. These agencies include health and sewage inspectors. (E-laws, 2014) The permit process for this commercial activity can be quite extensive depending on how the operator wants to start the business. If the gym was to be built from scratch the operator would need to purchase the land, make sure it was commercially zoned, obtain a building permit and comply by all regulations. These regulations may vary from city to city, for example in Ottawa there are regulations surrounding how tall a building can be in relation to the Parliament Buildings. Climbing gyms however, are commonly built in abandoned old buildings that can easily be converted. If this were the case the operator would need to make sure the building was structurally sound and there were no zoning issues. Climbing operators do not legally need to have a climbing specific permit from any certification body, for example the TSSA does not need to inspect the rock wall. However, there are private climbing inspection companies such as Challenges Unlimited or insurance companies that can do inspections on operation standards. Environmental Issues Although climbing gyms are by nature an indoor activity, they are still an integral part of the outdoor adventure industry. This is because many people use them as a training tool in order to go climbing outdoors on natural rock faces. While none of the following environmental issues directly affect indoor climbing gyms, it is important for climbing gym operators to educate their clientele on the importance of climbing sustainably. In fact, an emphasis on how the negative effects of outdoor climbing affect the environment can be a positive for indoor gyms, as those sensitive to these issues will gravitate more towards the environmentally friendly option. Outdoor rock climbers must hammer bots onto natural rock faces in order to set safety belays systems properly. However, this disturbs the natural environment of the cliffs and cwms. Lichens and fungi growing on the rock can be disturbed, as well as any insects living on the rack face. They can be disturbed not only be the bolt placement, but also by climbers constantly using the same natural features to progress in their climb. (Koonar, 2014.) As well, plants and animals living near the bases and summits of popular climbs will constantly be affected by climbers, by either being trampled on, repeatedly used as anchors, or by the mere presence of humans disturbing their natural way of life. (Koonar, 2014) 23 Issues such as these make indoor climbing a haven of both climbing and useful information for avid climbers in areas where the natural environment may need some time to rebuild itself. By educating climbers on the proper ways to climb sustainably, it makes the climbing community look better on the whole to environmental activists, and also by giving them an environmental conscious alternative. Rock climbers have been closely allied with environmental agencies to come up with the best practices to reduce impact on the environment, as well as still being safe. Leave No Trace principles specific to climbing are readily available, and use the expertise of both climbers and LNT advocates. However, with indoor climbing gyms becoming more mainstream, climbing has become less of a niche sport, and more readily available to urban centers. What this does is reduce the impact of climbers in areas where their impact would be felt more strongly, and shifted the majority of climbers to areas which can withstand their impact. In conclusion, indoor rock climbing is a large step in the right direction in regards to responsible sustainable climbing. Land Use Conflicts There is a unique aspect to indoor rock climbing gyms as it takes a different form physically. Unlike most other outdoor adventure sports, it is one that can be done in a facility. Also, these facilities are located mainly in urbanized areas. This means that the most environmental damage a gym could have would be from harming a habitat when clearing land to build the property. An area may also be protected if there is a threatened species of plant or animal. Another unique problem geographically would be competition within a specific area. A big city such as Toronto has 5 separately owned climbing establishments that fight for clientele within city limits. These gyms have to battle with pricing, customer service, route/facility quality, and location of other gyms in the area. Environmental Impact Climbing gyms have the luxury of containing the impact of running their business within 4 walls. There is a potentially large impact generated from the running of a large scale climbing facility. Lighting, heating, plumbing, waste management and location are all things that climbing gyms are responsible for producing. There are however ways of managing the effects of these impacts. Low flush toilets will cut costs of the water bill. Fluorescent bulbs as well as solar panels will cut electricity costs. Properly insulating and weather stripping a facility will do wonders for saving money on heating especially in the harsh winter climate of Canada. There are special situations when potential land may not be suitable for building, as a certain protected species may have inhabited it. Another major factor would be having a properly implemented recycling and compost in order to more efficiently deal with their waste. Significant Contributions The most significant impact that indoor climbing has on the environment would be the ecological footprint that individual companies have in order to run their business. A company can choose to do many things in order to minimize its effect on the environment. From not skimping out on insulation to using a self-adjusting thermostat, those kinds of little steps are what make up a big difference to our environment. 24 Another aspect that the climbing community is good for would be spreading climbing knowledge. Practical ways to work with climbing surfaces can be transferred to outdoor climbing which leaves a long term effect on outdoor climbing cites as well as the environment as a whole. Knowing which species of trees to set up anchors on can leave a positive impact for other species as well as bring safe practice to climbers. SWOT analysis Strengths Rock climbing gyms have the immense advantage of being able to operate year round. Many other adventure sports are done outdoors and can be hindered by the climate they are participated within. Some companies can find issue with having seasonal lulls; climbing gyms in Canada see a boost in business in the winter because avid outdoor climbers join regular indoor climbers. When the outdoor season reopens then they see a drop in overall participation. If a gym can keep staff year round, they don’t have the stress of hiring and training new staff and those year round employees have the chance to develop a bond with regular and new climbers alike. Another advantage that gyms have is that they are able to constantly supervise their clients and the equipment they use. Proper training and supervision allows for a safe learning period where a new climber can learn the ropes. Weakness Rock climbing is still a relatively small sport when you compare it to things like skiing or biking and it shows when it comes to marketing. It is rare to see rock climbing advertisements in any form of media. This makes it hard to break into the mainstream. The only places viable to open up a gym are big cities, this limits the amount of participation in Canada as for a developed nation we still have a lot of rural regions that would require extensive travel to climb at them. This alienates sections of the population, as the population density of Canada is very low. This makes it near impossible for climbing gyms to open and make money in any smaller city. Opportunities For the most part, climbing gyms operate in large urban centers. The larger the population of a city the larger the market and therefore the more climbing gyms that can operate. This also means there is a limit to how many gyms can be successful in a city before the market dries up. There is only one climbing gym in Ontario in a city with less than 100 000 people. However, those cities that have more than 100 000 people but no climbing gym are a viable opportunity for a new gym to open. In Canada there are 13 cities with no gym and more than 100 000 people including: Thunder Bay, Longueil, Oshawa, Whitby and Burnaby. Larger cities such as Toronto, Montreal and Calgary all have at least four gyms which would be heavy competition and not very opportune. However, the large cities of Ottawa, Vancouver and Winnipeg have one or two gyms and could potentially be a good market for a new one. 25 Threats Rock climbing gyms are limited to the number of people who are interested in the sport. People who are interested in indoor gyms are also interested in other adventure activities such as mountain biking and outdoor climbing. Outdoor climbing and ice climbing are becoming more popular and more accessible. 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