Humberts Leisure Herne Bay Pier report January 2010

8/7/2019 Humberts Leisure Herne Bay Pier report January 2010

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DEVELOPMENT OPTIONS APPRAISAL

FOR

HERNE BAY PIER

ON BEHALF OF

CANTERBURY CITY COUNCIL

FINAL REPORT

JANUARY 2010

HLL Development Options Appraisal Herne Bay Pier 1


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CONTENTS 1 INTRODUCTION ..................... ...................... ....................... ...................... ...................... .................. ........ 3

1.1 BACKGROUND......................................................................................................................................... 31.2 HUMBERTSLEISURELTD ......................................................................................................................... 31.3 METHODOLOGY....................................................................................................................................... 31.4 RECOGNITION OFRISK............................................................................................................................. 4

2 SITE & SURROUNDINGS ...................... ..................... ...................... ..................... ...................... ............. 52.1 INTRODUCTION........................................................................................................................................ 52.2 THESITE ................................................................................................................................................ 52.3 SURROUNDINGS ...................................................................................................................................... 72.4 REVIEW OFPREVIOUSSTUDIES................................................................................................................ 72.5 SITESUMMARY ....................................................................................................................................... 8

3 DEMOGRAPHIC & VISITOR APPRAISAL ............................................................................................... 93.1 INTRODUCTION........................................................................................................................................ 93.2 LOCATION& ACCESSIBILITY ..................................................................................................................... 93.3 LOCALPOPULATIONPROFILE................................................................................................................. 103.4 ECONOMICENVIRONMENT ..................................................................................................................... 123.5 TOURISM............................................................................................................................................... 133.6 REGENERATION& KEYLOCALDEVELOPMENTS....................................................................................... 143.7 STAKEHOLDERCONSULTATIONS............................................................................................................. 153.8 SUMMARY OFLOCALDEMANDPOTENTIAL............................................................................................... 16

4 MARKET ANALYSIS .................. ..................... ..................... ..................... ..................... ....................... .. 174.1 INTRODUCTION...................................................................................................................................... 174.2 FOOD& BEVERAGE............................................................................................................................... 174.3 CONFERENCING, MEETINGS& EVENTS................................................................................................... 194.4 VISITORATTRACTIONS........................................................................................................................... 204.5 INDOORCHILDRENSPLAY..................................................................................................................... 244.6 O

THERU

RBANL

EISURE......................................................................................................................... 25

4.7 RETAILOPPORTUNITIES......................................................................................................................... 274.8 ARTISTSQUARTER............................................................................................................................... 284.9 MARINA................................................................................................................................................. 284.10 WATERSPORTS................................................................................................................................ 294.11 CABLECAR...................................................................................................................................... 304.12 ENABLINGDEVELOPMENT................................................................................................................. 324.13 COMMERCIALINVESTMENTPOTENTIAL -CONCLUSION........................................................................ 334.14 SUMMARY........................................................................................................................................ 34

5 DEVELOPMENT OPTIONS APPRAISAL ................... ...................... ..................... ...................... ........... 365.1 INTRODUCTION...................................................................................................................................... 365.2 PIERPAVILIONOPTIONS ........................................................................................................................ 365.3 DEVELOPMENTPHASEONE(EVENTSSPACE) ......................................................................................... 37

5.4 DEVELOPMENTPHASETWO(TRADITIONAL PIER) .................................................................................... 385.5 LONGER-TERMDEVELOPMENTOPTIONS................................................................................................. 395.6 ENABLINGDEVELOPMENT& FUNDINGPOTENTIAL ................................................................................... 435.7 SUMMARY OFPOTENTIAL DEVELOPMENTOPPORTUNITIES ....................................................................... 445.8 UNACCEPTABLEALTERNATIVE OPTIONS ................................................................................................. 45

6 KEY RECOMMENDATIONS............. ..................... ..................... ..................... ..................... ................... 476.1 SHORT-TERMRECOMMENDATIONS......................................................................................................... 476.2 MEDIUM TOLONG-TERMRECOMMENDATIONS......................................................................................... 47



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1 INTRODUCTION

1.1 Background

A wooden pier was first opened in Herne Bay in the 1830s, although this wassubsequently demolished in 1870. A replacement iron pier was subsequently

constructed in 1896 and was, in the late 1970s, the second longest Pier in the UK.

Since this time, however, Herne Bay Pier has suffered due to a number of factorsincluding storm damage to the extent that the Pier Head is now isolated from the restof the structure. A sports centre was constructed and opened at the shore end ofthe Pier in 1976, but the activities catered for are due to be relocated to a newlocation by 2011.

There is therefore a question mark over the future of the Pier. Canterbury CityCouncil has identified the Pier as a regeneration priority and views the Pier asintegral to any future regeneration plans for the town. In addition, the Council hashelped to establish the Herne Bay Pier Trust to preserve, restore and enhance the

existing structure.

Due to the impending closure of the Pier Sports Centre in 2011, HLL HumbertsLeisure has been commissioned to undertake an initial options appraisal for the site,with a view to ensuring a sustainable and viable long-term leisure-led developmenton Herne Bay Pier.

1.2 Humberts Leisure Ltd

HLL Humberts Leisure is a firm of specialist advisors in tourism and leisure businessand property. The company operates out of five offices nationwide, with over fiftystaff dealing with all aspects of leisure and community property.

Our Consulting team provides strategic property advice to clients in the leisureindustry ranging from local authorities, major institutions, private land owners andproperty investors to business occupiers of commercial and leisure property.

Over the years we have built up considerable contacts and clients within the publicand private sector and we have a clear understanding of trends and development viaour comprehensive research databases which monitor property transactions, activityand trends in the leisure sector. Our current work experience ranges from SE Asia,through Europe and the UK to the West Indies.

1.3 Methodology

In order to complete this study we have undertaken the following:

Site visit to Herne Bay and Herne Bay Pier, as well as meetings with keyCouncil officers and the Pier Trust;

An evaluation of demand through consideration of the number of visitors tothe area an analysis of the local population and a review of other businessand regeneration activity;

A review of current market trends in the relevant business sectors; A quantitative and qualitative assessment of competing and complementary

facilities in the local area; and

Initial canvassing of interest in specific opportunities from potential developersand operators of relevance.



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1.4 Recognition of Risk

Our estimates and conclusions have been prepared on the basis of information fromyou upon which we have relied, our own knowledge of demand generators andtrends, our in-house database of information, and the status of the competitivemarket at the time of our research in August, September and October 2009. We

have made no provision for any unforeseen events which could impact the leisure ortourism markets in the UK.

This report is provided for the stated purpose agreed in our correspondence and isfor use only of the parties to whom it is addressed, or their appointees. It is notsuitable for any other use or any other persons and should not be treated asvaluation for loan security or any other valuation purposes. As per our standardpractice, neither the whole nor any part of this report, or any reference thereto maybe included in any document, circular or statement without our prior approval of theform and context in which it will appear. As is customary with market studies, ourfindings should be regarded as valid for a limited period of time of six months and

should be subject to examination at regular intervals.



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2 SITE & SURROUNDINGS

2.1 Introduction

In this section, we consider the background to the site in greater detail. This is witha view to identifying potential development opportunities that may exist to further

unlock the regeneration potential of Herne Bay and its Pier.

2.2 The Site

Herne Bay Pier is sited at the western edge of the towns central seafront area, closeto the refurbished Bandstand and the small existing harbour area.

Figure 2.1: Map Showing Site Location wit hin Herne Bay Context

Source: Promap

The Pier itself is home to the ageing Pier Sports Centre, a functional but visuallyunappealing building occupying the bulk of the remainder of the Pier.

Figure 2.2: The Pier Sports Centre (viewed from seafront to the west)

The Pier Head, long since detached from the main body of the Pier due to significantstorm damage in the late 1970s, is still in evidence (though somewhat dilapidated),around mile away from the rest of the Pier.



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Figure 2.3: Close-up View of Pier Head

The current situation is somewhat different to how the Pier looked in the earlytwentieth century, as shown below.

Figure 2.4: Herne Bay Pier in its Former Glory

Source: Herne Bay Pier Trust

At the shore end of the Pier, there is some seating together with a former publicconvenience / ticket kiosk which has recently been refurbished by Canterbury CityCouncil.

Figures 2.5 & 2.6: Seating on Pier & Former Ticket Kiosk



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2.3 Surroundings

The Pier overlooks a small harbour area to the east, along with the townsBandstand which includes a pub and caf / ice cream parlour. There is a well-regarded seafront restaurant at the foot of the Pier. This is currently undergoingsome refurbishment and expansion work. The wider seafront regeneration policy is

reviewed in chapter 3.6.

Figures 2.7: View East from Pier, with Bandstand & Clock Tower (Harbour area to Left)

The Area Action Plan for Herne Bay (see chapter 3.6) comments that it has beenconsistently expressed by local residents and stakeholders for the provision of arestored, and if possible extended, pier of such uses as eating facilities,entertainment, leisure, shops and fishing and boat trip facilities.

Given the visibility of the site in the seafront context, it is therefore vital that anycommercial leisure or tourism uses fit well within the existing landscape and makes apositive contribution to the appearance of the resort.

2.4 Review of Previous Studies

Although there have been a number of studies into the future regeneration andrevitalisation of Herne Bay as a town, there have been fewer examining the Pierspecifically. We are aware of the Capita Symonds report (2006) into the relocationof the Pier Sports Centre, but we summarise the PMP report from 2004 below toprovide a greater context to this study.

2.4.1 A New Pier for Herne Bay - PMP

Appointed jointly by Canterbury City Council, Kent County Council and TourismSouth East, PMP undertook an initial feasibility study into rebuilding / restoringHerne Bay Pier. This included a degree of consideration of potential new leisure,tourism and enabling development. Some of the reports key findings aresummarised below:



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That there was, in 2004, a strong level of commercial interest in developing ona new pier, although concerns were raised over the viability of particular uses;

A casino could provide an attraction on a commercially redeveloped pier,complemented by other uses to ensure a family friendly environment and allday / year round interest;

Rebuilding the pier to its original distance would make commercial viabilityimpossible; and

Of the range of options considered, none were found to be self-funding andwould require a considerable amount of grant funding / public sector moniesto ensure the Piers future.

Clearly the economic climate at the time of the PMP report was more favourablethan it is at present and this may restrict the levels of operator / developer interestin any commercial leisure opportunity. Such interest will be examined in this report.

2.5 Site SummaryHerne Bay Pier is one of the key regeneration priorities for Canterbury City Council,and is therefore of considerable strategic importance. The displacement of existingsports and recreational activities from the Pier Pavilion offers an opportunity toenhance the towns visitor offer, as well as appealing to the resident local populace.

Previous studies have considered the potential for a range of commercial leisureopportunities, although the market climate today is very different to that in 2004.None of the range of options identified by PMP in a considerably strongereconomic climate were found to be self-funding, and this may raise issues fordevelopment today.

In this report we consider the market and commercial potential for a range ofprimarily leisure-based uses on the Pier, to enable the wider regeneration of HerneBay and, potentially, the future restoration of the full length of Herne Bay Pier.



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3 DEMOGRAPHIC & VISITOR APPRAISAL

3.1 Introduction

In this chapter, we begin our assessment of the likely demand for new leisure andtourism facilities that could be accommodated within a revamped Herne Bay Pier.

This will look at the general picture for Herne Bay and the wider East Kent area,focusing on accessibility, demographic structure, the local economic environment,the relative importance of the local visitor economy and the proposed regeneration ofthe town centre.

3.2 Location & Accessibility

Herne Bay is a seaside town with a population of nearly 40,000, situated betweenWhitstable and Margate on the northern coast of East Kent, overlooking the ThamesEstuary.

Figure 3.1: Map showing L ocation of Herne Bay Pier in Wider Context

Source: Collins Road Atlas

3.2.1 Road

The main access road to Herne Bay is the A299, leading from Junction 7 of the M2motorway.

Figure 3.2: Distance to Key Locations from Herne Bay Pier

DestinationApprox. Distance

(miles)Approx. Journey Time

by Private Car

Canterbury 9.1 0h20

Margate 13.5 0h20

Ashford 23.0 0h40

Dover 24.6 0h45

Rochester 38.1 0h50

Dartford 48.2 1h00

Central London 64.8 1h40

Source: The AA



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As the above table demonstrates, there is a large potential catchment of visitors withmajor towns such as Canterbury and the Medway towns within an hours drive andeastern parts of London within 90 minutes. In addition, cross-Channel ferry portssuch as Dover and Ramsgate are easily accessible.

This highlights the considerable potential of Herne Bay as a seaside visitordestination although the proximity to other resorts (eg. Margate, Whitstable,Sheppey) provide competing destinations within broadly the same visitor catchment.

3.2.2 Rail

The railway station in Herne Bay is located relatively centrally, around mile fromthe Pier. Direct rail services to London take just under ninety minutes furtherhighlighting the accessibility of Herne Bay and the large potential catchment ofvisitors.

A new, slightly faster, rail service between London and Herne Bay will operate fromDecember 2009. This will reduce the journey time from London, but is unlikely to

have a material impact on the number of visitors to Herne Bay in the years ahead.

3.2.3 Air

Londons major airports are all within around 90 minutes two hours drive of HerneBay Pier, with the closest (Gatwick) just under 70 miles away. Kent InternationalAirport (KIA) at Manston, near Ramsgate is also close by, and we understand thatthere are plans to expand the number of passenger services available at KIA overthe next couple of decades.

3.2.4 Sea

Herne Bay lies close to a number of major international gateway ferry ports includingDover and Ramsgate as well as the Channel Tunnel. This can be viewed as anopportunity for the town (through the ease of access from a large pool of overseasvisitors), but may equally result in the loss of domestic visitors from elsewhere inKent and Sussex (attracted by the ease of access to the continent).

Up until the early 1960s, Herne Bay Pier was used by paddle steamers, providing aregular passenger link to Southend Pier.

3.3 Local Population Profile

At the time of the last National Population Census in 2001, Canterbury District had apopulation of around 135,000. The districts population is estimated1 to have risen to

almost 150,000 by 2008. Herne Bay itself had a population of 35,188 in 2001, whichis estimated to have risen to 38,060 by 2008.

As shown below, there is a greater proportion of older residents locally. There areproportionally fewer young adults (aged 20-29) within Herne Bay compared toregional and national averages. This highlights that the needs and requirements ofolder local residents, as well as young children and family groups, must be taken intoaccount when considering potential uses for Herne Bay Pier and its synergy with thesurrounding community.

1 Kent County Council Mid-Year Population Estimates September / October 2009



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Figure 3.3: Local Population Structure Comparison

0

5

10

15

20

25

l

i

( )

i i

t Kent t UK

%o

fTota

ResdentPopulation

0-14 15-19 20-29 30-44 45-59 60-74 75+

Age Group Years

Populat on Structure Compar son

Herne Bay Canerbury South Eas

Source: 2001 National Population Census

The population of Herne Bay has risen by approximately 7% between 2001 and2007, and is forecast to rise steadily in the future.

3.3.1 Catchment Population Data

The PMP report (see chapter 2.4.1) included catchment data from CACI. Some ofthe key facts identified are shown below.

There is an affluent population in the Herne Bay area, with high numbers ofWealthy Achievers and Comfortably Off2 residents locally compared tonational averages. There are also considerably fewer Hard Pressedresidents.

The population of Herne Bay (and the surrounding area) is forecast to growover the next decade, with more than 200,000 people likely to be within a 30minute drive of Herne Bay by 2018.

Figure 3.4: CACI Population Projections 2003 - 2018

Year

2003

2008

2013

2018

% Change03-18

Source: CACI / PMP

10 mins

36,965

37,506

38,252

39,133

+ 5.9

Approximate Drivetime from Herne Bay

15 mins 20 mins

54,967 89,751

55,668 90,757

56,684 92,296

57,966 94,259

+ 5.5 + 5.0

30 mins

194,263

196,239

199,007

202,607

+ 4.3

2 Using ACORN demographic classification



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3.3.2 Surrounding Areas

Although there is a limited resident population within Herne Bay and the surroundingdistrict, Kent itself does have a considerable population base that generatesadditional visitors to the Pier and town. Mid-year population estimates for 2008indicate that, including Medway, Kent has a population of 1.66 million, representing

growth of almost 7% since 1998.

It is important to note, however, that whilst this may represent an opportunity, thereare a number of destinations within Kent as well as along the Sussex coast, andeven in South Essex that will be competing for the same visitors.

3.4 Economic Environment

3.4.1 Economic Structure

Current economic data highlights that Herne Bay has a relatively limited employmentbase of approximately 7,000 jobs, with the public sector an important local source of

employment. This indicates that Herne Bay has a considerable number of out-commuters, with only one in four working residents actually working in the town.3

Figure 3.5: Employee Jobs by Sector 2007

Industry

% of Total Employee Jobs

CanterburyDistrict

South East UK

Manufacturing 4.3 8.5 10.6

Construction 4.3 4.6 4.9

Services: 88.8 85.3 83.0

Distribution, hotels & restaurants 27.7 24.7 23.3

Transport & communications 3.7 6.0 5.9

Finance, IT, other business activities 11.4 23.8 21.6

Public admin, education & health 39.9 25.5 26.9

Other Services 5.9 5.4 5.2

Tourism-related 8.1 8.0 8.2

Source: NOMIS

Within the wider district there remains a strong service sector dominance, althoughthe proportion of tourism-related employment is broadly in line with the nationalaverage. There is a disproportionately high level of part-time jobs within Herne Bayas shown below.

Figure 3.6: Type of Employment

Area% of all Working Age Residents

Part-Time Full-Time

Herne Bay 26.8 73.2

Kent 23.5 76.5

South East Region 22.0 78.0

England 22.4 77.6

Source: Annual Business Inquiry / Kent County Council

3 Herne Bay: An Economic Assessment; Canterbury City Council, January 2009



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Herne Bay has a relatively high proportion of low-skilled residents, with almost one-third of residents having no qualifications considerably higher than county, regionaland national averages.

3.4.2 Unemployment

From a peak of 11% in 1993, unemployment in Herne Bay has fallen markedly. Thisis highlighted by little long-term unemployment in the town in contrast to manyother seaside resorts around the UK.

The unemployment rate in Canterbury district is marginally above the regionalaverage for the South East, but below the national average. In 2008, 4.6% ofeconomically active residents in the district were classed as unemployed4. Thiscompares to 5.7% in Great Britain and 4.4% regionally.

3.5 Tourism

3.5.1 The Impact of the Current Global Economic Downturn

The falling value of Sterling has resulted in a sharp rise in the cost of overseasholidays. National self-catering operators such as Hoseasons are recordingincreased demand for holiday rentals, with the price of overseas holidays forecast toincrease by around 10% in 2009 compared to 3% in the UK, due to the weakpound.5

Furthermore, a 2009 survey6 commissioned by Travelodge found that just 27% ofBritons planned to holiday abroad down from 33% in 2008 with 32% planning adomestic holiday. Of those staying at home, 40% will take a seaside holiday. Thisoffers opportunities to Britains coastal areas, such as Herne Bay, to increase (andsubsequently retain) visitor numbers in the future.

3.5.2 Regional Tourism Trends

The South East is one of the most popular domestic visitor regions in England with16.3 million visitors in 2008. These staying visitors accounted for almost 48 millionbednights (an average of 2.92 nights per trip) and total expenditure of more than2.3 billion (144.22 per trip).

4 Office for National Statistics5 The Independent 8 October 2008

6 The Caterer 5 June 2009



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Figure 3.7: Domestic Staying Tourism by Region Visited 2008

Govt Office Region Trips (millions) Nights (millions) Spend (millions)

South West 18.93 71.73 3,639

South East 16.29 47.52 2,350

North West 12.97 36.56 2,338London 11.32 27.43 2,356

Yorkshire & Humberside 9.54 26.53 1,397

East of England 9.22 29.12 1,362

West Midlands 7.76 20.74 1,149

East Midlands 7.28 22.29 1,060

North East 4.02 12.22 697

Total England 95.53 295.38 16,433

N.B. May not total due to people visiting more than one region per trip

Source: UKTS

Between 2007 and 2008, the number of domestic staying trips to the South Eastregion fell by almost 9%, although total visitor expenditure fell fractionally. Thishighlights that the region is increasingly attracting more affluent leisure and businesstravellers.

3.5.3 Local Tourism Trends

In 2006 (the latest available data), there were an estimated 6.4 million visitors toCanterbury District. More than 9% of these were staying visitors, and tourismgenerated 315.4 million in direct and indirect visitor expenditure, supporting morethan 7,300 FTE jobs.

We understand that there has been a gradual decline in visitor numbers to HerneBay in recent years, although have not been provided with any specific figures by theCouncil. However, discussions with the Councils Tourism Manager suggest that2009 has been a particularly good year for tourism in Herne Bay, with an increase invisitor numbers supporting national evidence highlighted in chapter 3.5.1.

The Councils own Economic Assessment7 notes that it is accepted that tourismhelped Herne Bay to remain prosperous throughout the 20 th century until the 1970sin terms of employment and wealth. But changing patterns of tourism has meantthat much of the towns local retail sector is likely to be more dependent upon localresident spend over an average year.

3.6 Regeneration & Key Local Developments

There are a number of regeneration schemes and developments that are taking /have taken place in East Kent in the recent past (eg. the Turner Contemporary inMargate). However, of most relevance to the Pier is the wider regeneration of HerneBay town centre. The recently published Area Action Plan (AAP) for Herne Bay8

highlights three prominent and centrally located development sites as shown below.These are the:

Central Development Area;

7 Herne Bay: An Economic Assessment; Canterbury City Council, January 2009 8 March 2009



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Bus Depot site; and

Beach Street site.

Figure 3.8: Regeneration Proposals Map

Source: Herne Bay Area Action Plan Proposed Submission March 2009

The town centre offers a number of different sites for development and enhancingthe visitor / community offer with the towns retail leakage a particular issue. It hasbeen estimated that Herne Bay only retains 31p in every pound generated9. TheCouncils recent Economic Assessment highlights the failure, so far, to bring forwardseafront development opportunities.

To this end, Policy HB11 of the AAP deals specifically with Herne Bay Pier:

During the period between the decision to relocate the sports facilities from the pierand the opening of replacement facilities the options for the future of the pier will befully explored jointly by the City Council and Pier Trust. A detailed implementationplan will be developed to progress the preferred proposals, including the preparationof a Supplementary Planning Document to be adopted by the Council to set outdetailed planning and design guidance for the delivery of a revived and thriving pierat Herne Bay.

There is therefore a need for a realisable and deliverable scheme at Herne Bay Pier.

This will assist in the wider regeneration of and more effectively linking - theseafront and town centre, increasing visitor / community interest in the pier, as wellas generating new investment from the private sector.

3.7 Stakeholder Consultations

Members of our team attended a meeting of the Herne Bay Pier Trust at the outsetof this study, in order to better understand local aspirations for the Pier site and theunique opportunity that it represents for the town. All views expressed have beentaken into consideration, particularly the wish to ensure that any initial developmentat the Pier does not prejudice the future expansion of the structure back to its

9 Property Week 12 June 2009



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original length. The views of the Pier Trust have assisted our team with itsconsideration of the range of potential uses, which we discuss in chapter 4.

In addition, we have spoken to a number of local businesses to better understandthe aspirations of local commerce for Herne Bay and its Pier. There was universalagreement that a key aspect of driving interest in Herne Bay is to restore the Pier toits original length. This would enable the Pier to once more welcome paddlesteamers to Herne Bay. A raft of other ideas that are perhaps more realisable inthe shorter term were also suggested. Some of these ideas, or variations on asimilar theme, are again discussed in greater detail in chapter 4.

We also understand that the City Council will be carrying out further consultation onthis report, as this aspect did not form a major component of the brief given to HLLHumberts Leisure.

3.8 Summary of Local Demand Potential

Herne Bay is a medium sized seaside town. It is, however, close to population

centres in Canterbury and the Medway towns, and is also less than two hours fromcentral London. The towns population is now estimated at around 38,000, withalmost 200,000 resident within an approximate thirty minute drive time. This localpopulation is relatively more affluent than the UK, and has a greater proportion ofboth younger children and older (65+) residents than nationally, with a particularprevalence of older residents within Herne Bay itself. This may help to explain thedisproportionately high level of part-time employment in the town, and also highlightsthe need to identify uses that may generate interest from older age groups, as wellas those with young children.

There are no specific visitor figures for the resort of Herne Bay itself. It is

understood that there has been a fall in visitor numbers to the resort, in keeping withmany traditional coastal destinations, due to the rise of the cheap foreign packageholiday particularly during the 1980s and 1990s.

The economic downturn has apparently benefited domestic tourism destinations,with increases in bookings and visitor numbers being reported. This may help toreverse the gradual decline witnessed in Herne Bay over recent years. Togetherwith the wider regeneration of the town centre, this may create new markets andopportunities for a redeveloped Herne Bay Pier. It must be borne in mind, however,that the Pier re-development and wider regeneration is inter-linked, with theregeneration of the town centre hinging, to a certain extent, on the redevelopment ofthe Pier and vice versa.

In the following chapters, we consider a range of leisure and tourism uses that couldbe considered for Herne Bay Pier, together with the likely levels of demand for suchfacilities (and commercial operator / developer interest) in this location.



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4 MARKET ANALYSIS

4.1 Introduction

In this chapter, we consider a range of leisure and tourism-based uses that may offersome potential for commercial investment and help secure the future of Herne Bay

Pier. This analysis will briefly examine recent national trends in the market sectorsof relevance, as well as the likely level of commercial interest in any suchdevelopment opportunity at this particular site.

4.2 Food & Beverage

4.2.1 Restaurants

The largest share of the eating out market in the UK is from pubs and hotels. Inrecent years, the market share of pubs has risen substantially due to both the rise inbranded family pub-restaurants (e.g. Harvester & Brewers Fayre) and the trend fortraditional pubs to be remade as gastropubs focusing primarily on the food elementof the pub product particularly in light of the smoking ban.

Figure 4.1: Market Share by Restaurant Type 2003 - 2007

RestaurantType

Share of Restaurant Meals Market in mill ions % Change2003 072007 2006 2005 2004 2003

Pubs & Hotels 4,350 4,175 3,875 3,625 3,325 + 30.8

Fast Food 2,900 2,950 3,000 3,000 3,000 - 3.3

TraditionalAsian

1,725 1,750 1,775 1,750 1,700 + 1.5

Italian / Pizza 1,725 1,700 1,550 1,475 1,400 + 23.2

Other

Restaurants 2,400 2,300 2,400 2,175 1,930 + 24.4

Total 13,100 12,875 12,600 12,025 11,355 + 15.4

Source: Key Note

Over the same period, there has also been a slight decline in the market share offast food restaurants. This has been due, in part, to national healthy eating drives,and may also indicate an increase in the quality of food on offer in the UKs eatingout market. It remains to be seen whether this trend will continue through therecession.

4.2.2 Cafs & Coffee ShopsRecent years have also seen phenomenal growth in branded coffee shops andcafs. It is now estimated10 that the top 12 operators in the UK in late 2008 offeralmost 2,800 units. The number of branded outlets operated by these majoroperators grew by around 15% a year in the mid-2000s, but increased by almostone-third during 2008. This perhaps suggests that the recession has created newhigh street opportunities for such operators to expand more rapidly, backed by(generally) strong business models. The recent travails of Coffee Republic,however, suggests that there may be more challenging times ahead for someoperators.

10 Key Note Coffee & Sandwich Shops July 2009



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4.2.3 Consumer Habits

Age is a major determinant of consumer eating out habits as lifestyle and leisurepreferences alter over time. Generally, affluent older people are more active in theeating out market, although they are usually more conservative in their eating habitsthan younger people. The growth in the casual dining sector such as pub-

restaurants has led to a shift towards the 25 54 age group.

Figure 4.2: Coffee Shop Usage by Age Group (March 2008)

Age Group

Frequency of Visi t to Coffee Shops (% of Adults aged 16+)

2-3 times/weekor more often

2-3 times/monthto once a week

Once a monthor less

Any Visit

15-19 4.6 18.7 20.3 47.2

20-24 5.6 22.7 20.7 51.4

25-34 5.3 23.0 27.6 59.3

35-44 6.3 18.1 29.5 57.1

45-54 3.5 21.1 30.0 58.4

55-64 4.0 19.9 32.8 59.465+ 5.1 19.7 26.5 55.6

Source: BMRB TGI / Key Note

The above table further highlights that young adults are generally the heaviestfrequenters of coffee shops, and can therefore be considered the primary market forsuch operators.

4.2.4 The Local Market

Our research has identified a limited number of pubs, restaurants and coffee shopsin Herne Bay. Wetherspoons aside, there is little branded operator presence, withthe nearest branded outlets being located in Canterbury.

A brief study undertaken in 2007 on behalf of the Council11 identified that HerneBays relatively poor food & drink offer is seen as one of the towns mainweaknesses.

The seafront is home to a considerable array of existing F&B outlets, ranging fromice cream parlours, fish & chip shops, cafs and more formal restaurants (such asLe Petit Poisson at the foot of the pier). From our consultations with localbusinesses, the potential for new meeting places for visitors and local residentswould be popular on the Pier, as long as such premises dont detract from the

existing F&B offer.

4.2.5 F&B Appraisal

A recent survey has found that Herne Bays existing food & beverage offer is seenas being relatively poor by residents, visitors and local businesses alike. Whilstthere are a number of good quality restaurants and cafs in the town, there remainsa need to improve the quality and range of the overall offer. The opportunityafforded by the potential redevelopment of the Pier could create new F&Bopportunities for primarily local operators to help address this apparent issue.

11 Supplementary Assessment of Tourism Product; Tourism Plus; April 2007



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4.3 Conferencing, Meetings & Events

It is estimated that around 1.6 million conferences are held in the UK each year, withresidential conferences accounting for around one-third of these. The number ofconferences held nationally has increased marginally over recent years.

Figure 4.3: UK Conference Venues by Distribut ion & Market Share

Type of Venue Distribu tion (%)Market Share

(%)

Hotels 53 63.9

Unusual Venues 19 11.4

Conference / Training Centres 10 11.2

Multi-purpose Venues 11 5.8

University / Educational Venues 5 5.7

Purpose-built Centre 2 2.0

Total 100.0 100.0

Source: Key Note / BACD


In larger coastal resorts, we would expect the bulk of conference and meeting roomsupply to be dominated by the hotel sector. However, there is little in the way ofsuch visitor accommodation locally.

The Conference Blue & Green12 identifies just two venues in Herne Bay itself: KingsHall and Herne Bay Court. We understand, however, that the latter has now closeddown. This highlights that the Kings Hall is the only such venue for local meetings,conferences and events.

Figure 4.4: Kings Hall

Kings Hall is a single, multi-purpose function room, with a bar attached that isavailable for hire. Broadly speaking, the events held at Kings Hall tend to attractlocal audiences (mainly from Whitstable and Herne Bay) comprised of generallyolder / retired residents. We understand that the existing building requires aconsiderable amount of expenditure and maintenance, and the future of the facility iscurrently the subject of a management review.

12 Nationally-recognised venue finder guides for events, conferences and meetings.



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Should the closure of Kings Hall be considered, then this would offer an opportunityto relocate events and functions to a new facility forming part of the widerredevelopment of Herne Bay Pier.

4.3.2 Conference Appraisal

Herne Bay is a medium sized coastal town, with few major private sector employers.As such, there is limited demand for conference and meetings space. This isevidenced by the recent opening of the Premier Inn hotel at Blacksole Farm, whichhas no meeting room facilities. We therefore consider that, unless forming oneelement of a flexible multi-purpose conference, theatre, events and recreationalspace, there would be little demand for new conference and meetings facilities inHerne Bay.

It has been suggested to us that the Pier Pavilion may be an appropriate alternativeentertainment venue to the Kings Hall. This suggestion was made on the basis thatthe relocation would free up the Kings Hall site for other uses. A pier is certainly an

appropriate location for such an entertainment venue, indeed in the past many piershave included such facilities. However, the cost of refurbishing and converting theexisting Pier Pavilion building is likely to be substantial. We would expect that thecost would not be less than the 3.3 million estimate provided by the Council for thecontinued use of the Pier Pavilion as a sports centre. In the absence of very clearevidence to the effect that the disposal of Kings Hall would generate a sum close tothis figure, there would seem little serious merit in transferring the use, even if thiswere thought to be desirable.

4.4 Visitor Attractions

The visitor enterprise business is a very diverse sector which includes theme parks,

zoos and wildlife parks, aquariums, museums, piers, historic houses and gardens,caves, farms and amusement centres. It is a multi-billion pound industry in the UK.

It is forecast, however, that the current recession will have a negative impact onvisitor numbers and expenditure across all types of visitor attraction, due primarily toconsumers having less disposable income. Nevertheless, with higher numbers ofpeople likely to be taking a holiday at home (as highlighted in chapter 3.5), it ispossible that the attractions market may not be as badly affected as some forecastshave predicted.

Clearly some types of visitor attraction would be inappropriate at Herne Bay Pier (forexample, a steam railway or a wildlife park). We have therefore briefly considered

the potential for a museum / heritage visitor centre and Victorian-style rides to reflectthe Piers history. We have also considered the potential of attracting a major visitorattraction, such as an aquarium.

4.4.1 Museums

Visits to UK historical and cultural attractions grew by an estimated 10% between2003 and 2007 with the museums and galleries segment growing 14% over thesame period. It is further estimated that 52% of the adult population have visited anhistorical or cultural attraction at least once over the past twelve months.13

13 Mintel Historic & Cultural Visitor Attractions UK November 2008



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Visitors to such attractions are also most likely to be middle-aged and more elderlyadults, with the 35-44 age group having the greatest propensity to visit museumsand other, similar, heritage and cultural visitor attractions. This 35-44 age group isunder-represented locally (as identified in chapter 3.3), and this may therefore limitlikely levels of demand although the generally ageing local population may drive

some demand for a new museum facility on Herne Bay Pier.

4.4.2 Other Visitor Centres

Visitor and heritage centres form an important part of the UKs cultural landscape. Itis estimated14 that there are over 500 visitor centres in the UK, attracting more than30 million visitors each year.

Such facilities act as information and educational facilities, typically at areas oftourist activity or natural beauty spots. The majority of centres are operated by localauthorities, agencies and trusts. A visitor centre may include a reception area,provide tourist information, visitor management, refreshment and conveniences, but

its primary function is interpretation.

4.4.3 Victorian-Style Rides

The provision of a select number of traditional Victorian-style childrens rides mayoffer a visually appealing and less intrusive alternative to modern Piers (such asBrighton, for example). Such rides normally centre on a carousel, with other smallfairground-style entertainments that will particularly appeal to the family market, andwould fit well with the historic nature of the Pier as a part of a wider mix of attractionsand facilities.

Figure 4.5: A Typical Victorian Carousel

Source: Wikimedia

Any such opportunity could be put out to tender to attract operators likely to pay asmall seasonal rent for the space provided.

Such a concept does have some merit. This is highlighted by the current proposalsto restore the Dreamland theme park in nearby Margate. Opened in 1920, the parkis a well-recognised local landmark much like Herne Bay Pier and finally closedin 2006.

14 Visit Britain Tourism Insights July 2002



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Figure 4.6: Aerial View of Dreamland Theme Park Today

Source: www.flickr.com

The Dreamland Trust have developed proposals to establish a Heritage AmusementPark on around half of the current site, and have recently15 been awarded a grant of384,500 by the Heritage Lottery Fund, as well as awaiting the results of a 4 milliongrant funding bid from Sea Change. It is anticipated16 that the park will reopen to

visitors in 2012.

4.4.4 Aquariums

Wildlife-based attractions (such as zoos, safari parks and aquariums) are particularlypopular amongst family groups. They can be educational and informative as well asexciting for adults and children alike.

The market for aquariums in the UK appears to be relatively mature, with Merlin(owner of the Sealife Centres) and Aspro (Blue Reef Aquariums) the largest andmost active developer / operators. Although most such schemes in the UK entail asignificant amount of built development (probably in excess of the space available onthe Pier), there are examples further afield of indoor / outdoor coastal aquariums.These include the Monterey Bay Aquarium in California, which attracts around 1.8million visitors per year. Whilst this particular facility would be too large to beconsidered, there maybe scope for the concept of a pier-based aquarium with a mixof indoor and outdoor features.

15 August 2009

16 The Independent 15 August 2009



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Figure 4.7: Monterey Bay Aquarium

Source: Wikimedia

However, the cost of such schemes can be extremely high. For example, the SeaLife Centre at Loch Lomond in Scotland opened in 2006 at a cost of 3.5 million17.As a result, they require a large pool of local resident visitors and / or annual touristnumbers. Realistically speaking, we consider it unlikely that any developer wouldconsider Herne Bay to be a suitable location in this respect particularly when onetakes into account the greater cost and risk associated with developing on a pier asopposed to a site on dry land.


Herne Bay has just the one museum located in a relatively central location on

William Street and is open all year round. A new museum / heritage visitor centre,as part of a revamped Pier offer, could potentially offer an expanded range ofexhibits appealing to a wider range of visitors, and linking well with the historic andcultural heritage attractions on offer in nearby Canterbury.

There are no major aquariums in East Kent, the nearest is the Blue Reef at Hastingsin East Sussex, as well as Sealife Centres in both Brighton and London.

Construction work on the new Turner Contemporary Gallery began in November2008, with a view to opening in 2011. We consider that any spin-offs (in terms ofsmaller galleries) are likely to be heavily concentrated in Margate, particularly in theyears immediately following opening in 2011.

4.4.6 Visitor Attractions Appraisal

There would undoubtedly be scope in locating a small museum / heritage visitorattraction / visitor centre within part of a refurbished Herne Bay Pier. Such a facilitycould be used for interpretation and general tourist advice, augmented byrefreshment (ie. caf / restaurant) and retail facilities to generate additional revenuestreams. If the exhibits in the existing museum on William Street were relocated intoa new facility, the building could be sold for an alternative use. This would generatea capital receipt for the Council, which could be ring-fenced towards thedevelopment of a replacement venue at the pier.

17 Leisure Opportunities 17 July 2006



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Most new museums and visitor centres are constructed using public funds (eg.Heritage Lottery Funds) with few private developers / operators in the market for thistype of visitor attraction, due to the limited revenue potential of such operations.Such a facility could be run and managed by volunteers such as the Pier Trust tominimise ongoing costs and the level of annual subsidy required to sustain the

business.

There is likely to be some concessionary interest in operating small-scale Victorianrides on a revamped pier. Whilst not representing a major level of development,such an offer would be popular with key visitor groups (such as those with youngchildren), as well as local residents. The demolition of the existing Pier Pavilionwould provide a suitable space for such facilities and generate annual rental income.

Whilst a small number of aquariums continue to be developed by the private sector,we feel that the wider catchment for Herne Bay is probably too small to attract suchdevelopers to the town. There is, however, nothing to prevent entrepreneurs puttingforward aquarium proposals should they so wish.

4.5 Indoor Childrens Play

The indoor childrens play market consists of many types of play area ranging fromsimple ball pits to elaborate soft play and tube structures. There are three maincategories of indoor play area that can be identified:

Freestanding Play Centre: where the play area is the primary business andmain reason for visiting;

Pub Play Areas: these are the play areas provided in family pub chains thatoperate across the UK; and

Other Play Areas: those not covered above (excluding play areas in retaildestinations).18By the end of 2008, the UK market was estimated to be worth in the region of 135million (on admissions alone), a rise of more than 16% since 2003. Despite this, thenumber of admissions has remained largely static, and may indicate that admissionprices have risen in line with a more sophisticated play offering by operators.


Our research has identified just one indoor childrens play centre facility in HerneBay. The Hippodrome is located on Kings Road (just to the north of the town

centre).Snappys is a dinosaur-themed childrens indoor adventure play centre at Whitstable(adjacent to the Lazer Rush game). There is a large indoor and outdoor childrensplay centre at Birchington (just to the west of Margate). Jungle Jims includes anindoor play barn as well as a range of outdoor activities including go-karting. Slightlyfurther afield, Imagine opened in Kingsnorth, Ashford at the end of 2003 and offers25,000ft of indoor childrens play area.

18 Mintel Childrens Play Areas UK January 2006



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Figure 4.8: Some of the Facilit ies at Snappys, Whitstable

Source: Snappys Adventure Play

There is, therefore, a relatively limited supply of indoor childrens play facilities inHerne Bay and the surrounding area. The greater proportion of young children andadults aged 30 44 resident in Herne Bay, compared to the district (see chapter3.3), suggests that there may be some demand for additional such facilities from thelocal community.

4.5.2 Indoor Childrens Play Appraisal

Herne Bay is a popular destination for visitors with younger children and the limitedlocal supply of similar facilities, especially for tourist visitors and local residents withchildren aged under 14, may suggest that there could be an opportunity for thedevelopment of an indoor childrens play centre at Herne Bay Pier.

However, modern facilities tend to be quite large (i.e. Imagine at Kingsnorth), and we

consider that there is likely to be insufficient space to attract any major nationaloperator to Herne Bay Pier. This is more likely, therefore, to offer an opportunity fora local entrepreneur, possibly in tandem with other revenue-generating facilities suchas themed rides or a family caf / restaurant.

4.6 Other Urban Leisure

Urban leisure covers a wider variety of facilities. For the purpose of this study, wehave focused on the potential for a new cinema or a tenpin bowling alley to beaccommodated as part of a revamped Pier.

4.6.1 Cinemas

The advent of the multiplex in the mid-1980s has led to a huge growth in cinemaadmissions over the past couple of decades. There has been a slight fall inadmissions since 2002, although the last two years (2007 and 2008) have shownsigns of recovery due in part to a significant increase in available screens.



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Figure 4.9: UK Cinema Market 2004 - 2008

YearCinema Admissions

(millions)Number of

Cinema ScreensAv. Admissions

per Screen

2008 164.2 3,661 44,851

2007 162.4 3,514 46,215

2006 156.6 3,440 45,523

2005 164.7 3,357 49,062

2004 171.3 3,342 51,257

% Change 04 - 08 - 4.1 + 9.5 - 12.5

Source: UK Film Council

However, the rise of the multiplex has led to the closure of a number of smaller,independent cinemas (eg. Dreamland Cinema in Margate, which closed in late2007). Many new cinema developments form part of wider urban leisure parks,including a range of F&B outlets, bingo, bowling and other leisure facilities intendedto create urban destinations for nearby communities to spend their leisure time anddisposable income.

4.6.2 Bowling

The market for tenpin bowling showed steady growth during the late 1990s and early2000s, although growth has slowed slightly recently. As for cinemas, many newercentres form part of wider leisure park developments, benefiting from the high levelsof footfall that such parks offer.

As an activity, bowling is most popular amongst teenagers and younger adults.Given the lower proportion of this age range resident locally, this may suggest that

Herne Bay will not fit the demographic requirements of such operators, and maytherefore not be a suitable location for such a development.


At present, there is just one cinema in Herne Bay. The two-screen KavanaghCinema on William Street is operated by Reeltime Cinemas (who also operate thecinema in Westgate-on-Sea). We understand, anecdotally, that the Kavanagh maybe struggling somewhat at the current time due to broader issues with its parentcompany. Reeltime also operated the Dreamland Cinema in Margate, prior to itsclosure in 2007.

The nearest multiplexes are located at Bluewater (Showcase), Westwood Cross(Vue) and Ashford (Cineworld). There are no multiplexes in Canterbury (althoughthere is a city centre Odeon). All of these multiplex facilities have at least ten cinemascreens and extensive car parking facilities on-site. This would not be achievable atHerne Bay Pier.

There are no established tenpin bowling facilities in Herne Bay. AMF (one of theUKs leading operators) operate bowling centres in Ashford, Maidstone and Margate,as well as a 10-lane facility in neighbouring Whitstable. The other leading bowlingoperators, Hollywood Bowl and Tenpin, have no facilities in Kent, although we areaware that the 8-lane Bugsys Ice & Bowl opened in the centre of Canterbury inSeptember 2009.



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4.6.4 Urban Leisure Appraisal

Herne Bay is already home to a cinema. Given the size of the resident population,we do not feel that there would be sufficient demand for additional cinema screens inthe town. The limited space available on the Pier (and surrounding area for carparking, etc) would further deter the likelihood of any developer / operator interest in

Herne Bay Pier as a viable new business opportunity.

The demographic profile for tenpin bowling does not appear to fit well with the localcatchment. Bowling centres generally form part of a wider leisure park development.There would be insufficient space on the Pier for such a scheme unless as astandalone entity.

4.7 Retail Opportunities

In recent years, the rise of the out-of-town retail destination has mirrored the declineof the traditional high street experience. Major leisure and retail parks (eg.Bluewater) have garnered a large share of total retail sales, and leisure-led mixed

use developments (eg. Xscape) have used specialist retail tenants to anchor theirschemes and ensure financial viability.


Over recent years, Herne Bays town centre has suffered a considerable degree ofretail leakage to new out-of-town retail destinations, as well as to Canterbury. It hasbeen identified that the towns independent retail sector is vulnerable to futurechanges in patterns of day tourism and local resident spend.19

The redevelopment of Herne Bay Pier may offer opportunities for some form of retailoffer to help redress such leakage and anchor a wider leisure offer on the Pier.

We do not consider, however, that major branded retailers would be interested (orbe appropriate) for such an opportunity. It may be possible to attract more locally-based (perhaps themed) retail relevant to the Pier / seaside location andcomplementary to other activities attracted to the Pier. This may include, forexample, independent souvenir / beach-related retail outlets in keeping with thecharacter and scale of Herne Bay as a seaside resort.

4.7.2 Retail Appraisal

Herne Bay does have a real problem with retail leakage with few national retailers / apreponderance of charity and discount shops.20 An enhanced town centre andrevamped Pier attracting more local residents and visitors to spend money in thetown may lead to good demand for seasonal retail premises (eg. souvenir or beach-related shops) to capitalise on the summer season.

By their very nature, however, such premises will only generate limited revenue, withthe majority operating under the VAT threshold.

Nevertheless, a rejuvenated Herne Bay, with higher footfall, may offer some small-scale retail opportunities on the Pier or, indeed, elsewhere on the seafront. It islikely that any such premises would need to be developed by the Council with localconcessions the most likely avenue for such an offer in this location.

19 Herne Bay: An Economic Assessment; Canterbury City Council, January 2009 20 Property Week 12 June 2009



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4.8 Artists Quarter

The market for arts & crafts studios and workshops is very fragmented by nature,with primarily small-scale independent operators. This is one of the sectors appealsin cultural areas, but does make it extremely difficult to accurately identify markettrends pertaining to the future development of the industry.

Nevertheless, recent examples in the UK have highlighted the economic and culturalbenefits that such developments can have. For example, the Tate Gallery at St Ivesin Cornwall has been a phenomenal success in regenerating the whole of St Ives asa year-round cultural destination, with many shops, galleries, pubs and restaurantsopening to benefit from increased and higher-spending visitors. There is a strongexpectation that the development of the Turner Contemporary Gallery will have thesame impact on Margate. In time, it is possible that there could be some smallerspin-off effect upon Herne Bay if the right facilities are made available and publicisedappropriately.

4.8.1 The Local MarketThere are no such facilities at present in Herne Bay. The concept has beensuccessfully implemented in the regeneration of Brighton seafront, quickly becomingan integral part of the visitor experience. We understand that rental levels for suchArches are, however, considerably below those for comparable commercialpremises (such as retail, bars, etc). Indeed, the Artist Quarter is effectively used asa loss-leader to provide colour, interest and to attract people down to the seafrontpromenade to create passing trade for other income generating uses.

With this in mind, together with the planned developments in Thanet, we consider itunlikely at this stage that such a concept would be suitable for Herne Bay. The

development of the Turner Contemporary and the establishment of a creativecommunity in the Old Town in Margate is likely to attract the vast majority of anyarts-related private investment for the foreseeable future, with only marginal spin-offinvestment benefits likely to impact upon Herne Bay.

4.8.2 Arts & Crafts Appraisal

Developing small-scale studios / workshops on the Pier could become a popularvisitor attraction (as witnessed in Brighton), providing a small spin-off to benefit fromthe planned opening of the Turner Contemporary in Margate and to other arts &cultural developments across other areas of East Kent, including the moredeveloped arts scenes in Whitstable or Margate. However, we consider that such a

scheme in Herne Bay at this stage would be unlikely, as the impact and spin-offbenefits for nearby destinations (such as Herne Bay) are, as yet, intangible. We doacknowledge that there is some anecdotal evidence that there is an element of theexisting North Kent artist community that would welcome relatively cheap workshop /gallery space in Herne Bay.

4.9 Marina

Many coastal harbours have traditionally catered for industrial craft such as freightcarriers and fishing vessels. In recent years, there have been a number of newmarina / harbour developments in coastal locations as developers andharbourmasters have acknowledged the growth and revenue potential of the leisure

sailing market.



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There are at least 236 coastal marinas in the UK and Channel Islands, providingaround 49,000 berths. These are concentrated in South East and South WestEngland.21 The vast majority of these moorings are now occupied by leisure craftand there is a shortage of large berths to meet the growing trend for larger pleasurecraft as boats become another badge of middle / upper class affluence despite the

recession.


Herne Bay Sailing Club (HBSC) is located towards the eastern end of the seafront,adjacent to Kings Hall, and is an RYA-accredited training centre. We have spokento the club and understand that they currently have 212 members and a strong cadetforce. In addition, we understand that some members have graduated from dinghiesto yachts, but have to moor their craft at Ramsgate, Faversham and Dover due to adearth of local moorings in the Herne Bay & Whitstable area.

There are established marinas at Swale (Conyer) and Ramsgate, although we

understand that the latter may be full. Ramsgate also has a greater range offacilities than Swale, which is reflected in considerably higher prices. We alsounderstand that there may be plans for a marina development at WhitstableHarbour, although have been unable to confirm specific plans / the current state ofthe project at the time of writing.

4.9.2 Marina Appraisal

At present, there are a limited number of mooring buoys within Herne Bays harbourarm adjacent to the Pier. We have spoken to some local sailing enthusiasts whohave highlighted that it would be possible to fit a number of floating pontoons withinthe existing harbour arm, and that there would be significant interest in such a facility

with limited maintenance requirements.

4.10 Watersports

Watersports appeal to a broad spectrum of users. Recent years have witnessed agrowth in participation in sailing and other watersports activities, with an estimated 4million people in the UK participating in 2007. There was, however, a significantoverall drop in participation levels last year, as shown below.

Figure 4.10: Participation in Selected Waterspor ts & Sailing Ac tivit ies

ActivityParticipation Rate (% of Adul ts) % Change

2006-082008 2007 2006

Any activity 23.03 29.63 28.03 - 17.8

Any boating activity 6.20 7.84 7.25 - 14.5

Water skiing 0.60 0.78 0.67 - 10.4

Small sail boat activities 0.87 1.16 1.09 - 20.2

Windsurfing 0.35 0.48 0.54 - 35.2

Kitesurfing 0.13 0.18 0.09 + 44.4

Angling (from the shore) 1.90 2.47 2.27 - 16.3

Coastal walking 10.42 13.32 12.21 - 14.7

Spending general leisure timeat the beach

9.01 13.10 12.49 - 27.9

Source: Watersports and Leisure Participation Surveys 2006 2008

21 Economic Impact of Coastal Marinas; British Marine Federation, September 2007



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The market for most watersports activities is concentrated amongst affluent middle-aged groups (particularly those aged 35 54), although more adventurous activitiesare most popular amongst those aged 16 34.


We are aware that Herne Bay is currently a popular destination for leisure jetskiiers,both day and longer stay visitors. A number of these currently stay overnight atweekends in the Premier Inn at Blacksole Farm. This highlights the potential of thewatersports market to attract new overnight visitors to Herne Bay and thesurrounding area, although the impact of such visitors has, at present, not beenquantified. The creation of the Herne Bay and Whitstable Jetski and WatercraftSociety (JAWS) in 2003 demonstrates the growth of interest in such activities.

Aside from the local sailing and yachting clubs (Herne Bay Sailing Club andHampton Pier Yacht Club), our research has not identified any RYA-accreditedwatersports centres within the town. There is a watersports equipment rental facility

located on Central Parade and Herne Bay Amateur Rowing Club is also located atHampton Pier adjacent to the yacht club.

4.10.2 Watersports Appraisal

There would appear to be the potential for the Pier to house a base for watersportsactivities. Such a facility would be likely to fit well with the catchment populationprofile identified in chapter 3.3. There may, however, be some concerns overviability, with an extensive tidal range locally that may restrict watersports activitiesat low tide, for example.

In addition, many of the existing watersports activities are informal and not basedaround either of the existing sailing / yachting clubs in Herne Bay. The developmentof a formal watersports base at or adjacent to the Pier (perhaps coupled withrestrictions on areas for watersports activity), may in fact deter the existing jetskiiers/ overnight visitors from continuing to visit Herne Bay. Such a scheme could,therefore, potentially have a negative economic impact on the town.

4.11 Cable Car

The concept of a cable car / chair lift / aerial tramway has been highlighted by someof the stakeholders that we have consulted. Accordingly, we have considered thepotential for such a scheme at Herne Bay Pier.

Such attractions generally consist of one or two fixed cables , one loop of cable and

a number of passenger cabins or seats. The cable is usually driven by an electricmotor, with a number of supporting towers en-route.



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Figures 4.11 & 4.12: Examples of Gondo la Lift-Style Cable Car Rides

Source: Poma

There are very few such developments in the UK. The key UK-based schemes are

at the Needles on the Isle of Wight, Heights of Abraham in Derbyshire, Nevis Rangein Scotland, and Llandudno in North Wales (although there are other rides at majortheme parks such as Alton Towers).

This is due to the generally high cost and logistical difficulties of such rides. We areaware, for example, that the cost of replacing the 250-metre long cable car ride atthe Needles (for insurance purposes) is 1.75 million.22 This is without the ongoingannual maintenance requirements. The cost of construction in Herne Bay (for a farlonger ride) is likely to be considerably higher, and this is without the cost ofrestoring the Pier Head to accommodate visitors being taken into consideration.

4.11.1 The Local MarketAs highlighted, there are no comparable examples in the South East aside fromthe Needles. This is likely due to the high costs associated with such schemes.

We understand, however, that there are proposals for a cable car in Dover runningfrom the castle to the town and seafront as part of a 7.75 million bid for SeaChange funding23. We have spoken to the Council who have advised that atechnical and commercial feasibility study is currently being undertaken, and theintention is to subsequently market this opportunity to the private sector in 2010.Due to the current financial climate, there must be a considerable degree ofuncertainty as to whether this scheme will come to fruition. This project has received

around 400,000 of Sea Change funding to develop in more detail, but is linked toother key attractions (eg. Dover Castle attracts more than 330,000 visitors pa).

4.11.2 Cable Car Appraisal

There are few such attractions in the UK. Clearly, such an attraction would create asignificant level of interest the Needles ride, for example, attracts in excess of300,000 visitors per year. The high cost of developing such rides does, however,preclude many from investing in the concept, and may stymie plans for such anattraction at Dover in the short to medium term at the very least. In addition, itshould be noted that the potential ride at Dover is linked to well-established major

22 Heritage Great Britain Ltd 23 This is Kent 6 November 2008



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visitor attractions to generate potential visitor numbers. This would not be the case to the same extent at Herne Bay.

We anticipate that the cost of construction of such a ride at the Pier would beextremely high, and is unlikely to be a realistic development opportunity. However,should the Council wish to investigate this option in more detail, then we wouldrecommend commissioning a detailed feasibility study from an engineering firm thatspecialises in such schemes, to ascertain the costs involved.

4.12 Enabling Development

There may be a need for some form of enabling development to meet any funding /development shortfall to ensure the future of the Pier. We have consideredresidential and beach hut development in this context.

4.12.1 Residential Development

A number of comparable projects see Southwold Pier in Appendix 1 have used

residential development at the root end of the pier to finance pier restoration. We donot consider the Pier itself a suitable location for residential development. There issome limited space at the root end of the Pier and, although we doubt that this wouldbe considered acceptable in planning terms, it is perhaps something the Councilmay wish to consider before rejecting outright. Alternatively, there may be otherlocal sites that could be sold off to provide an injection of capital funding for theredevelopment of Herne Bay Pier.

4.12.2 Chalets, Beach Huts & Summerhouses

Beach huts are a very British phenomenon and have long been a traditional form ofseaside leisure provision by local authorities in coastal areas. The concept originally

began as changing rooms for bathers in Edwardian times.

There are an estimated 20,000 beach huts around the British coastline24, with themajority to be found on the southern and eastern coasts of England, clusters inWales and a few further huts dotted around Scotland and Ireland.25

Across the UK, the smallest beach huts are generally on the market for around5,000 to 6,000, although huts have sold for considerably more. Indeed, pre-recession, a large wooden beach chalet (17ft x 15ft) was put on the market for280,000 at West Bexington in Dorset.26

There are a number of existing locations in East Kent. Canterbury City Council

operate 257 beach huts to the west of the Pier, which are all privately owned. Thereis a proposal for 40 additional huts at East Cliff (near Kings Hall). Whitstable offers anumber of beach huts and chalets on the Tankerton Slopes, with Dover DistrictCouncil offering a number of beach huts at both St Margarets Bay and Kingsdown,near Deal. There are also ten locations in Thanet offering beach huts (managed byLeisure Force on behalf of the Council).

24 The Guardian 14 July 200725 www.beach-huts.com

26 BBC News 27 November 2007



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Figure 4.13: Beach Hut Sale Prices in East Kent (as at 13 August 2009)

Hut LocationApproximate Size

of HutLow Price () High Price ()

Whitstable 10ft x 10ft 19,000 26,000

Herne Bay 8ft x 6 ft 7,950 9,500

Source: HLL research

The above table does show that huts in Herne Bay are considerably cheaper than inWhitstable. Having spoken to Leisure Force and Dover District Council, we alsounderstand that waiting lists in Thanet are at least several years, whilst the waitinglist at St Margarets Bay (between Dover and Deal) has been closed due to an 11 12 year wait, whilst Kingsdown (near Deal) has an approximate 10 year waiting list.

4.12.3 Beach Huts Appraisal

The asking price of huts currently being marketed in Whitstable together with the

extremely long waiting lists reported elsewhere in Kent highlight that levels ofdemand for beach huts and chalets has remained extremely high despite the currentrecessionary climate. This suggests that there may be demand for additional unitsat Herne Bay, which would provide the Council with a degree of rental and / orcapital income from new units. The location of any new beach huts will need carefulconsideration, but could possibly include huts sited at, or around, the foot of the Pier.

4.13 Commercial Investment Potential - Conclusion

4.13.1 Market Climate

The current market is extremely challenging for most leisure operators. Whilst some

sectors, such as cinemas, are performing well, the operating companies aredisplaying considerable caution in expanding, and are finding it difficult to fundfurther development. It is reasonable, however, to assume that this position will notcontinue indefinitely. Therefore, our advice is based upon a return to a more normalmarket, where funding is available at sensible rates to competent leisurebusinesses.

4.13.2 Initial Assessment of Commercial Potential

Accordingly, this chapter has reviewed a number of possible uses which may beappropriate for Herne Bay Pier. To further identify the likely level of commercialinterest we have spoken, on a confidential basis, to a wide range of leisurecompanies to establish whether they may have an appetite for involvement in anyfuture development on the Pier.

The sample of major national restaurant companies approached do not haveany serious interest at present. Whilst this view is undoubtedly coloured bythe current economic situation, we think it is unlikely that the position willchange materially when the market improves. Major restaurant (and related)companies have a well-defined target profile for new investment sites. HerneBays relatively limited population size, together with its catchment for suchpurposes, mean that it is unlikely that a major branded operator will beattracted, at least in the short term. That is not to say, however, that there will

not be any interest from existing local operators in such an opportunity onHerne Bay Pier. It appears that a number of local operators are performing



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well and we consider that there is likely to be some interest from localoperators in new opportunities on a revamped Pier. However, such interestmay be tempered by the number of existing venues nearby, and the Councilwould probably need to develop the units itself, leasing the opportunities tolocal entrepreneurs in exchange for annual rental income.

We think it unlikely that restaurant operators would be interested in taking spacewithin the existing building, however reconfigured it may be.

There is no current interest from urban leisure operators (such as cinema ortenpin bowling). Most acquisition programmes have been closed down in thecurrent market, but even in an improved climate it is unlikely that Herne Baywill figure highly on a target list for such uses given the alternative investmentopportunities available.

There has been a mixed response from childrens play operators. In general,concern was expressed regarding the nature of the catchment. One company

has indicated a willingness to consider the proposition further. However, theyare currently considering a site in Chatham which has a larger catchment andthus investment in Herne Bay may be unlikely.

One of the principal operators of aquariums in the UK has turned down thelocation as unsuitable from their business perspective.

Discussions with local property professionals indicate a relatively weakdemand in general at the present time, although this should improve over thetimescale of the project.

4.14 Summary

The current economic climate has clearly had an impact on the developmentopportunities available for Herne Bay Pier that would realistically attract majordevelopers and operators.

Nevertheless, we consider that with an appropriate scale and mix of some of thefollowing uses, Herne Bay Pier would complement the towns existing attraction toboth the older visitors and young families market, and should generate some interestfrom operators (albeit likely to be mostly locally-based, smaller-scale entrepreneurs):

Victorian themed childrens rides (seasonal);

Childrens indoor play centre;

Family restaurant / caf;

Seaside retail concessions (seasonal);

Heritage visitor centre (public subsidy);

Arts & crafts workshops and galleries;

High quality restaurant / bar facilities;

Watersports / marina / mooring facilities;

As demonstrated in Appendix 1, much pier-related development nowadays isfocused at the shore end where there is sufficient space, and the costs and risks

associated with development are considerably lower than on the pier itself. Giventhe existing businesses and gardens on the seafront in Herne Bay, we consider thatsuch development potential is limited in this location, although the high demand for



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beach chalets along the North & East Kent coast may offer some potential to raiseadditional (limited) revenues to offset the cost of Pier redevelopment.

If the Pier Pavilion building is demolished, as recommended later in this report, itshould be possible to generate commercial interest for the uses listed on the deckspace created.

In terms of a major rebuilding of the Pier, however, from a market supply & demandperspective, we consider that, unless the Council is able to rebuild the Pier itself whether via grant funding or enabling development it is likely that the desiredoutcome will not be achieved, certainly in the short to medium-term. This is a similarpicture to that arising from the PMP report written in a considerably strongereconomic climate than at present.



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5 DEVELOPMENT OPTIONS APPRAISAL

5.1 Introduction

Having considered the local demand profile, national market trends and local supplyof a range of leisure and tourism-based uses, together with a number of (both

positive and negative) case studies of pier-related development discussed inAppendix 1, we are now in a position to formulate a number of development optionsfor further discussion and consideration by the Council and the Pier Trust.

It is important to note that we have assumed that the Councils annual revenuebudget will continue to include an allocation for the maintenance of the existing Piersub-structure (estimated at 30,000 pa). The Council have confirmed thiscommitment, and this cost has therefore been excluded from our indicative financialprojections.

From our research and discussions with the Pier Trust, Council, developers andoperators, we have broadly grouped this chapter into the following headings:

Pier Pavilion Options;

Development Phase 1;

Development Phase 2;

Longer-Term Development Options.

5.2 Pier Pavilion Options

5.2.1 Retention & Refurbishment of Pier Pavilion for Leisure / Tourism Use

Estimates provided by the Council suggest that the cost of fully repairing andrefurbishing the Pier Pavilion as a sports centre would be in excess of 3 million.This considerable investment, which would still not provide a modern and multi-usesports centre, was a key factor in the decision to relocate.

The 3million figure includes allowance for refurbishment of existing facilities (eg.sports hall) and may be higher than refurbishment and fit-out for alternative leisureand tourism uses. With this in mind, we feel that a figure of 2.5 million would be anappropriate estimate of the refurbishment costs for an alternative leisure or tourismuse. The cost of demolition (estimated at 425,000) would of course be saved.

It is highly unlikely that due to this high cost and the limited level of commercial

leisure interest in the pier there would be any commercially viable use for the pierthat re-uses the existing Pavilion building. The table below highlights the likelyinvestment deficit associated with refurbishing the Pier Pavilion for large-scalecommercial leisure use. This clearly shows the non-viability of retaining andrefurbishing the existing building.

Figure 5.1: Large-Scale Commercial Leisure involving Refurbishment of Pier Pavilion

Rent: 20,000ft @ 8 per ft 160,000 pa

X Years purchase in perpetuity @ 10% X 10

Investment Value 1,600,000

Less: Refurbishment costs 2,500,000

Deficit (900,000)Source: HLL estimates



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5.2.2 Demolition of Pier Pavilion

There are undoubtedly visual and aesthetic arguments surrounding the demolition ofthe Pier Pavilion, but we have left these to others.

Based on costs supplied to us by the Council, the demolition of the existing building

is estimated at 425,000, to include tarmac reinstatement over the existing footprintof the Pier Pavilion. Should timber decking be required then this would add a further175,000, although it has been agreed that this additional cost cannot be justifieduntil the future use of the Pier is known.

The initial 425,000 has already been allocated in the Councils capital programmefor 2011. There is, therefore, no need to require any of the development optionshighlighted to take account of this cost.

Due to the cost of refurbishment greatly exceeding the cost of demolition and rebuild, the remaining options presented are based on the assumption that the existingPier Pavilion is demolished.

5.3 Development Phase One (Events Space)

On the assumption that the existing Pier Pavilion building has been demolished, thePier could initially be utilised for informal recreation purposes, deckchair hire, fishing,special events, exhibitions and farmer / local produce markets.

Figures 5.2 & 5.3: Examples of Event Space / Pier Open Space

Source: www.travelblog.org / Brighton Pier

There is clearly limited revenue potential in such a concept, but equally limited risk

(as maintenance and demolition costs have already been allocated in the Councilsrevenue and capital budgets). We understand, for example, that Herne Bay TownCentre Management put on an average of 10 outdoor events per year (excludingHerne Bay

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Humberts Leisure Herne Bay Pier report January 2010

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