Climbing Gyms are Flocking to Kansas
By Joe Robinson
Picture roaming livestock on lush rolling hills flattening to rows of wheat swaying in the breeze as far as the eye can see. Picture open roads slicing wide green fields like outfield foul lines to connect pockets of gas stations which fuel engulfing farms. Picture a rock climber stepping out of a hatchback loaded with climbing gear to fill up at one of these pumps…and double-check Siri’s directions.
If you are like us, then Kansas only comes to mind in climbing discussions as a 400-plus mile rock-less wasteland to be endured on a road trip to the breathtaking mountains of Colorado. But the planned openings of three new Kansas climbing gyms in addition to the two existing climbing facilities in Wichita and western Kansas City – as well as two gyms on the Missouri side of Kansas City – suggest climbers are breathing regularly in the “Breadbasket of the World” and pinning Kansas addresses in their Smartphones as destinations instead of departures.
After speaking with leaders from four of the seven Kansas climbing gyms, the impression comes through that the rapid gym development in Wichita and Kansas City depends on both Kansas-specific and non-Kansas-specific causes. While Kansas does not offer much in the way of outdoor rock climbing (Rockclimbing.com lists a mere 10 routes for Kansas, the second fewest of all continental states), the topography, economy and culture of Kansas do afford a few advantages for indoor gyms.
First, and perhaps most significantly, there is some upside to being what National Geographic says is the seventh flattest state in the union, a benefit that could be called “the Midwest Paradox.” On the one hand, yes, outdoor rock climbing is nearly impossible to do in Kansas unless you bring a boulder with you. On the other hand, the absence of mountainous terrain requires Kansas adventure enthusiasts to rely more heavily on indoor businesses like climbing gyms for thrills. The absence of rocks to climb actually INCREASES the quantity of indoor rock climbers. This is the Midwest Paradox. “We are one of the flattest states in the union, and the closest climbing is 6 hours from us in Arkansas,” says David Kortje, owner of Bliss Bouldering and Climbing Complex, a full-scale gym set to open in November in Northeast Wichita. “From that standpoint, it’s a positive. We are going to be the new thing in town, the exciting thing that everyone is talking about,” he said.
Second, it’s one thing to desire adventure sports and quite another thing to have a place to enjoy them. Building a gym requires money, and if a lot of money does not come from a few hands then a little money must come from many hands. Fortunately for Kansas climbers, the communal culture of their state is conducive to the latter should large investments fall short. “I think part of it is the co-op mindset,” says Paul Polk, longstanding president of the Kansas Cliff Club climbing co-op, when asked about the elements which led to the climbing club’s creation in Southeast, Wichita. “Everything out here is done because the members have done it, from land to plumbing to building the wall to making the holds and the molds. We did all of it,” he said. In Midwestern states like Kansas where rock climbing is not a mainstream sport, pooling member resources may be a necessity for creating climbing gyms.
Lastly, climbing gym entrepreneurs in Kansas wishing to start for-profit gyms have benefited from recent economic development in their regions. Like many states, Kansas is experiencing significant economic growth following the Second Great Depression. According to the 2014 Kansas Economic Report by the Kansas Department of Labor, after a 4% decrease in real GDP in 2009 the state of Kansas witnessed four consecutive years of growth, and the leisure industries enjoyed some of that growth. “Wichita is divided into the East and West, and both sides are progressing,” says Kortje, who strategically located Bliss amidst a growing recreational complex he refers to as “a sports mecca” which “supports the edgier side of life.” Economic development in this area, then, has given Wichita adventure enthusiasts another island of plastic bliss (pun intended) on which to release their Plains-bound energy.
New Orleans Gets a Bouldering Gym
Press Release
NEW ORLEANS BOULDER LOUNGE SET TO OPEN CITY’S FIRST CLIMBING GYM
New Orleans Boulder Lounge will open New Orleans’ first indoor climbing facility in the Lower Garden District at 1746 Tchoupitoulas St. The grand opening is set for July 18 in the historic cotton press building, a beautiful, 125-year-old warehouse adjacent to the Market Street Power Plant. NOBL will feature 2,500 square feet of bouldering, climbing at lower heights without ropes, as well as a yoga studio, fitness center, and lounge space with a cafe and live music. Prior to NOBL opening, the nearest gyms were in Slidell and Lafayette. The nearest crag is 6 hours away.
New Orleans Boulder Lounge will offer both day passes and memberships for unlimited access to climbing, classes and events. Programming options will include climbing workshops, social leagues, camps, a youth climbing team, yoga and fitness classes, and community events. Programs will be available for all ages and experience levels.
“Climbing for us means community health,” said Eli Klarman, Founder and Director of Operations. “We want to create a space that brings people together around all sorts of activities, and NOBL is our way to provide a space for active, healthy living, with a focus on personal and communal growth. We couldn’t be more excited to share our love of climbing with New Orleans.”
Specials and events, including donation-based access and music and film festivals, are part of NOBL’s community space plan for members and guests. If you’re new to the sport, or want to learn more, NOBL will offer intro and technique classes as well as one-on-one coaching.
“There’s already a big community of climbers here,” Klarman said, “and we’re excited to provide them with a local climbing destination and to introduce the activity to a wider audience. It’s important to us that everyone has the opportunity to experience climbing and be a part of the community that’s forming here. We plan to help everyone get strong and have fun doing it.”
NOBL will be open Monday through Friday from 12PM-10PM, Saturday and Sunday from 10AM-10PM. Base membership will be $60. For more information check out climbnobl.com or follow New Orleans Boulder Lounge on Facebook. To schedule special events, birthday parties or corporate team-building, e-mail info@climbnobl.com.
Exit Strategy on Horizon for Climbing Industry
By Chris Rooney
It used to be that climbing gyms were more comparable to dungeons than to fitness facilities. The typical bouldering gym was a passion project, built by climbers for climbers to facilitate a lifestyle centered on climbing outdoors, not on indoor bouldering or sport climbing. Don Robinson, the UK man widely credited with developing the first artificial climbing wall, invented the concept because he noticed that outdoor climbers had no way to train during the winters. Subsequently, climbers experienced a high likelihood of injury upon returning to the crags when the weather warmed up. The primary goal was not on creating a growing investment that might lead to a financial return in the future. Even seeking to receive a return on investment in your climbing community might be seen as anathema to many “former dirtbags”, who traditionally subscribe to a culture wholly at odds with corporate interests.
But now, the industry is seeing an expansion in the kind of palatial indoor-focused gyms that attract a huge number of urban professional and family-oriented nonclimbers. The climbing gym industry has grown at an unprecedented rate in the past several years. In 2014, 29 new climbing facilities opened (9% growth over the previous year); in 2015, 40 new facilities are planned. Yet in the past three years, only 8 out of 353 commercial climbing facilities in the United States have been sold or acquired. While the indoor climbing market has grown, it has not reached the point of a robust buying and selling market for facilities, and the industry hasn’t seen many owners of large gyms exit their investments.
At the current rates of facility growth, Johnny O’Brien, cofounder of High Point Climbing in Chattanooga, Tennessee, expects to see a robust buying and selling market emerging sometime in the next ten years. “I think there’s going to come a point in time when people all of a sudden are going to start acquiring gyms, but there haven’t been a lot of acquisitions yet in the industry.”
In many industries, creating and executing on an exit strategy is a crucial part of the business plan. For a typical business, the exit strategy is a set of methods or contingencies that allow the business owner to mitigate future obstacles in the market, retire, sell the business, or move on to other projects. An exit might take the form of an acquisition, merger, or even an initial public offering (IPO). A certain amount of exits in an industry are an expected component of the natural “lifecycle” of an industry. Having a clear exit strategy in some ways is equivalent to having a clear goal for the business; creating value for the business’ sake will eventually bring it to the point at which it’s a viable candidate for acquisition by another facility or new gym owner, hopefully for a price greater than the initial investment.
The Industry Life Cycle
A typical business lifecycle consists of 4 general phases: an emerging phase, growth phase, maturity phase, and declining phase. In an emerging phase, new businesses and business models are developed in a burgeoning industry, with a market usually experimenting on the success of several different models or offerings. In a growth phase, revenues continue to grow, profit margins increase for certain products or businesses (or don’t) and competition increases, with new businesses entering the market all the time to take advantage of a growing market. In the maturity and declining phases, new entrants to the market slow down due, in part, to saturation of a market and slowing growth of revenues and profits (or declines, in the case of a declining phase). Exits like acquisitions usually begin to come into play during the growth phase, in which new products or facilities are built at an increased rate, the customer base grows rapidly, and competition tends to increase. In an industry like healthcare, exits occur regularly: if a business is profitable, it can be sold, because the industry has matured enough to have evolved proven business models, and the mergers and acquisitions community has a deep understanding, based on past experience, of how that business might perform in the future. For a business model based on a physical facility, such as a climbing gym, the number of facilities in the market factors into the exit strategy as well—it can make more sense as an potential business owner or investor to buy or invest in an existing business than to develop a new one in a market with many existing options. But in industries that have not yet reached maturity, like indoor climbing, the investment community will not yet have an experienced understanding of a viable business model for an indoor climbing facility. In addition, the principles by which these facilities are valued are still being established, especially given the ongoing growth in participation from new climbers and fitness enthusiasts. According to O’Brien at High Point Climbing, the climbing gym industry hasn’t standardized these principles of valuation like more mature industries have. “As you see profit margins increase, and in ten years you see a lot of people climbing, and gyms are profitable, and there are acquisition opportunities – that’s when I think you’ll actually get to the point where developing valuation principles that are applied to gyms happen like in any other industry,” said O’Brien. Some of these “valuation principles” are obvious: healthy profits, high value of physical assets, and a growing and loyal community of gym members. Growing membership, in particular, strongly indicates higher profit margins in the future. Others, including key employees like routesetters and instructors, local gym competition, the importance of a climbing facility’s location, and the value of similar facilities are simply still being established. For example, the cost of maintaining a facility that is both convenient and has the customizable space required for climbing substantially affects the value of the business. When these valuation principles standardize in the industry, it will become much easier—and more common—to acquire and exit successful gyms. But what can gym owners do now to prepare for the future of the climbing gym market?For Sale?
According to John Hawkey’s Exit Strategy Planning: Grooming Your Business for Sale or Succession, understanding the future value of your business is a fundamental tool for determining the timing of an exit, particularly for determining the cost/benefit ratio of selling now versus in five or ten years’ time. When it becomes clear that a business will be more valuable at a future date, gym owners incorporate that into their exit plans, and thus do not exit until they can maximize the value of the business. Alternatively, if the business’ value is projected to decrease in the future, then the owner has a compelling case for exiting sooner than later. Some of these industry-specific factors are still being developed in the climbing gym industry, but while participation in indoor climbing continues to grow, the future value of these climbing facilities is reliably projected to increase on their current values. “I would hope that in ten years, that there’s been some consolidations and buyouts, and perhaps we’ll have our first public company in the market out there,” said O’Brien.Wide Open
Many markets in the US have also not yet been saturated with facilities of every type, from sprawling indoor climbing and fitness gyms to tiny outdoor climber-focused training gyms. The gym industry is heading rapidly towards a diversification of climbing options in any given market, with large facilities like High Point Climbing, focused on climbing as a component of a fitness-based lifestyle, acting as alternatives to smaller training gyms with communities primarily training for the outdoors. Due to the lack of indoor-focused options for climbing in many markets, right now it’s a better investment to develop a large new gym – with a higher future acquisition value – than to acquire an existing facility. Interestingly, while the early gym owner’s inner “dirtbag” may have originally avoided selling the facility to maintain their climber cred and lifestyle, now the industry is moving towards a point where the growth in clientele is coming not from current outdoor climbers, but from nonclimbers, families, kids and fitness aficionados, looking for facilities that are “family-friendly,” have youth climbing teams, and fitness classes like yoga. “The demographics coming into our gym are coming from a broad range, from kids, young adults; you’re seeing climbing teams being developed across the country,” said O’Brien. By tapping into the customer base of the broader fitness facility industry, which had $22 billion in revenues in 2013 according to the IHRSA, a fitness and health club industry group, these large-format gyms are popularizing indoor climbing. Incorporating indoor climbing into mainstream fitness culture could potentially dwarf the revenues of the current indoor climbing industry in the years to come, leaving the door open for major acquisitions in the future. O’Brien sees this mainstreaming of climbing as a major reason for the current industry growth: “I think we’re on the right trend, because you see dynamic growth in the climbing gym industry itself, you’re seeing a lot of new development, a lot of new construction. You’re seeing a lot of the newer model gyms being built whether they’re full service fitness facilities included with the climbing element. And a lot of them are really becoming family recreation centers,” he said. “And so I think we’re on the right path. It seems like we have a lot of momentum going right now in the climbing gym business, but we have a long ways still to go.” Chris Rooney has been a Chicago-based climber for 7 years, and a writer for 3. Ask him for beta at @crooneys.The Great Headphone Debate
Community is one of the most important aspects of modern climbing gyms. Friendships are nurtured, marriage proposal are made, and complete strangers feel comfortable cheering each other on, asking for beta, and chatting about their favorite climbs. So what should gyms do about technology that comes in the way of this human connection?
Recently, Pacific Edge Climbing Gym in Santa Cruz, CA ran headlong into this issue while deciding whether or not to implement a ban on headphones/earbuds in the bouldering area (rope climbers were already precluded from using them). With the increased use of smartphones over the last few years, they had concerns that their use might negatively impact the sense of community at the gym; they also worried that boulderers listening to music with earbuds would not be adequately aware of their surroundings.
They aren’t the only ones worried that technology is hurting interpersonal interaction. A 2014 study titled ‘iPod use and the perception of social introversion’, published in the journal Leisure Studies, found that headphone users were “significantly less likely to engage in social behaviors such as making eye contact, saying hello and acknowledging a person walking past them.” The devices not only made the wearer more isolated, the headphones seemed to broadcast a signal that they did not want to interact, creating a social barrier.
Banning the use of earbuds in all climbing areas was in line with Pacific Edge’s policy of encouraging and supporting positive human interactions. They had already decided to buck the trend of offering public wifi to their customers in an effort to promote community. The owners made this decision after observing that people engaged with their phones were less engaged with each other.
So after much discussion management planned to change the gym’s rules around earbuds.
“We put up a two week notice of a policy change that there would be no phones/media devices in climbing areas,” Mike Kittredge, Co-Manager at Pacific Edge, told CBJ in an email interview.
The rule change did not go over well.
“We quickly got push back from our membership. Most folks understood that no phones should be allowed in the roped areas for obvious reasons, but folks had some valid points as to why if they were aware of climbers, [they should] be allowed to have them in the bouldering area,” said Kittredge.