Introduction

One of the first questions asked by those new to the idea of opening a climbing gym is, "how big should I build it?", and like most brick and mortar businesses that rely on customers walking through the front door, that depends greatly on where it's going to be located. For example, if the goal is to have a healthy financial return on investment, it likely doesn’t make sense to build a 20,000-square-foot gym in a town with a total population of 20,000 people. Properly sizing your gym to the given market is critical for maximizing the efficiency of your operation and the sustainability of the business. Succeeding at this step of the process will also result in a higher return on investment.

Determining the size of the market and how big to build the climbing gym can be broken down into the following steps:

• Select a location of interest
• Define the catchment area based on time or distance, considering competition
• Study the demographics within the target or catchment area
• Determine a target membership price
• Use or build a market model to translate market and industry information into likely member counts and other volumes for the given catchment area
• Using the market size determined in step 5, calculate necessary amenities (e.g. lengths of walls, number of routes & anchors) to meet capcity requirements given the likely membership levels. ClimbCalc, a build-up financial modeling tool, has a feature that we can use for this purpose. This is demonstrated in a later section of this article.

The Market Analysis section of this article will cover steps 1 - 5, and is followed by a section discussing capacity of a climbing gym operation, and finally a section on how to use ClimbCalc to properly size your gym to meet the specific capacity requirements given your market and competitive landscape.

Market Analysis

Market analysis begins when a piece of real estate has caught interest as a possible location for a climbing gym. Going through the entire Market Analysis process will result in a probabilistic outcome for member counts, and other usage volumes relevant to the business. The complete steps are broken out and described below.

Site Selection: Historically climbing gyms were primarily limited to industrial districts where rent was affordable and zoning allowed the necessary clear height. The industry experienced steady growth and now modern climbing gym business models thrive in city centers and mixed use spaces throughout the country. If possible, it is desirable to find real estate with nearby businesses that cater to overlapping demographics, that is young and active individuals.

Defining the Catchment Area: The catchment area will constrain the region for analysis. It is important to consider how long your members and guests will be willing to travel in this region to frequent the gym. In major metros with a lot of traffic, it is suggested to consider this in terms of time and map out the region given typical willingness to commute. In more sparse regions, it is likely sufficient to use a set of ring studies based on distance centered around the desired location. It is important to consider the existence of nearby competitors, as their operation will impact how this region is shared and divided.

Demographics: Climbers are primarily young and active individuals. When analyzing the demographics within the studied region, the population should be filtered to include only those who can afford a membership and weighted according to the levels of participation across the segmented demographic profile of the catchment area. This approach will more accurately limit the population to those likely to participate in climbing. Be wary of back-of-the-envolope math or rules of thumb commonly used in the industry, as they do not weight how the local population varies relative to other regions where these rules of thumb may have originated.

Membership Price: The membership price is a critical choice when targeting a specific market. It is important to consider the competitive landscape, the demographics of the region, and the amenities offered by the gym when determining the price. The price will be used to determine the likely number of members and guests that will frequent the gym, since those that cannot reasonably afford a membership should not be counted. A competitive price can also be used to justify better retainment and percentage of market share assumptions when modeling the market size.

Market Model: The necessary inputs have been gathered, now it is time to use a mathematical model to translate these assumptions and inputs into likely member counts and other volumes for the given catchment area. A more sophisticated model, like the one used at Climbing Wall Advisors, will employ probabilistic distributions of assumptions to generate a range of likely outcomes. This provides a clearer and more useful picture of the target market, which can then be used for further analysis and informed decision making. At the outcome of this stage we will have a target member count we can input into ClimbCalc to help properly size our gym for the studied market.

Climber Capacity

Climber Capacity is a critical aspect when it comes to sizing the climbing gym operation. It is important to have sufficient space and amenities to meet the demand of the market, but not so much space that the gym is underutilized with a much higher lease cost alongside additional operating and capital expenses. The capacity of a climbing gym is determined primarily by how many people can simultaneously use the space. This is a function of the length of its walls, the number of routes, or the number of anchors. To remain conservative in our estimate, and realizing most people frequenting a climbing gym will be there to climb, it is assumed the other spaces of the gym do not contribute to this overall climber capacity value.

A gym's climber capacity is a function of how many members or guests can be using the space simultaneously for climbing. The assumptions leading to this calculation can be broken down as follows:

• Number of climbers per anchor or section of bouldering wall: 2 climbers
• Length between anchors: 5 - 6 ft
• Length of walls & number of anchors: TBD - This is what we need to properly size given our market, determined below

Sizing Market to Capacity with ClimbCalc

Now that we understand the climber capacity measure, let's input our market's size in ClimbCalc to determine a suitable capacity number and size for our gym to meet the level of demand. Critically, the members will not check in at the front desk as an even distribution across all hours of operation. Instead, climbing gyms are typically busiest after work on weekdays, with Tuesday being the busiest. As a rule of thumb, 75% of a gym's check-ins occur Monday - Friday, with the remaining 25% on the weekends. If people are leaving shortly after arrival because the gym is too crowded during the busiest times, then the gym is likely too small for the given market, which is a much better problem to have than being oversized.

Demonstration in ClimbCalc

Input market size into ClimbCalc - in this example we will use 750 members at $75 per month as shown in the Gym Builder Wizard screenshots below.

Which will result in our Headcount by Day Part calculation in the Report column as shown below

This indicates that the current facility design has a max climber capacity of 110 climbers. Given our market size of 750 members, we expect a max headcount of 76 people to occur on Tuesday at 7pm during the busiest week of the projected results. This anticipated headcount leaves us with capacity to spare, a headroom of 30.9%.

This version of ClimbCalc resulted in a gym with usable floor space totaling 10,000 square feet with close to 10.8k sq ft of climbing wall area. [ Note that I am actively working on changes to the feature driving this, so if you notice different values than mentioned in this article, please send me an email so I can update it :) ] The length of walls, number of routes, and other parameters can be found and adjusted within the ClimbCalc application.

The capacity values can be modified by adjusting the length of rope walls or bouldering walls, as well as the spacing between the routes / problems.

The projected headcount values will be primarily affected by changes to the memership volume schedule, but it can also see adjustments from changes in many other parameters as well, such as operating hours.

The overall layout will greatly impact the amount of walls you can fit in the building, and thus the overall capacity. It is encouraged to work with an architect that has experience with building and designing climbing gyms, as those new to the concept tend to miss critical details (e.g. the amount of space the setting team needs for their duties). As the design cycle with your architect and planning team iterates, keep the values in ClimbCalc up to date to gauge balance between the market's level of demand and the size of the gym.

Note: ClimbCalc is still in early beta and I will be updating this post and other posts on this blog as well as documentation on climbcalc.com as I find time and when new features are developed and refined. If you have any questions or feedback, please reach out to me via email.