The effects of the economic downturn were felt to different degrees across the leisure market in 2010.

While the late night sector remained under pressure, the budget fitness, spa and cinema businesses performed well during 2010, according to Christie + Co's Business Outlook 2011 publication.

The UK's budget health and fitness sector remained particularly robust in the face of the recession, with transactional activity showing signs of being at pre-credit crunch levels.

Fitness4Less, the Gym Group and Pure Gym lead the field in acquisitions, exploiting the opportunity to expand their low-cost concepts into key locations.

Deal activity remained subdued in the middle and at the top end of the fitness market, although private equity interest in the sector showed a marked increase on 2009 with the primary corporate deal of the year involving the Barclays Ventures backed management buy out of Total Fitness.

Jon Patrick, head of leisure at Christie + Co, said: "The limited activity was undoubtedly due to lack of debt funding however we were pleased to see the return of private equity players keen to back high calibre individuals and management.

"Some of the aggressive sale and leaseback deals that were completed at the peak of the market are causing distress, as rents become unsustainable and we expect to see more active estate management in 2011."

The outlook is not so rosy for the late night sector, though. Nightclubs continued to experience a decline in income and the challenging conditions took their toll on a number of operators in 2010.

Luminar, the UK's largest nightclub operator, continued to seek ways to turnaround performance, and agreed tie-ins with Jongleurs, the Ministry of Sound and HMV. However in its latest 12 week trading statement to 6 January it announced a further fall in like for like sales across the period of 19.4 per cent.

Patrick added that he expects the UK leisure sector to face a period of austerity over the coming months as the public sector cuts and VAT rises affect consumer spending.

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Christie + Co's predictions for 2011
• A reduction in discretionary spending and a more austere outlook for the sector as a whole
• Money chasing smart locations
• We can expect to see more distress in the nightclub sectors
• Re-invention in the late-night sector - more bespoke nightclubs
• The late-night sector will be negatively impacted by the Police Reform and Social Responsibility Bill, which will charge a late-night licence fee to cover the costs of policing
• Competition, consolidation and in some instances failure within the budget gym sector and smaller private health clubs
• May see active estate management in the mainstream gym market