HEALTH & FITNESS
The growth of the low cost gym sector is giving the health and fitness market a boost, finds Shef ield Hallam University's Leisure Forecast report. Themis Kokolakakis explains the findings
FITNESS LOW
A
supply-induced expan- sion is the basis for a signifi cant improvement in the fortunes of health and fi tness operators
despite the uncertain economic envi- ronment in the UK and Europe. In 2012, the health and fi tness mar-
ket is expected to reach £2,265m (US$3,596m, E2,707m) in value, rep- resenting an increase of 2 per cent in real terms. This is mainly measured by the number of members or par- ticipants. During the period 2011 to 2015, the market, despite its matu- rity, is expected to grow by almost 12 per cent in real terms.
MEMBERSHIP EXPANSION In terms of membership, the market is dominated by David Lloyd (450,000 members), Virgin Active and Fitness First. However, it is still open to acqui- sitions and consolidation – especially amid the current economic climate. The economic decline, primarily in Europe and secondarily in the UK, has had a triple effect on the economics of health and fi tness operators. Firstly, low-cost operators have had an ideal opportunity for expansion; secondly, the big chains, with plans to expand abroad, have had to reconsider the risk against the expected benefi t; and thirdly, the UK market, despite its
66
Leisure Forecasts predicts that the health and fi tness market will grow by 12 per cent between 2011 and 2015
COST
maturity, has presented an opportunity for expansion by US chains.
LOW-COST BOOST The sector pushing forward most aggressively is the low-cost 24-hour opening gym. Examples include The Gym Group and Pure Gym – low-cost operators which offer the use of facili- ties without a monthly contract and are open 24 hours a day.
Last year Pure Gym raised funds (£10m, US$16m, E11.7m) to enable it to expand across the UK. It plans to open 20 new locations by the end of 2012, taking its portfolio to 45 clubs, while The Gym Group, with 20 clubs, is also fully funded to open 20 new sites a year for the next four years.
Read Leisure Management online
leisuremanagement.co.uk/digital
Budget gyms are faster and cheaper to build, which is the main reason for the interest shown by US chains. Plus, only three per cent of existing health clubs are in the low-cost category, so the potential is immense, not only for taking market share, but also for attracting new participants in the mar- ket. Indeed the initial reports are very encouraging in this regard. Another signifi cant development
was the opening of the fi rst easy- Gym clubs in Slough and Wood Green last year. The easyGym company has a policy of offering pay-as-you-go monthly fees without requiring a long- term contract. Its business plan is to open 10 clubs per year, although roll- out activity seems to have slowed.
ISSUE 2 2012 © cybertrek 2012
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76