BioRitmo is Corona’s premium health club brand, operating 28 clubs in Brazil – mainly São Paolo
layout to enhance the user experience, with gym floors split into three distinct zones to cater for different types of member. “We’ve created three clubs within a club: one area for those who just use machines to exercise, mainly beginners and middle-aged to older users; the central area targeting people in their 20s through to early 40s, with a more competitive feeling and a focus on functional and small group training; and the other end exclusively for heavier free weights and personal training. “We also have different types and
ages of instructor on the gym floor at different times of the day, depending on the profile of the members in the club.”
A chal lenging market But it’s not all been plain sailing. In 2007, cashflow was “very tricky – I thought the business might fold”. And operating in Brazil doesn’t get any easier today.
“There’s a national water shortage, so we’re having to drill 36 wells this year and buy trucks to move water from one site to another. If people can’t shower at our clubs, then they’ll have to close,” explains Corona. “The cost of water is likely to go up 35
per cent this year – assuming there is any – and the cost of power up 55 per cent. Meanwhile the Brazilian economy
June 2015 © Cybertrek 2015 There’s a national water shortage, so we’re
having to drill 36 wells this year and buy trucks
to move water from one site to another
will drop 2 per cent and inflation is sitting at about 8 per cent. People have less disposable income.” The company will therefore focus
on growing its low-cost brand – although even then, given the challenging conditions, growth will be slower than in previous years. “Last year we opened 52 SmartFit
clubs in Brazil, but that won’t be the case this year. We have to base all our plans on zero growth in Brazil,” acknowledges Corona. “The value of the Brazilian Real is also decreasing against foreign currency, which is another big challenge as all our equipment and maintenance comes from the US or Europe. We’re currently buying more
from Europe, because the Euro is also struggling. And of course a lot of our resources are going towards tackling the water shortage at the moment.”
Cost versus salary He continues: “Another reason we’re focusing on SmartFit is that the premium end of the market is already saturated. In spite of the tough economic conditions in Brazil, and the fact that people in the US earn at least three times more than people in Brazil, there are more high-end clubs in São Paolo – where the majority of our BioRitmo clubs are – than in New York City. So we’ll open more high-end clubs, but probably only one or two a year. “Meanwhile, only about 4 per cent of
the Brazilian population holds a gym membership at the moment, so there’s scope for growth if we can educate people to look beyond aesthetics to the health benefits – although that in itself will be a challenge. However, I don’t think we’ll get much past 6 per cent, because the cost of building and operating clubs is such that US$20 really is the lowest you can charge – that gives you just a small profit – and lots of people can’t afford that. “In the US, people’s salaries are three times higher and they pay US$10 a
Read Health Club Management online at
healthclubmanagement.co.uk/digital 37
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