INDUSTRY INSIGHTS ASIA PACIFIC
John Holsinger director Asia Pacific, IHRSA
C
hina will continue to lead the growth in Asia, along with India. The two largest populations in the
world, they are also the most untapped for our industry. Some pundits are expecting the fast growth to go through some reconciliation in the coming two or three years as the early adopters modify their business models for better financial success. The industry is waiting for an
international chain to successfully break into China and go head-to-head with the many multiple-location local chains. In India meanwhile, although several international chains have established a foothold, local players still maintain the leading role in identifying the best models to cater for the country’s wide socio- economic variations. The challenges for international
operators in both markets remain cost and supply of infrastructure, language, and keeping up with customers’ fast-changing expectations. Nevertheless, prospective new entrants to the market are learning from the mistakes made by those first to market, tweaking their models for success in the Asia Pacific cultures. Availability of qualified personnel is
also a significant challenge, with the sector’s fast growth seeing existing businesses raided for personnel to staff new facilities. Excellent staff training and building internal staff loyalty will be key to addressing this in the coming years. Throughout Asia, there is currently strong growth in hotel fitness: both
7 Health Club Handbook 2013 0
The Asian industry must focus on building stronger customer relationships
membership and guest usage models. As with standalone clubs, hotels’ equipment choices are focusing on software solutions as the differentiating factor. Local hotel management teams are also adding locally- chosen ‘best in class’ equipment as a USP, alongside their chains’ global supplier agreements. With lower infrastructure costs and the associated hotel amenities of pools, spas, and food and beverage, hotel-based facilities will continue to offer an interesting selection choice for their potential membership. Some budget chains are modifying
their contract terms downwards, seemingly without the additional motivational programming necessary to keep members coming back; near- fatal attrition rates of up to 70 per cent have been reported. Nevertheless, some struggling full-service clubs have
attempted to restructure by re-branding or cutting down to a budget model. Going forward, operators cannot rely on
fast growth and continual multiple venue expansion for survival in Asia’s competitive economic and business environments. The industry will need to adopt a focus on health, with strong elements of brand mission and pride in building customer relationships for the long term, rather than adopting unsustainable, primarily financially focused, business models. There is also a growing need for the
industry to self-manage and self-regulate by forming associations and sharing high-level standards development. This action alone could provide important credibility for the industry, counteracting negative perceptions and the beginnings of government-led regulation being brought about by current unwise, unsustainable business models.
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