Microgyms such as Fitness Mosaic are helping to create a buzz in the industry
NICHOLAS BATRAM Travel and leisure analyst • Peel Hunt
“T
he main concern in the City regarding the health and fitness
sector was that membership might drop off during the recession, if people saw membership as a luxury or discretionary. But as in the US, this didn’t happen. What actually happened was that usage increased. The industry has done well in a difficult time when consumers haven’t had much money. The test will come when someone wants to come to market.
There’s some negative history – it didn’t end well in the City for Holmes Place. However, with the right company and the right valuation, the market could be open. There’s been press speculation surrounding Virgin Active: the company has performed impressively over a long period of time. Equally, growth opportunities in the budget sector look exciting. Technology – devices like Jawbones and Fitbugs – are also an
interesting trend, and it’s good the fitness sector has embraced this rather than seeing it as a threat in the way the retail industry did. I think the industry needs to find ways to use technology in an innovative way to mobilise those who are inactive. While the government wants a healthier society, there’s opportunity at both ends of the market to find ways to engage the inactive population. I think technology could play a key role here.
” July 2014 © Cybertrek 2014
NEIL HARMSWORTH Co-founder • payasugym
“T
o attract investment, the industry needs to demonstrate that it’s a
growth sector. The rise of budget gyms has created growth by widening the target audience, but this sector will quickly mature in UK, as it has done in other regions. Now the industry has to focus on delivering the next growth
opportunity, by looking for innovative solutions to engage new audiences and showing there’s a real possibility of moving from 12 or 13 per cent population engagement to 25 per cent. Market conditions are good, the investment market is
moving into a strong period and customer disposable cash is increasing. If the sector can find a new way of engaging customers, there’s an opportunity to capture a proportion of disposable cash and ensure it’s dedicated to fitness. Outside the budget sector, I expect little to happen in terms
of investment. The first stage is for the leaders in the fitness industry to trial and test new models to demonstrate growth. Learning from other industries will be critical: a stagnant car rental market grew through the innovation of Streetcar/Zipcar, and the hotel market through AirBnB. Once business plans can be created, demonstrating a clear path to growth, then investment will follow.
” Read Health Club Management online at
healthclubmanagement.co.uk/digital 39
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