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ABC asks if fitness centre growth cycle might be coming to an end

ABC asks if fitness centre growth cycle might be coming to an end
May 14, 2018

National broadcaster the ABC has today reported on the “increasingly crowded” gym and fitness industry, suggesting that it may soon reach “peak market saturation”.

Following an interview with Fitness Australia Chief Executive Bill Moore last month to discuss ‘The Barbell Economy: How high can it go?’, the ABC has followed Australasian Leisure Management’s lead in reporting on IbisWorld data on performance in the gym and fitness centre market over recent years.

With IbisWorld reporting that the Australian fitness industry is now worth $2.4 billion, Moore told the ABC that the industry has been lifted by the invigorated interest in personal wellbeing in the last decade.

He advised “there's never been as many health clubs as there are now.

"The accessibility, the availability is nothing like it has ever been before."

One of the most significant shake-ups has been the introduction of budget 24/7 gyms - intermittently staffed centres that represent the ‘high volume, low cost’ side of the market.

IbisWorld Market Researcher Bao Vuong said the business model helped expand the size of the industry over the last five years, but fears the gains may be coming to an end, advising "as the market becomes more saturated, this is anticipated to slow industry revenue growth.”

However, with the fitness industry, according to Moore, still catering to the traditional 18-to-39-year-old demographic, he sees that the ‘fitspo generation’ has led the recent market growth for fitness and exercise services in Australia.

Moore advised “that's the Instagram generation of selfies and the celebrities out there with enormous followings.

"(Gyms) do still seem to cater to that youthful market - the fitspo generation really has a lot more people interested in the physicality of exercise."

Providing an example of the changing market, the report Sydney gym Hiscoes which, since it opened in 1981, has survived recessions, the Global Financial Crisis and numerous changes to the fitness industry.

Hiscoes Director Susan Kingsmill said about a third of the gym's clientele were long-term customers, but the greater competition meant it is always looking for leads on transient customers that move between gyms.

Kingsmill, a former Fitness Australia President, told the ABC “at the moment we need 170 to 200 leads a month to keep the whole ball rolling.

"We don't have an option for failure, so we don't do very bold things, we do modest things."

Kingsmill said she thought the budget 24/7 gym boom was "a real step back" and is glad the model is reaching its peak.

She sees that competing on price - and the associated cost squeeze - has left plenty of challenges for the rest of the industry, adding “we've all done the best we possibly can with the costs in the fitness industry, and we are all offering great value.

"So we really need the economy to do well, we really need people to have money in their pocket so they can start to pay a market rate for really good service."

Hiscoes uses its social media presence to appeal to a new generation of gymgoers.

Here, Kingsmill explains “we use our social media guru to tell us when those key words are trending the strongest, then we go out with our flyer.

"We're right in the middle of the advertising world here, and we need to look up to par for those millennials."

However, Kingsmill still expects plenty of volatility ahead, with plenty of churn in the boutique end of the market as some small businesses succeed and others fail.

She advised that Hiscoes is banking on one aspect of its business to help see it through, concluding “the fitness industry had always been about people and passion.” 

Images: HIIT at Hiscoes (top) and the facility also caters for older exercisers with Hiscoes head trainer, Jim O'Donovan, having been in the business of personal training for over 30 years (below).

8th April 2018 - IBISWORLD SHOWS THAT 24/7 BUDGET GYMS HAVE TRANSFORMED AUSTRALIAN FITNESS

12th March 2018 - AUSTRALIAN FITNESS INDUSTRY REVENUES TO GROW TO $2.4 BILLION BY 2022/23 

10th March 2018 - GYMS AND FITNESS CENTRES AMONG AUSTRALIA’S MOST SUCCESSFUL FRANCHISE OPERATIONS

6th November 2017  - FITNESS AUSTRALIA ANNOUNCES LATEST INDUCTEES TO THE FITNESS INDUSTRY ROLL OF HONOUR

18th October 2017 - FITNESS SHOW PROVIDES A SNAPSHOT OF THE EXERCISE HABITS OF AUSTRALIANS 

24th March 2017 - FITNESS INDUSTRY BENEFITS FROM DECLINE IN SPORT PARTICIPATION 

20th April 2016 - LOWER WAGE COSTS BOOST PROFITABILITY OF 24/7 GYMS 

12th October 2014 - 24/7 FITNESS TREND SHOWS NO SIGN OF SLOWING 

17th May 2010 - FITNESS CENTRES HIT BY TRIBUNAL DECISION ON MUSIC FEES 


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Asking a small favour
We hope that you value the news that we publish so while you're here can we ask for your support?

The news we publish at www.ausleisure.com.au is independent, credible (we hope) and free for you to access, with no pay walls and no annoying pop-up ads.

However, as an independent publisher, can we ask for you to support us by subscribing to the printed Australasian Leisure Management magazine - if you don't already do so.

Published bi-monthly since 1997, the printed Australasian Leisure Management differs from this website in that it publishes longer, in-depth and analytical features covering aquatics, attractions, entertainment, events, fitness, parks, recreation, sport, tourism and venues management.

Subscriptions cost just $90 a year.

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