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Fitness faces challenging years

Fitness faces challenging years
February 26, 2014

The fitness industry is set to face a series of challenges in the coming years according to two recently published industry trends reports.

Contributing to EzyPay's Fitness Industry Trends 2014report, former club owner and fitness business coach Justin Tamsett fitness businesses suggests that "the next 12 months will be a challenging year around marketing and pricing (where) we will see a race to the bottom with prices for the majority of businesses.

"In an effort to gain more members, fitness businesses will continue to discount their memberships lower and lower to entice people to join.

"This is despite substantial research indicating price is not the primary reason why people stay or leave clubs.

"Simple maths ... would indicate that it is easier to get 10 members paying $25 per week rather than 25 members paying $10 per week.

"In this downward pricing spiralling world we will see some clubs at the other end of the paradigm offer high yield products and programs. The bundling of personal training, group training, online training, nutrition and more will mean $150+ per month programs will exist in facilities.

"It will also mean their clientele will expect to experience expert training, and not the 'vanilla' Certificate IV trained personal trainer.

"For the consumer who is focused on results, expert training and engaging experiences they will seek out these providers from their peers. Testimonials and word of mouth advertising will be essential for high yield businesses. The prospects will be looking at these businesses' marketing and need to see themselves in the images used or testimonial given and think, 'that person is like me. If they can do it, so can I'."

Writing in the IBISWorld industry report Gyms and Fitness Centres in Australia (report R9111, published in January 2014), researcher David Whytcross highlights the growth that has occurred in the fitness industry over the past five years.

Whytcross suggests that "industry growth has been largely stimulated by the advent of budget 24-hour gym chains, which have grown exponentially over the past five years as consumers have been attracted to their affordability and accessibility.

However, Whytcross fears that "market saturation is expected to contribute to an industry slowdown over the next five years, with revenue forecast to be worth $1.27 billion in 2018/19 following a 0.7% annualised decline.

"Consumers have abundant choices, including full-service gyms, women-only gyms and budget 24-hour gyms.

"Membership uptake is expected to fall as most consumer markets have already been tapped due to niche gyms catering to all pockets of the population.

"Further substitution from full-service gyms to cheaper 24-hour gyms is projected to cause revenue to drop. The revenue decline is expected to move slowly though, as an ageing population more habituated to the gym environment than previous generations drives demand for full-service gyms."

11th February 2014 - IBISWORLD PREDICTS FLAT GROWTH IN FITNESS INDUSTRY THROUGH 2014

5th September 2013 - FITNESS CLUB MEMBERSHIPS GROW BY MORE THAN 10% IN ONE YEAR

21st August 2013 - FITNESS CLUB MEMBERS PREFER EMAIL COMMUNICATION

31st July 2013 - FITNESS SURVEY REPORTS THAT 71% OF FITNESS CLUB MEMBERS ARE WOMEN

11th November 2011 - PLUMMER WARNS OF THE DANGERS OF LOW-COST FITNESS MEMBERSHIPS

5th November 2010 - 70% OF AUSTRALIAN WOMEN UNHAPPY WITH THEIR BODY SHAPE


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