AusLeisure

Ongoing reporting on the fitness industry by market researchers from IBISWorld has been charting the dramatic growth in the popularity of 24/7 gyms during the past five years.

In a recent feature From strength to strength: Budget 24-hour gyms thriving, IBISWorld’ David Whytcross explained has explained how consumers have been switching their gym memberships to 24/7 establishments with companies like Anytime Australia, Jetts Fitness and Snap Fitness.

Whytcross writes “these gyms do not typically provide classes like their full-service counterparts, but do offer all-hours access, lower prices and more flexible membership plans. Full-service gyms are beginning to fight back against this fierce competition by reducing prices, offering more flexible contracts and providing special services. Overall, the gyms and fitness centres industry has grown by 3.3% over the past five years, following a strong recovery from the global financial crisis.

“The concept of 24/7 gyms is not new, but consumer preference for the price and convenience of these establishments has grown rapidly over the past five years. Although relatively new to the industry, 24/7 gym chains Anytime Fitness and Jetts Fitness have aggressively expanded their networks, and now have about 600 locations between them. “These types of gyms require less space than full-service gyms, as they do not offer classes, which means reduced rental costs and a greater number of suitable locations. Low wage costs, due to the facilities being unstaffed for some hours during the day, allow these gyms to reduce their prices even further.

“Strong growth in the number of 24/7 gyms has come at the expense of full-service gyms, causing the revenue and market share of major player Fitness First Australia to decline over the past five years. Although the business model of full-service gyms was previously successful, with long-term lock-in contracts and aggressive marketing strategies, consumers have now turned away from expensive memberships and facilities they do not need, in favour of basic, no-frills gyms.

“In response to this fierce competition, some full-service gyms have begun to engage in price wars with 24/7 gyms. Many full-service gyms now provide a range of contract options, with different durations and prices. These gyms still depend on high volumes of customers to remain viable, as they cannot compete with 24/7 gyms in terms of rent and wage costs. Full-service gyms are also employing other strategies to lure consumers back, like providing women-only training areas. While this strategy is not expected to affect 24/7 gyms, it may take market share away from women-only gyms like Fernwood Women’s Health Clubs and Curves.

“As competition between full-service and 24/7 gyms intensifies, an overall rise in the number of members will be offset by declining prices. This is expected to lead to a fall in industry revenue of 0.5% annualised over the next five years. In a highly saturated market with limited room to expand further, the continuing trend of consumers switching over to 24/7 budget gyms, or taking advantage of cheaper memberships due to the price war, will lead to a revenue contraction in the gyms and fitness centres industry.”

Click here to read David Whytcross’ report.

3rd December 2014 - REPORT IDENTIFIES GROWTH IN PERSONAL TRAINING LED BY RISING LEVELS OF HEALTH CONSCIOUSNESS

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

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.

Click here to subscribe.