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Fitness industry growth contained by market saturation and decline in discretionary income of consumers

Fitness industry growth contained by market saturation and decline in discretionary income of consumers
March 14, 2019

A decline in the discretionary income of Australians over the past three years has contained the expansion of the fitness industry growth while market saturation is anticipated to play a major part in slower revenue growth in the industry over the next five years.

As revealed by the latest IBISWorld’s latest Gyms and Fitness Centres - Australia Market Research Report, industry revenue has grown at an annualised 4.8% over the five years through to 2018/19 to $2.5 billion in value.

IBISWorld attribute that increasing health consciousness over this past five years, with consumers becoming more aware of the benefits of physical activity, as being a key driver of this growth. This has been fuelled by wider social trends, such as a growing audience for social media fitness models and ongoing promotions by governments.

It also identifies industry growth as being down to facilities being more affordable gyms, with budget 24/7 chains - with lower staffing costs - offering consumers cheaper memberships.

However, it anticipates industry growth to slow to 2.6% a year in the coming five years, due to market saturation.

The report advises “market saturation is anticipated to play a major part in the industry’s slower revenue growth over the next five years.

“Gym membership numbers are forecast to increase at a slower rate than they did over the past five years, as niche gyms catering to all segments of the population have already accessed most consumer markets. These gyms include full-service gyms, women-only gyms and budget 24-hour gyms. However, forecast strong discretionary income growth is anticipated to drive demand for premium gyms over the next five years.”

IBISWorld also suggests that “single-visit programs such as Medibank’s GymBetter will also potentially slow revenue growth, as infrequent users scale back their gym costs to pay smaller per-visit fees.”

Industry revenue is forecast to grow at an annualised 3.1% over the five years through 2023/24, to $2.9 billion.

Click here for more information on IBISWorld’s latest Gyms and Fitness Centres - Australia Market Research Report.

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29th January 2019 - Report suggests Fitness and Lifestyle Group buys CMG Asia for $200 million

13th December 2018 - Anytime Fitness reveals new design identity for Australian clubs

23rd November 2018 - Les Mills Asia Pacific names new Chief Executive

13th November 2018 - HIIT Factory plans 15 new franchised studios

18th October 2018 - Stock market launch for Club Lime owner Viva Leisure reflects positive fitness industry performance

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23rd July 2018 - Gold’s Gym International owner puts brand up for sale

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

8th April 2018 - IBISWorld shows that 24/7 budget gyms have transformed Australian fitness

12th August 2016 - Gymbetter scales back to three participants

11th February 2014 - IBISWorld predicts flat growth in fitness industry through 2014


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