Tim Batt Water Solutions are at the very forefront of the commercial aquatic business in Australia, with over 30 years specific experience supplying and installing chemical control and dosing…read more
Lower wage costs boost profitability of 24/7 gyms
The increase in the number of 24/7 gyms has driven substantial growth in the number of facilities operating within the fitness industry, which is forecast to rise at 6.4% annualised over the five years through 2015/16.
While predicting that market saturation will play a major part in the slowdown in revenue growth over the next five years through 2020/21, a new report from market research company IBISWorld charts how the structure of the industry has changed over the current decade.
A key factor in IBISWorld’s Great shape: The lower wage costs of budget 24-hour gyms have boosted profitability, explains how the lower staff costs of budget 24/7 gyms is reflected in the form of cheaper membership prices for consumers.
Predicting industry revenue growing at a compound annual rate of 3.5% over the five years through 2015/16, to reach $1.4 billion, the report (IBISWorld Industry Report R9111 Gyms and Fitness Centres in Australia) highlighs that “health consciousness has grown over the past five years, with consumers becoming more aware of the benefits of physical activity (and) this has benefitted the industry.
“Further industry growth has occurred through the expansion of more affordable gyms, which offset the effect of declining discretionary spending during the economic downturn.”
The report’s executive summary explains that “increasing market saturation and the continuing shift in consumer preferences towards cheaper 24-hour gym memberships are projected to result in more subdued revenue growth in 2015/16, at a forecast 2.1%.”
The report explains that the emergence of budget 24-hour gym chains has stimulated the majority of industry growth over the past five years, stating “franchises like Anytime Fitness and Jetts Fitness have grown exponentially over the past five years, attracting customers with their affordability and accessibility.
“Rising health awareness and high obesity levels have triggered further growth in gym memberships, although consumers are substituting their expensive full-service gym memberships for more affordable 24-hour gym memberships, which has restricted growth.”
In tandem with market saturation, IBISWorld expects revenue growth to also slow down over the five years through to 2020/21, suggesting “gym memberships are expected to grow at a slower rate as most consumer markets have already been tapped by niche gyms catering to all segments of the population.
“These include full-service gyms, women-only gyms and budget 24-hour gyms.
“Further consumer shifts from full-service gyms to cheaper 24-hour gyms are also projected to slow revenue growth, although this will be partially offset as the ageing population becomes more familiar with gyms and drives demand for full-service gyms.
“Single-visit programs like Medibank’s GymBetter also have the potential to slow revenue growth as infrequent users scale back their gym costs to pay smaller per-visit fees.”
Overall, IBISWorld forecast that industry revenue will grow at a compound annual rate of 1.5% over the five years through 2020/21, to reach $1.5 billion.
Click here for more information on the Great shape: The lower wage costs of budget 24-hour gyms have boosted profitability report (IBISWorld Industry Report R9111 Gyms and Fitness Centres in Australia).
Lower image courtesy of Jetts.
7th April 2016 - AIRACTIVE SHARING TECHNOLOGY LAUNCHED FOR EXERCISE CONSUMERS
24th March 2016 - ACTIVITY ENTREPRENEURS SHARE THEIR BUSINESS SECRETS
27th October 2015 - GLOBAL FITNESS CLUB REVENUES CONTINUE TO RISE
9th June 2015 - GLOBAL FITNESS CLUB INCOME REACHES US$84 BILLION
10th May 2015 - COUNTRY TOWN FITNESS FRANCHISE GETS THE BLUES
23rd February 2015 - AUSTRALIAN GYM MARKET TO REACH SATURATION WITHIN FIVE YEARS
28th January 2015 - EXERCISE TONES WOMEN’S MINDS AS WELL AS THEIR BODIES
22nd January 2015 - AUSTRALIANS SPENDING $8.5 BILLION ANNUALLY ON FITNESS
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.
The Complete Guide to Leisure Industry Products & Services.
Augmented Creative is an open organization of like-minded and highly dedicated, creative people who conceive, plan and execute visual solutions. We pursue new and innovative visual ideas to help…read more
Regupol Australia Pty Ltd offers a comprehensive range of recycled rubber fitness and leisure flooring surfaces. Their range of products include everroll rubber flooring, Regupol elastic…read more
Solarwise NSW / Dolphin Tech were the first and are the largest Dolphin dealer in NSW with a full service facility and full range of spare parts "on the shelf". We also provide on site…read more
Smart Connection Consultancy is a boutique sport and recreation consultancy who has become one of Australia’s leading advocates for the use of synthetic sports surfaces as a vehicle to grow…read more
Vticket Pty Ltd is the Australian and New Zealand distributor for Gateway Ticketing Systems Inc., the world leader in high-speed access control, admission control and ticketing software for the…read more
Goplay designs and manufactures specialised playground equipment for indoor play centres, hotels, food chains, clubs and resorts. If our years of experience and dedication have taught us one thing,…read more
get listed with our suppliers directory
Get your business noticed in our targeted directory. Viewed by 10,000 industry professionals per week!