Zimmer MedizinSysteme GmbH / icelab
Zimmer MedizinSysteme GmbH / icelab
Zimmer MedizinSysteme GmbH / icelab
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Health Club Management

Health Club Management

features

Expanding overseas

As the economy improves, will health and fitness operators start to eye new markets, bringing about the next wave of international expansion, or will they build on their current bases?

Published in Health Club Management 2014 issue 10

One year ago in this panel feature, we looked at how health and fitness brands could go global. At that point, however, the situation was not overly positive: Fitness First was the biggest global player but had sold off clubs in Benelux, France, Spain and Italy, as well as the UK. Few companies seemed to have ambitions to become big global players.

A year on, things have changed. The UK economy is growing again, house prices and consumer confidence are on the up and the health club industry appears to have toughed out the recession.

There’s certainly a buzz about, but will this translate into the next wave of international expansion for operators?

A number of chains have announced they are looking at opportunities overseas. After some tough times, Fitness First is growing again, especially in Asia. Virgin Active is also expanding across borders, and Holmes Place has announced it’s stepping up expansion in central Europe and the Iberian Peninsula; with 31 per cent of its membership now in continental Europe, the chain has designs on being the leading premium health club in the region.

Meanwhile, in the budget sector, easyGym says it’s setting its sights on countries where easyJet has a strong presence, leveraging brand recognition. It expects to have 200 gyms, and one million members, in multiple countries within the next six to seven years. And The Gym Group has also recently announced plans to expand into “Europe and beyond”, kicking off in 2015.

Is this a trend more operators will follow? Will more budget chains look for new markets for their concepts as the competition gets tougher in mature markets? Or will barriers such as local market knowledge and capital costs make players more conservative?

Where are the main areas of opportunity, and will all the operators be fighting over the same territories? How risky is an overseas development strategy, and what part might technology play in international expansion? We ask our panel of experts for their thoughts.

Are you looking to extend your operation overseas? Email us: [email protected]

Mark Hutcheon,

Director of communications,

Fitness First

Mark Hutcheon
Mark Hutcheon

“Many operators are already expanding overseas: if you have a solid base in one territory, it makes it easier to go into markets with parallels.

At the moment, a lot of places are ripe for expansion. Fitness First looks for sites with rising populations and rising incomes – because of this, we think there will be a wave of expansion on a city by city basis, rather than country by country. Delhi, Istanbul and Rio are currently looking like they can be future hotspots. If you get in early with a flexible model and competitive proposition, when the penetration rate is still only about 5 per cent, there are good opportunities for expansion.

However, the risks are high. Overseas expansion is not a quick buck: it’s a long-term proposition so plenty of capital, patience and above all integrity is essential to long-term success. Companies have to invest in service and standards – they can’t cut corners and must continually differentiate to meet consumer demand.

Going forward, Fitness First’s international expansion will be more about digital products and services, with differently priced online memberships that take our expertise beyond the gym to a potentially larger audience.”

John Kersh,

International Development,

Anytime Fitness

John Kersh
John Kersh

“I’m not sure we’re set for a rash of overseas development. Expansion across borders requires an immense amount of capital and the risk of failure is high. It’s difficult enough for fitness operators to stay relevant and successful within their own borders, much less when spread thin across multiple countries.

A major challenge when expanding is to not divert attention from domestic business, while also devoting adequate attention to localising the brand in new markets. Local competitors know the market much better than a foreign operator and can more easily exploit local opportunities. A foreign operator can run into unfortunate challenges by misreading the market or making mistakes with legal or financial assumptions.

Although we’re seeing lots of interest from the Middle East and Asia, the challenge in both regions is the very low awareness of the benefits of exercise and joining a health club.

I view these markets as a very long-term growth opportunity.

At least one Australian company is expanding into Europe now, and several Asian and Latin American companies are crossing borders within their own continents. A handful of American and British companies are dabbling with foreign expansion, although very few are making great strides.”

Paul Lorimer-Wing,

CEO,

easyGym

Paul Lorimer-Wing
Paul Lorimer-Wing

“Ithink we’re ready for the next wave of international expansion, especially in the low-cost sector. As the world gets wealthier, the spending power of the middle class gets stronger; and as the world gets less healthy, the awareness of good health grows. All this will fuel the appetite for health clubs.

I think there are strong opportunities all over the world, especially in emerging markets. Even though the US is the market leader, I still see many opportunities for growth there, as well as across Europe, in parts of Asia, Brazil and Mexico. South Africa has opportunities and Nigeria has a large economy. The Middle East is also a strong contender.

The strongest, most capital-rich companies will go out and exploit these opportunities. If you don’t have the capital capacity or the appetite for risk, you won’t stand a chance – all these opportunities come with risk.

The main threats are not understanding the market and not having a local partner. A copy and paste approach is not the path to success: adaptation is necessary.

Neither is it a ‘get rich quick’ situation – it will require significant commitment and dedication, and finding the right properties at the right price will be crucial.”

James Balfour,

CEO,

1Rebel

James Balfour
James Balfour

“For companies that have an appetite for risk, the emerging markets can offer a huge amount of growth going forward. Meanwhile, both at home and in mature markets, there’s the opportunity for a shake-up. However, I don’t think the industry is set for the next wave of international expansion, as a lot of the major operators are laden with debt and acting cautiously.

One of the risks of expansion overseas is that operators take their eye off their core assets at home, neglecting their ageing estates and failing to attract new members. It’s important for businesses to stay ahead of the game in all their businesses while they are pushing ahead with international expansion.

Various franchise operators are seeing continued overseas growth, as franchising offers speed to markets, and this is 1Rebel’s preferred route for overseas expansion. We will be launching an international franchise department to take advantage of growing demand from key international cities, but we’re still taking a conservative approach. We think 20 clubs over five years is appropriate. Our brand works best in transient markets where the population changes, so we will be looking at locations such as Hong Kong and Singapore.”

http://www.leisureopportunities.com/images/HCM2014_10talk.jpg
As the economy improves, will fitness operators eye new markets or consolidate their existing bases?
People
HCM people

Aaron Brooks-Thornett

Freely Given PT: founder
A donation-based payment system creates a non-discriminatory environment and empowers people to give what they think the service is worth. This also challenges me to keep service levels high
People
HCM people

Adala Bolto

Founder, ZADI Training
I saw the need to create a bespoke, female-specific and results-driven boutique offering that was on-trend as well as being sexy and backed by exercise science when it came to getting results
People
I don’t see any reason why we couldn’t double the size of our European portfolio of david lloyd clubs over the next four years
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features

Expanding overseas

As the economy improves, will health and fitness operators start to eye new markets, bringing about the next wave of international expansion, or will they build on their current bases?

Published in Health Club Management 2014 issue 10

One year ago in this panel feature, we looked at how health and fitness brands could go global. At that point, however, the situation was not overly positive: Fitness First was the biggest global player but had sold off clubs in Benelux, France, Spain and Italy, as well as the UK. Few companies seemed to have ambitions to become big global players.

A year on, things have changed. The UK economy is growing again, house prices and consumer confidence are on the up and the health club industry appears to have toughed out the recession.

There’s certainly a buzz about, but will this translate into the next wave of international expansion for operators?

A number of chains have announced they are looking at opportunities overseas. After some tough times, Fitness First is growing again, especially in Asia. Virgin Active is also expanding across borders, and Holmes Place has announced it’s stepping up expansion in central Europe and the Iberian Peninsula; with 31 per cent of its membership now in continental Europe, the chain has designs on being the leading premium health club in the region.

Meanwhile, in the budget sector, easyGym says it’s setting its sights on countries where easyJet has a strong presence, leveraging brand recognition. It expects to have 200 gyms, and one million members, in multiple countries within the next six to seven years. And The Gym Group has also recently announced plans to expand into “Europe and beyond”, kicking off in 2015.

Is this a trend more operators will follow? Will more budget chains look for new markets for their concepts as the competition gets tougher in mature markets? Or will barriers such as local market knowledge and capital costs make players more conservative?

Where are the main areas of opportunity, and will all the operators be fighting over the same territories? How risky is an overseas development strategy, and what part might technology play in international expansion? We ask our panel of experts for their thoughts.

Are you looking to extend your operation overseas? Email us: [email protected]

Mark Hutcheon,

Director of communications,

Fitness First

Mark Hutcheon
Mark Hutcheon

“Many operators are already expanding overseas: if you have a solid base in one territory, it makes it easier to go into markets with parallels.

At the moment, a lot of places are ripe for expansion. Fitness First looks for sites with rising populations and rising incomes – because of this, we think there will be a wave of expansion on a city by city basis, rather than country by country. Delhi, Istanbul and Rio are currently looking like they can be future hotspots. If you get in early with a flexible model and competitive proposition, when the penetration rate is still only about 5 per cent, there are good opportunities for expansion.

However, the risks are high. Overseas expansion is not a quick buck: it’s a long-term proposition so plenty of capital, patience and above all integrity is essential to long-term success. Companies have to invest in service and standards – they can’t cut corners and must continually differentiate to meet consumer demand.

Going forward, Fitness First’s international expansion will be more about digital products and services, with differently priced online memberships that take our expertise beyond the gym to a potentially larger audience.”

John Kersh,

International Development,

Anytime Fitness

John Kersh
John Kersh

“I’m not sure we’re set for a rash of overseas development. Expansion across borders requires an immense amount of capital and the risk of failure is high. It’s difficult enough for fitness operators to stay relevant and successful within their own borders, much less when spread thin across multiple countries.

A major challenge when expanding is to not divert attention from domestic business, while also devoting adequate attention to localising the brand in new markets. Local competitors know the market much better than a foreign operator and can more easily exploit local opportunities. A foreign operator can run into unfortunate challenges by misreading the market or making mistakes with legal or financial assumptions.

Although we’re seeing lots of interest from the Middle East and Asia, the challenge in both regions is the very low awareness of the benefits of exercise and joining a health club.

I view these markets as a very long-term growth opportunity.

At least one Australian company is expanding into Europe now, and several Asian and Latin American companies are crossing borders within their own continents. A handful of American and British companies are dabbling with foreign expansion, although very few are making great strides.”

Paul Lorimer-Wing,

CEO,

easyGym

Paul Lorimer-Wing
Paul Lorimer-Wing

“Ithink we’re ready for the next wave of international expansion, especially in the low-cost sector. As the world gets wealthier, the spending power of the middle class gets stronger; and as the world gets less healthy, the awareness of good health grows. All this will fuel the appetite for health clubs.

I think there are strong opportunities all over the world, especially in emerging markets. Even though the US is the market leader, I still see many opportunities for growth there, as well as across Europe, in parts of Asia, Brazil and Mexico. South Africa has opportunities and Nigeria has a large economy. The Middle East is also a strong contender.

The strongest, most capital-rich companies will go out and exploit these opportunities. If you don’t have the capital capacity or the appetite for risk, you won’t stand a chance – all these opportunities come with risk.

The main threats are not understanding the market and not having a local partner. A copy and paste approach is not the path to success: adaptation is necessary.

Neither is it a ‘get rich quick’ situation – it will require significant commitment and dedication, and finding the right properties at the right price will be crucial.”

James Balfour,

CEO,

1Rebel

James Balfour
James Balfour

“For companies that have an appetite for risk, the emerging markets can offer a huge amount of growth going forward. Meanwhile, both at home and in mature markets, there’s the opportunity for a shake-up. However, I don’t think the industry is set for the next wave of international expansion, as a lot of the major operators are laden with debt and acting cautiously.

One of the risks of expansion overseas is that operators take their eye off their core assets at home, neglecting their ageing estates and failing to attract new members. It’s important for businesses to stay ahead of the game in all their businesses while they are pushing ahead with international expansion.

Various franchise operators are seeing continued overseas growth, as franchising offers speed to markets, and this is 1Rebel’s preferred route for overseas expansion. We will be launching an international franchise department to take advantage of growing demand from key international cities, but we’re still taking a conservative approach. We think 20 clubs over five years is appropriate. Our brand works best in transient markets where the population changes, so we will be looking at locations such as Hong Kong and Singapore.”

http://www.leisureopportunities.com/images/HCM2014_10talk.jpg
As the economy improves, will fitness operators eye new markets or consolidate their existing bases?
Latest News
Mindfulness app provider, Headspace, is making a bid to support US-based healthcare professionals curb anxiety ...
Latest News
Nearly two thirds (64 per cent) of the world’s health and fitness clubs are currently ...
Latest News
Although the facts may seem less relevant now due to the coroavirus pandemic, new numbers ...
Latest News
Fitness professionals should use the coronavirus-induced lockdown – where possible – to enhance their knowledge ...
Latest News
The US government has passed a motion that will see gig workers, independent contractors and ...
Latest News
The physical activity sector is adapting to the difficult circumstances caused by COVID-19 (Coronavirus), according ...
Latest News
Joe Wicks, the personal trainer who has become a global star thanks to his daily ...
Latest News
Physical activity sector bodies have welcomed the government's measures to help the UK's self-employed workers ...
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Job search
POST YOUR JOB
Featured supplier news
Featured supplier: Incorpore and MoveGB ink groundbreaking partnership to transform corporate wellness offering
Incorpore and MoveGB have entered into a landmark partnership, combining the UK’s largest provider of corporate gym memberships with the nation’s biggest network of classes.
Featured supplier news
Featured supplier: The unmissable independent fitness event is back!
Pre-sale tickets are now available for the UK’s only event created exclusively for personal trainers, gym owners and fitness managers working in the independent gym and health club sector.
Opinion
promotion
The modern training gym champions functional fitness in a small group personal training model, with a premium service experience at its heart
Opinion: Overcome membership attrition with this surprising new industry trend: the modern training gym
Video Gallery
DFC: We do more...
DFC
DFC are a leading direct debit collection company, providing cash flow solutions to happy clients from all over the UK. Read more
More videos:
Company profiles
Company profile: Octane Fitness
A global innovator of high-performance fitness equipment, Octane Fitness, a Nautilus, Inc. brand, continually redefines ...
Company profiles
Company profile: Incorpore Limited
Incorpore Ltd is a leading fitness and wellness company which has been successfully delivering solutions ...
Catalogue Gallery
Click on a catalogue to view it online
Directory
Lockers/interior design
Fitlockers: Lockers/interior design
Management software
Fisikal: Management software
Wearable technology solutions
MyZone: Wearable technology solutions
Exercise equipment
Power Plate: Exercise equipment
Direct debit solutions
Debit Finance Collections: Direct debit solutions
Hydrotherapy / spa fragrances
Kemitron GmbH: Hydrotherapy / spa fragrances
Gym flooring
REGUPOL/Berleburger Schaumstoffwerk (BSW): Gym flooring
Skincare
Sothys: Skincare
Flooring
Total Vibration Solutions / TVS Sports Surfaces: Flooring
Fitness equipment
TRX Training: Fitness equipment
Property & Tenders
Greywell, Hampshire
Barnsgrove Health and Wellness Club
Property & Tenders
Derby City Council
Property & Tenders
Diary dates
19-24 Apr 2020
tbc, Beijing, China
Diary dates
04 Jun 2020
Marriott Forest of Arden Hotel & Country Club, Birmingham, United Kingdom
Diary dates
13 Jun 2020
Worldwide, Various,
Diary dates
17-18 Jun 2020
ExCeL London, London, United Kingdom
Diary dates
06-07 Jul 2020
Eastwood Hall, Nottingham, United Kingdom
Diary dates
21-24 Sep 2020
Loews Coronado Bay Resort, Coronado, United States
Diary dates
17-23 Oct 2020
Pinggu, Beijing, China
Diary dates
30-31 Oct 2020
NEC, Birmingham, United Kingdom
Diary dates
27-28 Nov 2020
Athena, Leicester, United Kingdom
Diary dates
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Zimmer MedizinSysteme GmbH / icelab
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