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UNITING THE WORLD OF FITNESS
Health Club Management

Health Club Management

features

Worldwide trends

What are the opportunities for refinement and growth in the global fitness sector in 2015?

By Kristen Walsh, IHRSA | Published in Health Club Handbook 2015 issue 1
Can mid-market clubs integrate elements of successful microgyms?
Can mid-market clubs integrate elements of successful microgyms?
As many as 90 per cent of the clients of studios also attend classes or have a membership at another club

‘‘While the economy continues to present challenges for many countries, European health club operators still see opportunities, and many of the region’s leading players are planning for continued growth.” This was the conclusion of Jay Ablondi, IHRSA’s executive vice president of global products, at the end of an IHRSA European Congress panel session featuring the CEOs from three of Europe’s leading health club companies. So what did the panel believe lies in store for the sector in 2015?

Growth opportunities
Valerie Bönström, CEO of women-only franchise Mrs.Sporty, pointed to the likelihood of continued growth in the budget sector. “The competition is increasing on the low-cost side, with more companies opening smaller, low-cost clubs,” she said, noting that budget trailblazer McFit continues to thrive. “In a market that’s increasingly price sensitive, higher-end operators will have to provide a more powerful brand with a strong positioning.”

Meanwhile Olav Thorstad, CEO of Scandinavian chain Health & Fitness Nordic – which operates the SATS, Elixia and Fresh Fitness brands – noted the importance of instructors when it comes to capitalising on the profitability of the functional training trend. “We also need to look at outdoor opportunities, because people don’t necessarily want to go to the club,” he added. “This segment of the market is growing more rapidly than the traditional club market. We have a big opportunity here, but we have to do more to catch the potential members who are interested in exercising outside of the four walls of our clubs.”

For Irina Kutina, CEO of the Russian Fitness Group, the focus will be on driving social connection. “We will continue to work closely with our personal training team, because it’s a good indication of how well the clubs are doing in terms of engaging members,” she said. “We’ll also look at small group training, yoga, cycling and so on, because these activities bring people together.”

Small is beautiful
All three panellists identified the boutique model as an important trend. In addition to the women-only Mrs.Sporty clubs, Bönström already operates some small, co-ed functional fitness training studios under the LOVFIT brand, and noted the potential of these clubs to attract new segments of the population who might not be interested in joining a more traditional gym.

“There’s a market for it and we should be in it,” agreed Thorstad. “The margins and profits are bigger, and it will be positive for members” – this thanks to a highly results-focused, member-centric, interactive and experiential formula.

When speaking with European Congress attendees, Alison O’Kane Giannaras, IHRSA’s associate vice president of international development, consistently heard views on the growth of this boutique model. “Mid-market and higher-end clubs are looking at the boutique models and trying to incorporate the concept into their existing model,” she says.

“The general consensus at the Congress was that the mid-market club is not dead, and that the growth in budget and boutique clubs is only making traditional clubs refine their value proposition – that there’s space in the market for all.”

According to delegates, one key to refining the value proposition will be a greater emphasis on staffing and the importance of human resources among the traditional mid-market health clubs. “As budget clubs continue to grow in number – with brand new offerings, equipment and concepts – a key element most are still missing is staff. The mid-market clubs are therefore increasingly realising the power a great staff member can have in retaining members,” says O’Kane Giannaras.

These predictions of the continued growth of the boutique sector are consistent with the findings of The IHRSA Health Club Consumer Report, published in September 2014 and looking in-depth at the US market, but with an eye to global trends: one of the most significant of its 11 overarching insights relates to the rise of new business models, particularly boutique clubs and fitness studios – specialising in barre, indoor cycling and CrossFit training, for example – and a movement away from the traditional multi-purpose model the industry has embraced for the past 20 years.

According to the report, more than 20 per cent of all members of multi-purpose clubs now hold more than one membership, and as many as 90 per cent of the clients of studios also attend classes or have a membership at another club. This trend could bode well for the industry in the months and years ahead: club operators might consider partnering with select niche studios to offer reciprocal discounts or joint memberships, for example, or even to trade client/marketing lists.

A new vision
The report also documents the decline in traditional fitness equipment use over recent years. The most frequently used items – treadmills, resistance machines and free weights – remain strong, but the data shows overall usage has decreased: in 2013, consumers used traditional equipment less than at any time in the past four years. Indeed, in some cases, use fell by as much as 20 per cent.

That’s not to say equipment has lost its importance: there’s still a greater share of members using equipment than there are participating in group exercise. However, operators whose business model is dependent on equipment may want to consider taking inventory of equipment use, and look at reintroducing members to how specific equipment can help them achieve their health and fitness goals. 

“This might be a symptom of the rise in boutiques or microgyms, which offer specialised training with activity-specific equipment,” suggests the report. It no doubt also has to do with the growing popularity of extreme exercise offerings that use unorthodox workout tools such as truck tyres and obstacle courses.

As Rick Caro, president of US-based consultancy Management Vision, concludes: “Clubs have an opportunity to ask themselves: ‘What do we want to be known for? What are our points of differentiation?’ They need to discover their strengths, capitalise on them, and make their strengths even stronger.”

FIND OUT MORE

Kristen Walsh is IHRSA’s associate publisher and can be contacted via email at [email protected]
Please visit www.ihrsa.org/research-reports to access 

The IHRSA Health Club Consumer Report, The IHRSA European Health Club Report, The IHRSA Global Report, and many other IHRSA publications.

Sign up here to get HCM's weekly ezine and every issue of HCM magazine free on digital.
Bönström has launched LOVFIT – co-ed functional fitness studios
Bönström has launched LOVFIT – co-ed functional fitness studios
20 per cent of full-service club members also use specialist studios
20 per cent of full-service club members also use specialist studios
The outdoor market is growing more rapidly than traditional gyms
The outdoor market is growing more rapidly than traditional gyms
Extreme exercise may be a factor in the falling use of traditional kit / photo: www.shutterstock.com/ glynnis jones
Extreme exercise may be a factor in the falling use of traditional kit / photo: www.shutterstock.com/ glynnis jones
Extreme exercise may be a factor in the falling use of traditional kit / photo: www.shutterstock.com/ glynnis jones
Extreme exercise may be a factor in the falling use of traditional kit / photo: www.shutterstock.com/ glynnis jones
https://www.leisureopportunities.co.uk/images/29161_22157.jpg
Insight into the trends and opportunities for growth of the sector over the coming months
KRISTEN WALSH, ASSOCIATE PUBLISHER, IHRSA ,IHRSA, Kristen Walsh, global trends, microgym, boutique, functional training, outdoor, extreme exercise
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As health clubs and gyms reopen following lockdowns, it is "absolutely crucial" operators take a ...
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IHRSA and Fitness Brasil say they have signed a partnership agreement that will see the ...
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EuropeActive has joined the All Policies for a Healthy Europe (APHE) initiative, as part of ...
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Featured supplier news: The Retention People unveil 2020 Member Experience Awards winners
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Supplier showcase - Fisikal
Catalogue Gallery
Click on a catalogue to view it online
Directory
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Zynk Design Consultants: Architects/designers
Whole body cryotherapy
Art of Cryo: Whole body cryotherapy
Management software
fibodo Limited: Management software
Uniforms
Service Sport: Uniforms
Exercise equipment
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Fitness equipment
Octane Fitness: Fitness equipment
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Skincare
Comfort Zone - Davines S.p.A: Skincare
Red Light Therapy
 Red Light Rising: Red Light Therapy
Property & Tenders
Hillingdon
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Diary dates
12 Jun 2021
Worldwide, Various,
Diary dates
13-14 Jun 2021
Online,
Diary dates
16-17 Jun 2021
ExCeL London, London, United Kingdom
Diary dates
01-04 Jul 2021
Expo Centre & Riviera di Rimini, Italy
Diary dates
18-19 Sep 2021
Locations worldwide,
Diary dates
21-24 Sep 2021
Messe Stuttgart, Germany
Diary dates
04-07 Nov 2021
Exhibition Centre , Cologne, Germany
Diary dates
01-07 Dec 2022
tbc, Dunedin, New Zealand
Diary dates

features

Worldwide trends

What are the opportunities for refinement and growth in the global fitness sector in 2015?

By Kristen Walsh, IHRSA | Published in Health Club Handbook 2015 issue 1
Can mid-market clubs integrate elements of successful microgyms?
Can mid-market clubs integrate elements of successful microgyms?
As many as 90 per cent of the clients of studios also attend classes or have a membership at another club

‘‘While the economy continues to present challenges for many countries, European health club operators still see opportunities, and many of the region’s leading players are planning for continued growth.” This was the conclusion of Jay Ablondi, IHRSA’s executive vice president of global products, at the end of an IHRSA European Congress panel session featuring the CEOs from three of Europe’s leading health club companies. So what did the panel believe lies in store for the sector in 2015?

Growth opportunities
Valerie Bönström, CEO of women-only franchise Mrs.Sporty, pointed to the likelihood of continued growth in the budget sector. “The competition is increasing on the low-cost side, with more companies opening smaller, low-cost clubs,” she said, noting that budget trailblazer McFit continues to thrive. “In a market that’s increasingly price sensitive, higher-end operators will have to provide a more powerful brand with a strong positioning.”

Meanwhile Olav Thorstad, CEO of Scandinavian chain Health & Fitness Nordic – which operates the SATS, Elixia and Fresh Fitness brands – noted the importance of instructors when it comes to capitalising on the profitability of the functional training trend. “We also need to look at outdoor opportunities, because people don’t necessarily want to go to the club,” he added. “This segment of the market is growing more rapidly than the traditional club market. We have a big opportunity here, but we have to do more to catch the potential members who are interested in exercising outside of the four walls of our clubs.”

For Irina Kutina, CEO of the Russian Fitness Group, the focus will be on driving social connection. “We will continue to work closely with our personal training team, because it’s a good indication of how well the clubs are doing in terms of engaging members,” she said. “We’ll also look at small group training, yoga, cycling and so on, because these activities bring people together.”

Small is beautiful
All three panellists identified the boutique model as an important trend. In addition to the women-only Mrs.Sporty clubs, Bönström already operates some small, co-ed functional fitness training studios under the LOVFIT brand, and noted the potential of these clubs to attract new segments of the population who might not be interested in joining a more traditional gym.

“There’s a market for it and we should be in it,” agreed Thorstad. “The margins and profits are bigger, and it will be positive for members” – this thanks to a highly results-focused, member-centric, interactive and experiential formula.

When speaking with European Congress attendees, Alison O’Kane Giannaras, IHRSA’s associate vice president of international development, consistently heard views on the growth of this boutique model. “Mid-market and higher-end clubs are looking at the boutique models and trying to incorporate the concept into their existing model,” she says.

“The general consensus at the Congress was that the mid-market club is not dead, and that the growth in budget and boutique clubs is only making traditional clubs refine their value proposition – that there’s space in the market for all.”

According to delegates, one key to refining the value proposition will be a greater emphasis on staffing and the importance of human resources among the traditional mid-market health clubs. “As budget clubs continue to grow in number – with brand new offerings, equipment and concepts – a key element most are still missing is staff. The mid-market clubs are therefore increasingly realising the power a great staff member can have in retaining members,” says O’Kane Giannaras.

These predictions of the continued growth of the boutique sector are consistent with the findings of The IHRSA Health Club Consumer Report, published in September 2014 and looking in-depth at the US market, but with an eye to global trends: one of the most significant of its 11 overarching insights relates to the rise of new business models, particularly boutique clubs and fitness studios – specialising in barre, indoor cycling and CrossFit training, for example – and a movement away from the traditional multi-purpose model the industry has embraced for the past 20 years.

According to the report, more than 20 per cent of all members of multi-purpose clubs now hold more than one membership, and as many as 90 per cent of the clients of studios also attend classes or have a membership at another club. This trend could bode well for the industry in the months and years ahead: club operators might consider partnering with select niche studios to offer reciprocal discounts or joint memberships, for example, or even to trade client/marketing lists.

A new vision
The report also documents the decline in traditional fitness equipment use over recent years. The most frequently used items – treadmills, resistance machines and free weights – remain strong, but the data shows overall usage has decreased: in 2013, consumers used traditional equipment less than at any time in the past four years. Indeed, in some cases, use fell by as much as 20 per cent.

That’s not to say equipment has lost its importance: there’s still a greater share of members using equipment than there are participating in group exercise. However, operators whose business model is dependent on equipment may want to consider taking inventory of equipment use, and look at reintroducing members to how specific equipment can help them achieve their health and fitness goals. 

“This might be a symptom of the rise in boutiques or microgyms, which offer specialised training with activity-specific equipment,” suggests the report. It no doubt also has to do with the growing popularity of extreme exercise offerings that use unorthodox workout tools such as truck tyres and obstacle courses.

As Rick Caro, president of US-based consultancy Management Vision, concludes: “Clubs have an opportunity to ask themselves: ‘What do we want to be known for? What are our points of differentiation?’ They need to discover their strengths, capitalise on them, and make their strengths even stronger.”

FIND OUT MORE

Kristen Walsh is IHRSA’s associate publisher and can be contacted via email at [email protected]
Please visit www.ihrsa.org/research-reports to access 

The IHRSA Health Club Consumer Report, The IHRSA European Health Club Report, The IHRSA Global Report, and many other IHRSA publications.

Sign up here to get HCM's weekly ezine and every issue of HCM magazine free on digital.
Bönström has launched LOVFIT – co-ed functional fitness studios
Bönström has launched LOVFIT – co-ed functional fitness studios
20 per cent of full-service club members also use specialist studios
20 per cent of full-service club members also use specialist studios
The outdoor market is growing more rapidly than traditional gyms
The outdoor market is growing more rapidly than traditional gyms
Extreme exercise may be a factor in the falling use of traditional kit / photo: www.shutterstock.com/ glynnis jones
Extreme exercise may be a factor in the falling use of traditional kit / photo: www.shutterstock.com/ glynnis jones
Extreme exercise may be a factor in the falling use of traditional kit / photo: www.shutterstock.com/ glynnis jones
Extreme exercise may be a factor in the falling use of traditional kit / photo: www.shutterstock.com/ glynnis jones
https://www.leisureopportunities.co.uk/images/29161_22157.jpg
Insight into the trends and opportunities for growth of the sector over the coming months
KRISTEN WALSH, ASSOCIATE PUBLISHER, IHRSA ,IHRSA, Kristen Walsh, global trends, microgym, boutique, functional training, outdoor, extreme exercise
Latest News
As health clubs and gyms reopen following lockdowns, it is "absolutely crucial" operators take a ...
Latest News
IHRSA and Fitness Brasil say they have signed a partnership agreement that will see the ...
Latest News
EuropeActive has joined the All Policies for a Healthy Europe (APHE) initiative, as part of ...
Latest News
Lack of exercise is a major cause of death from COVID-19, according to new research, ...
Latest News
World Leisure Organization (WLO) has opened the entry process for its International Innovation Prize. Now ...
Latest News
Health clubs, leisure centres and studios in England have opened today (12 April) for the ...
Latest News
A major new initiative will look to strengthen and unite the fitness industry's voice in ...
Latest News
A parliamentary report is calling for a £3bn intervention fund to build back better health ...
Latest News
Leisure centre operator Everyone Active has formed a partnership with WW (formerly called Weight Watchers), ...
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Adults suffering from chronic pain should be advised to take exercise, rather than be prescribed ...
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As health clubs and fitness studios in England are counting the hours down to reopening ...
Featured supplier news
Featured supplier news: The Retention People unveil 2020 Member Experience Awards winners
Member engagement software provider The Retention People (TRP) has unveiled the winners of its annual 2020 Member Experience Awards (MEA).
Featured supplier news
Featured supplier news: How Gympass reinvented wellbeing
Over the last year, fitness and wellness organisations have faced challenges like never before. When gyms closed and members needed alternative support to keep up their health and wellbeing routines, Gympass swiftly pivoted its business model to offer a wealth of digital solutions for its partners.
Company profiles
Company profile: TVS Group
The TVS Group supply and install sports and fitness flooring to a wide range of ...
Company profiles
Company profile: Physical Company Ltd
Physical Company provides specialist fitness solutions. This includes equipment, flooring, gym design, programming and training ...
Supplier Showcases
Supplier showcase - Fisikal
Catalogue Gallery
Click on a catalogue to view it online
Directory
Architects/designers
Zynk Design Consultants: Architects/designers
Whole body cryotherapy
Art of Cryo: Whole body cryotherapy
Management software
fibodo Limited: Management software
Uniforms
Service Sport: Uniforms
Exercise equipment
Matrix Fitness: Exercise equipment
Lockers/interior design
Fitlockers: Lockers/interior design
Fitness equipment
Octane Fitness: Fitness equipment
Hydrotherapy / spa fragrances
Kemitron GmbH: Hydrotherapy / spa fragrances
Skincare
Comfort Zone - Davines S.p.A: Skincare
Red Light Therapy
 Red Light Rising: Red Light Therapy
Property & Tenders
Hillingdon
Hillingdon Borough Council
Property & Tenders
Diary dates
12 Jun 2021
Worldwide, Various,
Diary dates
13-14 Jun 2021
Online,
Diary dates
16-17 Jun 2021
ExCeL London, London, United Kingdom
Diary dates
01-04 Jul 2021
Expo Centre & Riviera di Rimini, Italy
Diary dates
18-19 Sep 2021
Locations worldwide,
Diary dates
21-24 Sep 2021
Messe Stuttgart, Germany
Diary dates
04-07 Nov 2021
Exhibition Centre , Cologne, Germany
Diary dates
01-07 Dec 2022
tbc, Dunedin, New Zealand
Diary dates
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