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

Health Club Management

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UNITING THE WORLD OF FITNESS
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Health Club Management

Health Club Management

News

IHRSA 2014: Health clubs under threat from march of microgyms, says Ray Algar

Traditional health clubs offering a broad selection of activities at a mid-range price are at serious risk of having their business ‘salami-sliced’ away by specialised competitors.

That was the view of respected industry analyst Ray Algar during his address at the IHRSA Europe Congress in Amsterdam yesterday afternoon (17 October).

He said activity providers must decide whether they wish to pursue the path of low-cost self-service gyms, which have been a big success story in recent years, or go-down the path of offering a high-quality support structure for their clients - as found in the new wave of microgyms - if they are to thrive in a changing marketplace.

The mid-market gyms charging an average of £42 a month in the UK may find that small chunks of their members will be lost to low-cost competitors and microgyms specialising in the activities they most prefer - such as yoga, functional training or group cycling - until the business is no longer viable, Algar added. Approximately 120 private gyms are closing in the UK every year as their business model becomes no longer feasible, he lamented.

The new price points which are forming, Algar said, are approximately £16 per month maximum for a low-cost operator (slightly more in London), while microgyms are able to charge between £20-30 per hour session for the unique experience that they offer. He stated that the talented trainers are a key part of the high price point for microgyms, describing them as ‘rockstars’ who are vital to building loyal communities around new aspirational brands, such as Psycle and Soul Cycle, in a way mid-market gyms haven’t managed.

He highlighted this by citing a quote from Fitness First CEO Andrew Cosslett, who on joining the company from the hospitality industry noted: “The gym industry might be great at fitness, but it has never been very good at connecting with customers.”

In response to these new competitors, traditional mid market giants such as Fitness First and David Lloyd are piloting their own microgym brands, while some industry observers believe that embedding these boutique concepts within existing health clubs could preserve their status as the traditional centre of active lifestyles.

Algar pointed out that, as with the initial wave of microgyms, many of the entrepreneurs behind boutique clubs are arriving from outside the health and fitness industry, bringing new ways of thinking. Whichever path traditional gyms choose to take, he concluded, they will need to be clear in their approach and embrace innovation if they are to succeed.

The focus on the emergence of microgyms served as an apt precursor to Algar’s forthcoming report on the sector - which is expected to be released in December.

Health Club Management will be in attendance for the duration of the event and (WiFi permitting) will be live reporting on key developments via the HCM website.

A preview of the event can be found in the September edition of HCM magazine on pp.26-27.

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Traditional health clubs offering a broad selection of activities at a mid-range price are at serious risk of having their business ‘salami-sliced’ away by specialised competitors.
HAF,FIT,IND,EVT,PHR
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Gita Sjahrir

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We became the first boutique fitness brand in all of Southeast Asia to ever raise venture capital backing. This was positive for the industry as it signalled that the industry had growth potential
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News

IHRSA 2014: Health clubs under threat from march of microgyms, says Ray Algar

Traditional health clubs offering a broad selection of activities at a mid-range price are at serious risk of having their business ‘salami-sliced’ away by specialised competitors.

That was the view of respected industry analyst Ray Algar during his address at the IHRSA Europe Congress in Amsterdam yesterday afternoon (17 October).

He said activity providers must decide whether they wish to pursue the path of low-cost self-service gyms, which have been a big success story in recent years, or go-down the path of offering a high-quality support structure for their clients - as found in the new wave of microgyms - if they are to thrive in a changing marketplace.

The mid-market gyms charging an average of £42 a month in the UK may find that small chunks of their members will be lost to low-cost competitors and microgyms specialising in the activities they most prefer - such as yoga, functional training or group cycling - until the business is no longer viable, Algar added. Approximately 120 private gyms are closing in the UK every year as their business model becomes no longer feasible, he lamented.

The new price points which are forming, Algar said, are approximately £16 per month maximum for a low-cost operator (slightly more in London), while microgyms are able to charge between £20-30 per hour session for the unique experience that they offer. He stated that the talented trainers are a key part of the high price point for microgyms, describing them as ‘rockstars’ who are vital to building loyal communities around new aspirational brands, such as Psycle and Soul Cycle, in a way mid-market gyms haven’t managed.

He highlighted this by citing a quote from Fitness First CEO Andrew Cosslett, who on joining the company from the hospitality industry noted: “The gym industry might be great at fitness, but it has never been very good at connecting with customers.”

In response to these new competitors, traditional mid market giants such as Fitness First and David Lloyd are piloting their own microgym brands, while some industry observers believe that embedding these boutique concepts within existing health clubs could preserve their status as the traditional centre of active lifestyles.

Algar pointed out that, as with the initial wave of microgyms, many of the entrepreneurs behind boutique clubs are arriving from outside the health and fitness industry, bringing new ways of thinking. Whichever path traditional gyms choose to take, he concluded, they will need to be clear in their approach and embrace innovation if they are to succeed.

The focus on the emergence of microgyms served as an apt precursor to Algar’s forthcoming report on the sector - which is expected to be released in December.

Health Club Management will be in attendance for the duration of the event and (WiFi permitting) will be live reporting on key developments via the HCM website.

A preview of the event can be found in the September edition of HCM magazine on pp.26-27.

Sign up for FREE ezines & magazines
Traditional health clubs offering a broad selection of activities at a mid-range price are at serious risk of having their business ‘salami-sliced’ away by specialised competitors.
HAF,FIT,IND,EVT,PHR
934328_953695.jpg

News

Mid-market health club operator Total Fitness has acquired Pro-Fit Personal Training. The deal follows a
PureGym is set to become the second largest fitness operator in Europe, after revealing plans
The Glass House Retreat, a new eco-friendly health and wellness retreat, has opened in Bulphan,
A large-scale study on genetics has shown that being more physically active reduces the risk
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“We can include those yet to take the plunge into wearables,” says Myzone’s Dave Wright
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Pulse Fitness has installed a premium fitness facility at The University of Liverpool, fitting the space with its state-of-the-art equipment to appeal to staff and students alike
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HCM people

Rachael Blumberg

Platefit: creator and founder
People know yoga, Pilates, HIIT and Barry’s Bootcamp, but many don’t know vibration training and it’s my intention, passion and purpose to make it available and bring it to the world
People
HCM people

Gita Sjahrir

Founder, R-FITNESS
We became the first boutique fitness brand in all of Southeast Asia to ever raise venture capital backing. This was positive for the industry as it signalled that the industry had growth potential
People
My vision, based on my own personal experience, would be for physical activity to become the norm – not something you have to make an effort to do, but something you just go ‘yeah, that’s part of my everyday life’
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I was seeing a lot of bad pad work and poor teaching in gyms, which broke my heart but spurred me on to develop a dedicated course for boxing technique
People
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People
HCM people

José Teixeira

SC Fitness, Portugal: head of customer experience
People often assume that those who pay more stay longer, but we don’t see this. What we see is that if you have PT you stay longer because you use more, not because you pay more
People
We’re trying to help people understand exactly how much effort they need to apply in order to get the best outcome, so they can do it over a long period of time and not burn out. The overall training effect is then much better
People
Jimmy had the brilliant idea to put the logos of all of the current cycling brands in and around NYC onto a piece of paper and we handed it to the investor at the end of our presentation. Then we handed a blank piece of paper and referenced that this was the current number of cool fitness concepts in the world and how we would like the investor to help us fill that page. A day later he wrote us a cheque
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Rather than just being an outdoor fitness company, we felt we could evolve and adapt the business to become a dominating force in fitness generally
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Job search
POST YOUR JOB
Featured supplier news
Featured supplier: Harlands Effect: Make Your Business More Profitable
Harlands Group is a membership management service for health and fitness operators, which interacts directly with members to effectively manage membership payments.
Featured supplier news
Featured supplier: Who does your brand belong to?
Who does your brand belong to? There used to be only one answer to this question: the company that grew it and invested in it.
Company profiles
Company profile: Keiser UK Ltd
Keiser began its history of visionary sports science leadership over 40 years ago, rejecting the ...
Company profiles
Company profile: Xn Leisure Systems Ltd
Xn Leisure is a provider of cutting-edge health and fitness software, offering exceptional service to ...
Catalogue Gallery
Click on a catalogue to view it online
Directory
Audio visual
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Lockers/interior design
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Kemitron GmbH: Hydrotherapy / spa fragrances
Whole body cryotherapy
Zimmer MedizinSysteme GmbH / icelab: Whole body cryotherapy
Flooring
Total Vibration Solutions / TVS Sports Surfaces: Flooring
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Fitness software
Go Do.Fitness: Fitness software
Exercise equipment
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Diary dates
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Diary dates
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Diary dates
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Diary dates
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Diary dates
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Diary dates
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Diary dates
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Diary dates
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ExCeL London, London, United Kingdom
Diary dates
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Diary dates
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