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'Value for money' health club operators to 'thrive'
Value-for-money health club operators will thrive in Europe as economic uncertainty continues to unsettle the continent, claims FPDSavills.
At a presentation to over 150 principal lenders to the leisure industry, Andrew McGregor, head of commercial leisure at FPDSavills, said that despite September 11 and a continued flirtation with recession, future demand for health and fitness looks strong in what is still an immature European market.
In order to achieve further growth, McGregor believes that UK-based health club operators should look to Europe, where the market is approximately five years behind the UK. 'The European health and fitness sector is relatively unsophisticated, fragmented and cheap and there are currently very few chains other than independents acting in a local or regional market.'
FPDSavills says prospects for the UK remain positive as membership growth is predicted to increase year-on-year from about 3.8 million, today, to over five million within three years (from 7 per cent of the total population to around 10 per cent).
However, McGregor warned that operators should not rely purely on property solutions to supply this demand: 'While generic growth is difficult, due to the scarcity of good location with planning, operators must look at the existing capacity within clubs and increase density rates.
'Budget brands, offering smaller and often dry clubs (i.e. no pool), should however be able to capitalise on a new wave of in-town development where there is synergy with retail and residential schemes.'
As the whole of Europe remains uncertain about recession, consumers are more likely to trade down, not up, according to McGregor, who believes value-for-money brands are likely to flourish.