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UNITING THE WORLD OF FITNESS
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.

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
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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.

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

The UK government has extended the ban on commercial evictions until 25 March 2022. Announcing
Operating a further four weeks at reduced capacity will place serious pressure on English fitness
People experiencing homelessness are being offered free access to leisure centres by Oxford City Council.
IHRSA has appointed Elizabeth Clark as its new president and CEO. Clark joins the industry
Boutique studio operator TRIB3 has launched its own-brand range of luxury toiletries. The operator, which
Rainer Schaller's RSG Group is bringing its John Reed brand of health clubs to the
fibodo Limited
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L&R Kältetechnik has launched a new division, named artofcryo.com, after 30 years’ experience with -110
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While much of the fitness industry has reopened its doors across the UK over the past weeks, many members are yet to return.
Opinion: Re-engaging your post-lockdown absent members
Featured supplier news
Featured supplier news: First digital ecosystem for fitness equipment is launched after £300,000 funding boost
Orbit4 is the first digital ecosystem that manages and facilitates the entire commercial fitness product cycle.
Featured supplier news
Featured supplier news: Cryotherapy specialists, L&R Kältetechnik, launch new artofcryo.com division
L&R Kältetechnik has launched a new division, named artofcryo.com, after 30 years’ experience with -110 °C electrical solutions.
Featured operators news
Featured operator news: Everyone Active bolsters Everyone on Demand and enters second year with five new partnerships
Everyone Active has signed a number of new deals which will see the operator strengthen its digital product offering, Everyone on Demand.
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Award-winning leisure operator Everyone Active generated £342million in social value at its sites across the country in 2019/20.
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Company profile: TRIB3 International Ltd
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Catalogue Gallery
Click on a catalogue to view it online
Directory
Independent service & maintenance
Servicesport UK Limited: Independent service & maintenance
Trade associations
International SPA Association - iSPA: Trade associations
Red Light Therapy
 Red Light Rising: Red Light Therapy
Hydrotherapy / spa fragrances
Kemitron GmbH: Hydrotherapy / spa fragrances
Flooring
Total Vibration Solutions / TVS Sports Surfaces: Flooring
Whole body cryotherapy
Art of Cryo: Whole body cryotherapy
Architects/designers
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Exercise equipment
Power Plate: Exercise equipment
Lockers/interior design
Crown Sports Lockers: Lockers/interior design
Skincare
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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
28-29 Sep 2021
ExCeL London, London, United Kingdom
Diary dates
04-07 Nov 2021
Exhibition Centre , Cologne, Germany
Diary dates
01-07 Dec 2022
tbc, Dunedin, New Zealand
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CzechTourism
CzechTourism