Put simply, is there enough demand to justify the greater supply of boutique studios, 24/7 and women-only gyms and sweat factories catering to the elderly and the ‘gymtimidated’ alongside all the traditional gyms? Are these fresh models fit for the long haul or are many set to run out of legs?
Industry growth
Nutrition, skincare, exercise: the holy trinity of health and wellness. For exercise, the cathedral of choice has usually been the gym (or fitness centre or health club). And this sector is looking relatively healthy.
For example, two of the leading 24-hour gym franchises – Jetts Fitness and Anytime Fitness – have “undergone exceptional growth. And according to the Gyms and Fitness Centres - Australia Market Research Report,“they are attracting new customers with their affordability and accessibility.”
Changes and challenges
For many people though, finding the time and motivation to work out is challenging. For some, work and family commitments restrict access during regular business hours. Cost is a factor for others, not to forget a genuine fear for many: fear of being humiliated by just appearing and, worst of all, working out among a bunch of young and impossibly ripped bodies. Importantly, a recent decline in the discretionary income of Australians has limited the growth of the fitness industry, while market saturation is expected to slow revenue growth moving forward.
In some respects these challenges have been surmounted by the overall growth strategy of the gym industry in recent times. This new direction now offers many different and appealing options.
While budget gym chains and premium functional fitness gyms frequently offer personal trainers like the more traditional fitness clubs, they tend to offer fewer classes and generally operate with a more bare-bones staffing model that keeps costs low.
With fewer bells and whistles, budget and 24-hour gyms entice customers with four key advantages:
- Location
- Price
- Flexibility
- 24-hour access
Forecast
The more traditional ‘full service’ gyms that host lots of programs throughout the week still have plenty of legs. They have also tried to fight back against the 24-hour operators by offering improved prices and more flexible membership arrangements that do not require long-term commitments.
Traditional fitness centres are also hosting more mainstream workouts for older customers and those whose physical shape might have deterred them from working out in public.
Verdict
The fitness industry has undergone a healthy diversification and there is room for a broad mix of concepts. However, with the number of new gyms having grown faster than revenues, not all have survived or will survive. There may be a slowdown in growth and then a consolidation in their numbers over the next couple of years – particularly in some of the larger chains – until we get to a number that is right for the Australian market.
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