12 May 2024 World leisure: news, training & property
 
 
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SELECTED ISSUE
Health Club Management
2014 issue 11

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Leisure Management - Ask the experts

2015 predictions

Ask the experts


As we gear up for 2015, what looks set to drive growth of the sector? What will be the challenges and opportunities over the coming 12 months, and how should we respond?

Kath Hudson
Way of the future: The Apple Watch marks an evolution in fitness and activity tracking

After a prolonged recession, 2014 has been brighter for most, with the economy finally turning a corner and both consumer confidence and the housing market picking up.

In the fitness industry, the low-cost sector had another strong year, growing 21 per cent according to the latest Mintel research. But will the improvement in the economy mean the affordable clubs will lose their appeal, with people trading up to more expensive brands? Not at all, according to CEO of The Gym Group John Treharne. “I would expect the market to at least double and for there to be some new entrants in 2015,” he says. “I think – as has happened in other markets such as airlines, hotels and retail – there will be more growth at the premium end but also significant growth at the low-cost end of the market.

“Research shows value for money is here to stay: people don’t automatically go for a more expensive brand in good economic times.”

Another feature of 2014 has been the growth of boutique clubs – the so-called microgyms – where members pay premium prices for a small, personal, high spec club that focuses on one discipline. Will we see new entrants into this sector? How will the products evolve and will more niches emerge?

The obesity crisis has never been far from the news headlines this year.

Despite health club penetration levels nudging up very slightly, the nation – and indeed the world – is getting fatter. Will we start to see some progress with this problem next year, with new ideas brought forward on how to effect behaviour change on a mass scale?

Last but definitely not least, on the back of growing consumer interest in wearable technology, the Apple Watch will go on sale in 2015. What impact will such products continue to have on the industry? Will tech-savvy consumers take workouts into their own hands, bypassing the expertise of gyms – and maybe even gyms themselves – or will operators learn to take advantage of the technology? We ask the experts....



Arron Williams Special projects Life Fitness

 

Arron Williams
 

“Last year we had 13.2 per cent penetration, which was deemed a good year – but this only represents 1.4 per cent growth since 2007, so the industry is relatively stagnant. The Turning the Tide of Inactivity report vividly highlights the extent of chronic disease and inactivity throughout the UK, which suggests the current model isn’t working and something has to change.

The most buoyant section of the market is the boutique gym sector. This is a very urban trend, but next year we might start to see them expand into the suburbs. So far we’ve identified 23 different types of boutique gym, in the main HIIT-based, highly functional, group exercise-based, social and communal. As this trend evolves, we’re likely to see more developments such as the fitness mall model, or the ‘multiple’ boutique model where health clubs are deconstructed and then reconstructed along the lines of a series of specialised packaged boutique gym offerings. With boutiques offering pay as you go and bulk buy, and low-cost clubs offering no contract memberships, the days of being a 12-month contract prisoner have all but gone.

I think club locations will change and, as retail struggles on the high street, we’ll start to see studios and boutique clubs move in, as is already happening in the US and Asia.”




Bryan O’Rourke CEO Integrus

 

Bryan O’Rourke
 

“It has been a robust 2014 and I think 2015 will continue in the same vein. Economic indicators suggest it will be a good year. I think memberships will continue to rise, with more formats, opportunities and content-based programming.

Several developed markets will see further consolidation: I predict a couple of blockbuster transactions in Europe, the US and Asia Pacific. We will see continued growth in India, Asia Pacific, Australia, the US and Eastern Europe, with Poland and Hungary in particular being active.

Digital technology will have an impact: there will be a proliferation of digital competitors related to advancements in wearable technology, apps and smartphone adaptations. This will put pressure on clubs to utilise the technology for payment and engagements. However, although the digital delivery model will grow, there’s no research to suggest this will negatively impact on the bricks and mortar participation.

There will be continued growth in niche format models, both boutiques and low-cost. However, I think we might see some middle-tier players tweak their business model to offer a bit of each, and some hybrid concepts will emerge which can offer a ‘best of both worlds, club within a club’ approach.”




David Minton Director The Leisure Database Company

 

David Minton
 

“Next year the industry is going to have to adapt or lose out. New technology is making the consumer more powerful and clubs are going to have to react. Innovations like the Apple Watch and the iPhone 6 with iOS 8 – which includes the new Health app – will become the most useful repository for all sorts of health and fitness data, with some collected automatically by the barometer inside the new phones.

Harvard has just released a report saying that US waistlines are getting even bigger. The UK is close behind and the industry needs to do something radical – like offering free PT to help people get results – if it’s to be taken seriously.

As the economy picks up, I think the growth of the low-cost sector will slow. People like to pay for a bit of comfort, luxury and broader facilities, otherwise everyone would stay at budget hotels. Microgyms are adding value to the industry with a good product and these will continue to grow as people value unique experiences. However, the biggest growth will come from the public sector, which is embedded in the community and puts the customer first in a way that private sector clubs cannot. Usage of public sector facilities is going up enormously: the top seven operators had almost 100 million visits last year.”




Dave Stalker CEO ukactive

 

Dave Stalker
 

“In 2015, wearable technology will get a hot Apple injection, as the Apple Watch heralds the start of the next evolution in fitness and activity tracking.

The major private institutions on which the industry grew in the 1990s will either have to rediscover a purpose, as we have seen with Fitness First, or drift off into irrelevance. Driven by efficiency drives, enhanced service levels and greater competition, the public sector will continue to thrive and drive growth. The pressure of continuous growth in the low-cost sector will be joined by the imperative to retain, or else implode. Meanwhile the proliferation of specialist microgyms will continue to explode, charging fees previously only dreamt of by mainstream operators. Within the health community, stakeholders will get even harsher in their appraisals of what we offer: show them your evidence or they’ll show you the door, for both leisure and health contracts.

Finally, health clubs, leisure centres and activity providers are now part of a wider ecosystem trying to get the world fit and healthy. Embracing this position, and understanding our role within it, will enable us to dramatically redefine the value and impact of our sector, with a continued growth in our sector’s importance to all stakeholders as a result.”



Originally published in Health Club Management 2014 issue 11

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