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The 'New' Segmented Health Club Market

Dru Hill
Dru Hill
Published on Mon, May 28, 2012

Has anyone else noticed how much the health club market has changed over the last couple of years?  Is it entirely driven by a reaction to the recession and high unemployment coupled with the availability of low cost franchise business models? This business opportunity could seem very appealing to someone with a redundancy pay cheque with the potential for lucrative rewards and low overheads after an initial outlay of security and fitness equipment (if purchasing). I was amazed to see that in many of the major international markets, USA, Australia, UK, France, Germany, Canada, South Africa etc that the industry is in growth when so many industries are currently in decline.  Coupled with the fact that a gym membership is a ‘nice to have’ item aka luxury good it just astounds me.  In the markets I have been observing there is a huge influx of the 24/7 low cost franchises and they appear to be launching into new countries and markets every month.  At the other end of the scale, I feel some mid sized full service gyms are looking at ways to differentiate themselves from the low overhead model and are going to the other extreme of becoming high end full service facilities at a premium price.  I believe there is definitely a market for both but for how long?

  • The low cost franchise model is achieving huge success but are they expanding too quickly?  Are they overcrowding the market and limiting their potential sales?  Geography will help your competitive edge, but without this one can’t purely compete on price.
  • Is their enough demand to support pricey full service health clubs?
  • The PT market has boomed lately with thousands of new graduates.  Will they continue to work within these facilities as contractors or will the bootcamp market take off and reduce the need for onsite facilities?
  • Where does this leave the mid sized mid tier gym with less than eight sites?  Do they need to pick a segment to join or can they find a way to co-exist?

  Whatever happens, I’m really interested to see how this market evolves over the next couple of years as the last two years have seen radical changes to the market make-up. Our philosophy at GymMaster is all about supporting our club owners so that they can support their members through the use of our software, hardware and tools. This is how we believe owners and club managers can maximise their member retention and increase conversion rates of new prospects.  We have a very hands on supportive approach and offer the full service. With the market segments changing we will need to regroup to look at how we can satisfy the low overhead franchise business model. I know our tools work for all segments within the fitness industry however we will need a change in mindset and engage with this clientele in a different way proving creative options for them to engage with their members via an automated sms or email rather than a phone call. Posted 28 May 2012