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Great shape: Increasing health consciousness has boosted the popularity of gyms

Gyms-full-storyMany gym and fitness centre operators have capitalised on consumer trends towards wellness and health consciousness over the past five years. Two companies that have benefited greatly from these trends are Anytime Australia Pty Ltd (trading as Anytime Fitness) and Ardent Leisure Group (Goodlife Health Clubs). Both companies have achieved significant jumps in revenue over the past five years, despite adopting markedly different strategies. These varying approaches demonstrate that no one-size-fits-all strategy exists when it comes to generating revenue growth among gym and fitness centres.

Revenue for Anytime Fitness has grown substantially over the past five years, making it the largest player in the industry.  The company’s revenue growth has been based on providing low-cost, 24-hour, unstaffed gym facilities. Security initiatives such as after-hour entry passes and CCTV surveillance have enabled the company to reduce wage expenses, and these savings have been passed on to consumers through lower membership fees. The 24-hour business model holds great appeal for the increasing number of time-poor and cost-conscious consumers. This has been a major driver of the operator’s significant revenue growth over the past five years.

Goodlife Health Clubs has gained substantial market share over the past five years. Despite the growing popularity of unstaffed budget gyms, Goodlife has bucked the trend with its strategy of providing a more comprehensive product. Its offerings include value-added services, long-term lock-in contracts and high quality equipment. Its value-added services include group fitness classes, such as Pilates, yoga, body pump and cycle. These have enabled the company to distinguish itself from 24/7 budget gyms, and develop a reputation as a fitness centre that provides fitness classes catering to a wide range of individuals. Goodlife has also looked to grow its business further through various acquisitions. In 2012, it acquired Fenix Fitness Clubs, which had over 35,000 members and several Fitness First gyms in Victoria, South Australia and Queensland. It has since pursued this strategy further, acquiring Fitness First locations in Western Australia growing its national network to 76 health clubs.

Although many gym and fitness centre operators have experienced strong growth over the past five years, this trend is forecast to slow. Many consumers are anticipated to substitute expensive memberships, instead favouring budget gyms and fitness trends such as CrossFit. The appeal of cheaper, casual visits is expected to limit the amount of money consumers spend on gyms. As a result, industry revenue growth is forecast to slow over the five years through 2021-22, compared with the previous five year period. Despite the projected slowdown, opportunities for growth still exist, with fitness trends such as CrossFit continuing to gain popularity as health consciousness continues increasing over the next five years.

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Relevant companies:

Anytime Australia Pty Ltd

Ardent Leisure Group

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