This article is part of our special report on Business Transformation, which looks at how the pandemic has changed the world’s business world.
Like restaurants, retailers and other businesses that are usually open to the public in crowded places, the health and fitness industries in Europe are struggling to recover and get their business back on track – once they find out what their business is like will.
The multiple orders by health authorities to close health and fitness clubs have had a profound impact on the industry. Consulting firm Deloitte estimates that even with relatively brief closings, clubs in Europe have lost 15.4 percent of their members or more than 10 million people. Industry revenue fell nearly 33 percent as customers froze their accounts or requested refunds.
As the pandemic drags on, club managers are trying to fully understand how fundamentally Covid-19 changed their industry, which generated $ 96.7 billion in global sales in 2019.
“I’ve long believed that too many gym executives around the world assume they have the full and undivided attention of the exercising consumer,” said Ray Algar, a global business consultant and analyst for the fitness industry at Oxygen Consulting in Brighton . England. “That the gym is at the top of a hierarchy in the fitness industry.”
“The gym may once have had this temporary monopoly, but that is over and the pandemic has shown that consumers can find and enjoy a wide variety of gym replacement parts,” he said. “What the pandemic did made this replacement gym equipment more visible. So this represents a major turning point as this global industry has never been challenged to demonstrate its right to serve and support the practicing consumer. “
Stefan Ludwig, Deloitte partner and head of the Sports Business Group, said that the locks actually “had a significant impact on both consumer behavior and the offerings of the operators”.
A report from ClubIntel, a research and consulting firm, found that closed clubs caused many people to lose the habit of exercising regularly and prompted others to try alternatives such as biking, joining a hiking club, signing up for video classes (Dance and boxing are popular options) or buying an interactive device like a peloton or mirror.
Many customers, the report says, have chosen remote options offered by providers other than a health club. To retain or win back pre-pandemic customers, clubs need to expand these types of options and build a business model with diverse offerings such as on-demand and streaming video. Many have already started.
ClubIntel found that 27 percent of the 2,000 people who responded to an online survey said their fitness clubs were offering digital fitness during the Covid closings. that rose to 58 percent after the clubs reopened.
“Many stationary operators have quickly adapted their digital offers, and these are still crucial for success,” says Ludwig.
Updated
Oct. 18, 2021, 3:56 p.m. ET
Customers seem open to remote workouts. MindBody, a fitness software company, said 7 percent of customers surveyed in 2019 used live streaming workouts; during the pandemic, the number climbed to over 80 percent. While three-quarters of these clients said they intend to return to a club if possible, many added that they would continue with the virtual training as well.
“Digital offers are there to stay, but they will probably not replace traditional stationary services,” said Ludwig. “Operators are well advised to integrate a comprehensive digital experience into their offering while maintaining their on-site facilities.”
Tracking Covid-19 transmission rates, reconfiguring clubs, and creating coronavirus logs are important steps in restoring confidence that gyms are safe environments and convincing customers to return to gyms. “Industry efforts, particularly in Europe, have resulted in an encouraging response rate from members,” said Algar.
PureGym, Europe’s second largest gym brand with around 500 gyms in the UK, Denmark and Switzerland, recently announced that it had 1.6 million members as of the end of June 2021, roughly 94 percent of the June 2019 level.
However, fitness clubs cannot rely on what has worked in the past to be competitive. Clubs need to learn to pool different options provided in different ways, e.g. called.
European operators will find that a diversified approach is easier to take as governments in many countries have enacted corporate taxes and granted grants to cover payrolls and overheads to mitigate stationary club closings, Ludwig said. Only 1.4 percent of clubs in Europe have closed since March 2020, compared to about 25 percent in the US.
Similar support for US industry has been suggested. The Gym Mitigation and Survival Act would offer gym owners grants of up to $ 25 million. But the bill, which has 157 co-sponsors, including 27 Republicans, hasn’t been removed from the House of Representatives Small Business Committee.
Bankruptcies are also rarer in Europe than in the United States. Two US chains, 24 Hour Fitness USA and Gold’s Gym International, filed for bankruptcy protection in spring 2020. 24 Hour Fitness has closed more than 100 clubs, while Gold closed 30 prior to its takeover by RSG Group, owner of McFit, Germany’s largest fitness club operator.
Helen Durkin, executive vice president of public policy for the International Health, Racquet and Sportsclub Association, said it was difficult for fitness clubs to predict how radically the pandemic is changing the industry, “but the need to be omnichannel has long been talked about Time and some planned it. “
Ms. Durkin said Covid has accelerated innovation, pushing business owners to open more studios – that is, smaller locations devoted to a single discipline like yoga or Pilates – or to offer drop-in classes for customers after the session rather than after the session pay the month. “The industry is looking at different pricing models,” she said.
Some data shows that older health club members return to gyms and clubs faster. “When the gyms were closed, I would work out at home with light dumbbells, resistance bands, and YouTube videos, and take long walks,” said Gavin Hughes of London, who is over 50 years old. “But it wasn’t as good as the gym.”
He’s returned to a gym, but not the expensive gym he once belonged to in the financial district. He uses a cheaper one near his house in the East End, which allows him to go more often and afford a personal trainer.
Algar said the higher vaccination rates among baby boomers and the use of exercise to treat some age-related health problems could explain why older customers have returned to inpatient clubs faster than younger ones. But this also indicates a fundamental change in the clubs.
“Older adults are underrepresented in the global health and fitness club industry and that needs to change,” Algar said. “In the next 10 years there could be at least 1.4 billion adults over the age of 60, 30 percent more than now, without the number of adults under 34 increasing.
“Many older adults have the financial means and a compelling reason to exercise to enjoy the wonder of healthier, longer lives,” he said of the youth. “
