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News, views and adventures from The Leisure Database Company team.
Ground-breaking technology like Artificial Intelligence and Machine Learning is way ahead of fitness industry practices, desires and dreams. The main reason being many fitness sites currently lack the granular data and infrastructure necessary to obtain real AI.
This means our industry is looking through the rear-view mirror on where it’s been, not where it’s going. This is of no use to the consumer and limited use to the operator.
Read MoreYesterday David attended the World Indoor Climbing Summit in Sofia, Bulgaria. Held at the impressive Sofia Tech Park, the event aims to gather members of the climbing community from all over the world.
David was invited to discuss the UK Fitness market and how the climbing industry can learn from it. He joined a panel with Ivaylo Penchev (Walltopia), Doug Miller (Sales Makers) and Per-Anders Dagborn (Sports Club Vallentuna).
Read MoreBryan and David, together in Bologna, Italy, for the 20th anniversary of ForumClub, comment upon that country's place in the fitness landscape, where work-life balance is key, and where big companies like TechnoGym call home.
Read MoreThe September infographic is out in Gym Owner Monthly & WorkOut magazines.
Read MoreAs an estimated 80 per cent of CV equipment will be able to link up to Apple’s GymKit within a few years, the future will be all about data. Rather than threaten the role of the PT on the gym floor, I think data driven equipment will have the opposite effect and people will need more help, advice and reassurance on how to interpret it most efficiently. And, just as the car industry is having to adapt to the presence of electric cars, the fitness industry will also adapt. It will be more software than equipment led. With Apple, the largest tech company in the world, moving into our space and making it a data game, people’s perceptions of exercise will change. The gym is likely to be incorporated into everyday wellness habits like walking and climbing stairs. Data will give PTs the opportunity to get more involved with their clients between sessions, give personal push notifications, see what their clients are doing when not at the gym and praise them. This innovation will also involve more people from different levels of society, as one of the reasons why lower income groups don’t engage is because they often don’t know where to start. Operators will be forced to adapt, because their clients will adapt, but they should embrace the change.
David Minton
Original Source: Health Club Management - issue January 2018, pg. 37
Article in MoneyWeek by Alice Gråhns
Modern living has turned us into overweight, inactive couch potatoes. There’s an app for that, says Alice Gråhns – and an opportunity to profit for smart investors.
Once upon a time, hard, regular physical exercise was part and parcel of our daily existence, rather than an optional extra we fitted in in our spare time. From ancient times until really fairly recently, our ancestors didn’t need expensive gym facilities to stay in shape. From hunter-gathers to farm labourers to industrial workers, a combination of physically demanding manual work, walking rather than driving, and a daily calorie intake restricted by necessity rather than choice, kept us active (if not always healthy). It’s little surprise that many of us struggle to keep fit in the modern era of sedentary jobs, widespread car ownership, and virtually limitless opportunities to snack.
This has created a burgeoning boom in businesses dedicated to keeping us healthy. In 2006, 13% of adults in England took part in regular fitness activities. By last year, this had risen to 16%. Today, one in every seven people in the UK is a member of a gym, and ever more are signing up. In the year to the end of March 2017, overall UK gym membership numbers grew by 5.1% (6.3% in terms of value), according to the 2017 State of the UK Fitness Industry Report by health and fitness consultancy LeisureDB. Meanwhile, the sector has grown globally from being worth $67bn in 2009 to $83bn last year. And it’s not just about going to the gym. Every aspect of the fitness industry – from sports centres to healthy foods to tracking technology and even “activewear” – is expanding rapidly. People don’t just care about what they do with their bodies, but also about what they put in them and on them.
Indeed, says David Minton, founder of LeisureDB, the industry is entering a golden age. Individuals are increasingly aware of the need to look after themselves, helped both by public health campaigns and (in the UK) the ongoing post-2012 Olympics “halo” effect. Meanwhile, fitness facilities are ever more widespread and of higher quality, customer service is improving, and gym membership is becoming more affordable, says Steven Ward, chief executive at UK Active. While the 16- to 34-year-old demographic is the key target market (young consumers generally are), the older generation is also increasingly interested in getting into shape.
Then there’s the expanding role the government sees for the industry. We wrote about the obesity epidemic a few months ago in MoneyWeek, but increasingly there’s a new public health enemy number one – inactivity. Physical inactivity is the largest cause of premature mortality globally, according to the World Health Organisation. Nearly 13 million people in the UK are classed as physically inactive, meaning they fail to rack up at least 30 minutes of physical activity per week. The fitness industry can only benefit from government efforts to tackle that. Indeed, all of those inactive adults represent a significant growth opportunity.
As demand has grown, the range of options for keeping fit has widened considerably. These days, in most British cities, you’ll see a fitness centre on every other street corner – be it a low-cost gym, a boutique gym or an expensive health club with fancier facilities. Much of the industry’s growth is arising at the budget end of the market. There are now more than 500 low-cost clubs (defined as those charging less than £20 a month), accounting for 15% of the market value and more than a third of total membership. Beyond offering keen pricing, budget chains attract customers by offering 24-hour access (so you can work out around your working day) and freedom from annual contracts.
These budget gyms often appeal to first-timers who, as they become fitter, may work their way up the market, says Minton. Boutique gyms are smaller and more exclusive than low-cost gyms, and tend to focus on one specific area of fitness. Alternatively, health clubs are larger and more anonymous, but usually have the most extensive facilities, with spas and swimming pools. But whatever the entry level, the two key staples of the fitness industry are gym sessions (people working out individually) and fitness classes (exercising as a group), says Lisa O’Keefe, director of insight at Sport England. Almost 4.5 million people do gym sessions regularly and 1.6 million people take fitness classes. Men generally tend to stick to weightlifting, while women typically favour group workouts, says O’Keefe. This is a trend that has become more apparent fairly recently, helped partly by the high profile of female athletes at the London Olympics in 2012.
The industry itself – not unlike the fashion business – is very good at creating and responding to demand, generating an ongoing stream of new classes to capture fickle consumers’ imaginations. A couple of years ago, Zumba was the “in” exercise. Today, CrossFit, yoga and innovative spinning (cycling on the spot) classes have taken over. Even nightclubs have joined in – they provide exercise classes during the day and put the gym equipment away for the night.
Interest in healthy eating is booming too. And you don’t have to be an ardent gym bunny to care about watching what you eat. For example, the UK market for organic food is now worth nearly £2.1bn, and is growing strongly – total sales of organic food grew by 7.1% last year, according to the Soil Association, while non-organic sales fell. A growing number of companies now provide healthy meal and nutrition plans delivered direct to your door.
However, above and beyond those who desire a more healthy diet, there’s a growing appetite for supplements and specialist foods aimed specifically at gym fanatics, bodybuilders, professional athletes and enthusiastic amateurs: everything from so-called “superfoods” packed with vitamins and antioxidants to protein shakes. It’s fair to say that the scientific benefits of many of these supplements are the subject of debate and others are simply soft drinks repackaged as “lifestyle” brands. Yet demand for these products is growing just as, if not more, rapidly than the market for organic food. The global sports nutrition market is already worth nearly $30bn and it’s expected to grow at an annual rate of around 8.1% for the next five years, to reach a value of $45.27bn by 2022.
The growing cult of the body – with everyone from celebrities to fitness bloggers to “ordinary” people given to posting snapshots of their “rock-hard abs” on social media – has also fuelled a desire to look good in workout gear. Scruffy tracksuit bottoms won’t cut it in your high-end boutique gym, leading to a rapidly growing market for athletic products and apparel. Increasingly that trend is spilling out into the high street. Sportswear is not just for exercise. Indeed, many people who wouldn’t go to the gym if you paid them will nevertheless snap up expensive “athleisure” gear. According to GlobalData, growth in the sportswear sector is set to outpace the total UK clothing market this year, which itself is expected to grow by 2.1%.
Indeed, the fashion trend is so popular that many wonder how long its vertiginous rise can be sustained. However, investors can relax – even if UK consumers start to find new fashions, the global trend remains robust, driven partly by growth in China. In fact, global athletic wear sales are expected to increase by nearly 20% by 2021, to $355bn from $290bn currently, according to analysts at Morgan Stanley. This can be attributed to the increasing number of luxury fashion designers turning their eye to sportswear. Stella McCartney designed the Team GB kit for the 2012 Olympics, and since then both Chanel and Dior have released couture trainers, while Alexander Wang launched an athletics range for H&M. The activewear trend has, of course, also boosted sports brands such as Nike and Adidas.
Another growing obsession – both in terms of physical health and the wider self-help movement – is the drive for relentless self-improvement via the formation of healthy habits. This usually involves keeping some sort of record of your activities, which in turn has increased demand for devices that can track what you do – and nag you gently (or not so gently) when you fail to achieve your daily targets.
The chances are that you already have such a device – or at the very least, your smartphone has the capability to act as a fitness tracker if you download the right app. Technology is disrupting most businesses on the planet and the fitness industry is no exception. Wearable devices – from phones to smartwatches to simple wristbands – mean that you can now easily track how far you’ve run, what speed you’ve been going at, and how many calories you’ve burned. And a few days after your run, you’ll get an electronic reminder that you found 7.30pm on Tuesday evening to be a convenient time for a workout – don’t you think that now is the ideal time for another one?
This ability to track our progress and to adjust our exercise patterns accordingly has in turn fuelled even more demand for yet more data and analysis. As a result, the global wearables sector is expected to rocket in value from $23bn last year to $173bn in 2020, according to global analyst MarketsandMarkets.
The disruption caused by technology in the fitness industry isn’t all about wearable technology. The software at the back-end of a fitness centre is just as important – whether it be a booking system, a management tool for members’ access to the facility, or an automated sales system. In the future, these customer-relationship management (CRM) systems will undergo major changes as artificial intelligence becomes increasingly popular, reckons Minton.
The goal of any fitness services provider is ultimately to make the process more seamless – the fewer hurdles there are between a customer joining the gym and following through on their good intentions to use it, the more profitable the gym is likely to be. Artificial intelligence will help to personalise membership for each customer – your gym’s software will learn what type of activity you like, and send personalised “push notifications”, informing you of upcoming classes you might enjoy and offering to book you in for a session. Just as wearables already know your preferences, so your local gym will too.
If you want to invest in the growth of the fitness market, US-based Planet Fitness (NYSE: PLNT) is one of the largest and fastest-growing gym chains in the world, with around seven million members. The company’s quarterly revenue has climbed 12.1% year over year to $97.5m, but unfortunately, that rapid growth appears to be thoroughly priced in after the share price surged following the strong results – it now trades on a steep price/earnings (p/e) ratio of 45. An alternative UK-based option is the low-cost fitness chain The Gym Group (LSE: GYM). The company has 95 gyms in the UK and plans to open another 20. It’s growing fast too – it saw revenue rise by 18.8% to £42.8m in the six months to June 30 – but trades on a slightly less eye-watering forward p/e of below 30, which is just about reasonable (though still not cheap) given the growth rate.
On the dieting side, there are several big US firms that produce diet plans and low-calorie foods, including Weight Watchers and Medifast. Ever so slightly cheaper than either of those – on a forward p/e of around 25 – is Nutrisystem (Nasdaq: NTRI). Brokers are targeting an average price of around $70 a share for the stock, compared with its current level of just below $50. Another option you may be considering is supplements provider Herbalife, given its p/e of 14. However, we’d be wary of this one – Herbalife is a consistent short-selling target, and while it has thwarted the shorts so far (notably hedge-fund manager Bill Ackman), we wouldn’t risk investing without doing detailed due diligence first.
A key brand to keep an eye on in the activewear sector is Adidas (Frankfurt: ADS). In North America, sales jumped 31% in the last quarter, topping $1bn in the region at a time when Adidas’s two biggest rivals, Nike and Under Armour, have struggled to keep sales up on their home turf. On a p/e of 28, it’s not cheap, but of the big brands it currently looks the best option. A less obvious bet is Lululemon Athletica (Nasdaq: LULU). The upmarket yoga and fitness gear company has struggled amid concerns over potential competition from Amazon and Nike, but continues to expand both internationally and in other areas, such as men’s clothing.
On the tech side, one option is Mindbody (Nasdaq: MB). This $1.5bn firm provides cloud-based business-management software and payment systems for “the wellness services industry”, and offers an app designed to help users find and book exercise classes. It doesn’t yet make a profit, so it’s risky, but revenues are growing fast.
David will be presenting his thoughts on the UK Fitness Industry in Tokyo, Japan this week. On his return to London, David will be speaking at the opening of the 2017 IHRSA European Congress.
His agenda is as follows:
IHRSA Opening Keynote - The State of the UK Fitness Market lead by David Minton...
The UK is unique in auditing the fitness industry in granular detail each year. The Leisure Database Company has developed a consistent methodology for the industry and built a database now used by operators, suppliers and financiers to the industry. You will receive highlights from the annual State of the UK Fitness Industry Report, which includes trend analysis, growth in number of gyms, members, value of the industry and the penetration rate, which reached 14.9% in 2017. David believes the UK is beginning the golden age of fitness and will share his projections of growth leading to 2020.
In the July Issue of Health Club Management, the IHRSA 2017 Global Report findings were published including statistics from the LeisureDB 2017 State of the UK Fitness Industry Report...
"In the UK, based on research by LeisureDB, 9.7 million people belong to a private corporate health club, up from 9.3 million a year ago. Approximately 6,728 facilities in the UK generate a collective US$6.1 billion in industry revenue. Germany attracts more than 10 million members to 8,600 facilities and generates US$5.6 billion in revenue."
Original Source: Health Club Management
** The 2017 State of the UK Fitness Industry Report can be downloaded via the link **
The 2017 State of the UK Fitness Industry Report reveals that the UK health and fitness industry is continuing to grow. This growth is being primarily driven from the private sector, which has more clubs, more members and a greater market value than ever before.
There are now over 9.7 million fitness members in the UK which has boosted the penetration rate to an all-time high of 14.9%. 1 in every 7 people in the UK is a member of a gym.
Read MoreIn this weeks 60 Second News; today sees the launch of our first ever LeisureDB Social Media Fitness Index. The report covers quarter 1 of 2016 and compares the UK's top 20 private fitness brands and ranks them based on their performance on Facebook, Twitter, Instagram and YouTube. You can download your copy of the report from our website now for £195 + VAT.
SLM or Everyone Active as they’re better known was announced this week as the new management of Westminster Sports Centre from the 1st July 2016. The 10 year contract will see SLM manage 8 leisure centres.
Frome Sports and Fitness Centre, which is managed by Fusion, opened its doors on Wednesday following their £2million refurbishment. The centre boasts new gym equipment, a large soft play area, new classes in their two new studios and a dedicated cycling studio.
Lastly, we would just like to say congratulations to The Gym Group who have been awarded the Investors in People Gold Accreditation, which is currently achieved by just 7% of organisations.
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In this weeks 60 second news: it was reported that Pure Gym’s membership figures have risen by over 50% since they took over the LA Fitness clubs last year. From this Monday, 16th May you’ll be able to see how this compares with the rest of the market when we release the 2016 State of The UK Fitness Industry Report. For more information on what’s covered in this year’s report look out for our press release or head to leisuredb.com.
On Wednesday Sweat Coin was released into the UK Apple App Store. The app converting exercise to a digital currency known as ‘sweatcoins’ which can exchange steps for rewards or even charity donations. Although we haven’t been blown away by the app we do think it has potential.
Lastly, FitGroupUK, a new body consisting of group exercise opinion leaders has been brought together with the ultimate aim of introducing more people to group exercise, given that participation figures plateaued in recent years. Here at LeisureDB we want to know what is your favourite group exercise class and why? Tweet us @TLDC_UK to join the conversation.
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In this weeks 60 Second News; here at the LeisureDB headquarters we’re busy putting together our annual state of the industry reports. This year’s fitness report includes a new top operator in the private sector and is due to be published late April. Head to the publications section of our website to receive a notification when our reports are published.
After attending IHRSA last month our director, David Minton, will be attending FIBO in Germany this month. With more than 725 exhibitors from 40 countries there is everything from equipment suppliers to studio concepts and IT systems. If you’re one of the 138,000 people attending don’t forget to say hi if you see him.
Fitness First UK’s managing director, Martin Seibold, has reported a significant amount of interest in the chain from both investors and buyers. The number of clubs has gone from 185 to just 65 since Seibold took over in 2012, but membership has grown by 15% since May 2015. Fitness First Owner Oaktree Capital Management has said all possibilities remain on the table for the future of the company.
Lastly, Fit4Less in Derbyshire has come under criticism this month after an anti-bullying charity called its new ad ‘offensive’. The billboard poster showed Aliens abducting a person with the text ‘they’ll take the fat ones first’. Fit4Less said it wanted to create a “light hearted and humorous” ad. This isn’t the first time an industry ad has sparked controversy. Last year Protein World were called offensive and irresponsible with its ‘beach body ready?’ poster. We want to know whether you were offended by these ads? Send us a tweet to @TLDC_UK and use #AdvertWin or #AdvertFail to let us know your views.
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David Minton, Director of LeisureDB, is a widely sought after mentor and consultant for a range of health and fitness organisations with his extensive industry knowledge and here are his top 10 predictions for 2016.
1. The number of people who are overweight will continue to rise. An opportunity for the industry to provide an alternative to the harmful fat, sugar and salt consumed by the majority?
2. British Heart Foundation research found 75% of Brits are unaware of the recommended minimum amount of physical activity. Current guidelines are too complicated so nothing will change in 2016.
3. Following the successful Initial Public Offering by The Gym Group last November, London Stock Exchange share price is 234, up from initial offering of 189. Very good news for the industry and a second IPO should follow in 2016.
4. In 2016 the top two fitness brands by number of sites will be Pure Gym and, in the public sector GLL’s Better.
5. Low cost brands will take 30% of the private sector membership, up from 24%.
6. 2016 will be the year of aggregators, bloggers, unboxing channels, trackers, wearables and an app for everything that targets the fitness consumer. Woe betide any brand that doesn’t react.
7. Real-time transparent data on timetables, bookings and smooth payments will be king in 2016. Pdf’s, telephone bookings and credit cards are dead or dying.
8. Any brand that does not use social media as its main form of communication with the consumer will lose market share. Watch out for the launch of LeisureDB’s Social Media Index in 2016.
9. Brazil will have the host nation advantage at this year’s summer Olympics and so should jump from 22nd in the medal table in 2012 to ……. 12th!? Best of luck to all the athletes.
10. And it’s good bye to LA Fitness, a once great brand who never really recovered from the social media nightmare in 2012.
In this weeks 60 second news; It's been announced that Fitness First has sold its founding site in Bournemouth. The Queen’s Park Health Club has been bought by BH Live for an undisclosed sum will now be known as BH Live Active. Jatomi Fitness CEO Tracey Gehlan, who moved in the industry April last year from Burger King, believes the Fitness Industry needs to learn from the fast food Sector and start engaging children rather than making them wait until they’re 18 for a gym membership. Part of McDonald’s success is that every three year old in the country has heard of them, the fitness industry needs to think of a way it can include the younger generations. Could it be through creating the Ultimate Selfie? Ian Pearson a futurologist, commission by Fitness First claims that by 2046 we will be exercising with performance recording drone-swarms. It could improve technique and allow for video streaming. Further technology advances could allow us to spar with a robot opponent and run the marathon with Mo Farah. Lastly, our director David Minton will be making his industry predictions for 2016 keep an eye on our blog to find out who he believes will be the largest fitness brand in the UK this year and more.
The 2015 State of the UK Fitness Industry Report reveals that the UK health and fitness industry is in good health, it has more clubs, more members and a greater market value than ever before. 1 in every 8 people in the UK are members of a gym, an all-time penetration rate high of 13.7%.
Read MoreDavid has recently been appointed as the correspondent for the Sasakawa Sports Foundation (SSF) in London. Read David's first SSF article below (click to read the full article).
The SSF was established in March 1991. Since then the SSF has implemented a wide range of activities such as survey research, grant programs, and international cultural exchange in order to promote the enjoyment of sports by "anyone, anytime, anywhere".
As Japan has faced the declining birthrate and the ageing society, the public awareness about the importance of sports and healthy lifestyles has increased. Despite this fact, over the past 10 years, the number of people who are unaccustomed to playing sports has remained steady at 5 out of 10. SSF believes that it is our responsibility to change this shocking statistic while helping create a healthy, dynamic environment for everyone, the mission of SSF.
David's latest article in body Life. Is the Fitness Sector being honest with itself and asking if we really know what we're doing?!
Some of the most common reasons for not getting active and exercising are gym memberships and fitness equipment being inaccessible and too expensive. Many companies however are challenging the traditional high cost health club notion with low cost exercise alternative. Following the success of Sports Direct £5 per month gym memberships Poundland have launched a 37 piece range of fitness and exercise equipment by ActivLife for £1.
The large range will have something for everyone, from those looking to hit the weights hard to those looking to balance on their heads in yoga. The range includes free weights, weight gloves, skipping ropes, yoga mats, workout towels and gym bags all for £1 each. The range also include protein shakes, protein bars, water bottles and protein shakers by ProteinActive as nutrition is more than half the battle when staying active and keeping your nutrition on track.
All this low cost fitness equipment will hopefully increase participation in sport and exercise, which in turn can reduce inactivity and obesity levels in the country, both of which have recently been reported as an increasing problem in the UK.
It looks like low cost alternatives will continue to grow as other budget stores such as Primark recently increased their exercise clothing and equipment range. So the excuse of exercise costing too much or being inaccessible is on the way out, as the cost of exercising is still going down. You can set up a home gym for less than a fiver and workout in the comfort of your own home thanks to Poundland.
Morgan Evans - The Leisure Database Company
The Health Club Management 2015 Handbook is now online - http://www.healthclubhandbook.com/2015. Take a look for lots of invaluable insights, stats, predictions and trends for the year ahead.
Check out p54 for David's latest views on the State of the UK Fitness Industry. Is the private sector growing? How is the low cost market faring? Is the public sector staying strong? What part is the latest fitness tech playing? Have a read and see!
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