MAXED OUT WITH 24 HR CLUBS?
17June/2015

MAXED OUT WITH 24 HR CLUBS?

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MAXED OUT WITH 24 HR CLUBS?

According to the latest Ibis Report reports, ‘The rapid expansion of budget 24- hour gyms has saturated the market.’ Have access at anytime clubs had their day or is there still room for expansion? Before you open your doors 24/7, read our can’t-miss view.

Words: Jonathan Davie

You’d have to have been living under a rock to miss the surge of growth in 24-hour clubs over the past five years. It seems every second corner has a 24-hour club offering from one Franchise or another. However with the growth of the small box 24-hour clubs reaching the point of saturation, many are contemplating where to now.

So what happens with oversupply or saturation? Well, you either evolve or you are swept aside. In Australia we have a unique opportunity to learn from others to try and avoid the issues of oversupply can cause.

HOW THE USA ADAPTED

Thomas Plummer, one of the most recognised Fitness Business advisors in the industry, believes Australia is in a unique position to learn from the precedent set by the US market:

Because US successes and failures occur years before anyone else tries the ideas, the Aussie market has a prevision of what might work and what might fail, helping to shape the way in which it plans and runs similar concepts.

So can we learn from the US to strengthen individual business and the industry in general? Ultimately the failure of any fitness business or models is bad for the industry. It leaves disgruntled members, job losses, and inevitably loss of confidence in the Industry from finance companies and banks.

Pretty much everything that has happened in the Australian market in the past five years has happened previously in the US.

There has been the closure of many on the small circuit-style clubs, ladies-only facilities have also suffered with the ladies-only areas being placed in full service clubs. Big box full- service clubs have struggled with the strong growth of the 24-hour clubs, cross training boxes and PT style studios.

These additional models have attracted new people into the fitness scene; however it has mainly pulled people away from other existing facilities based on price and convenience. Essentially the rate of new gyms opening far outweighs the amount of the population entering the industry.

ADAPTING TO THE AUSTRALIAN INDUSTRY

So what can we learn from the US to help us be more successful Down Under? Is it as simple as copying a US club model and relaunching it in the Australian market hoping to gain the success of the original model? Unfortunately many of the imitators
don’t have the same success due to the acceptance of the particular model into the market, the market moving on from that model or simply not offering a big enough point of differentiation.

“The lesson to learn is that every business has a pattern, and that the US experience will often provide a roadmap to how the same business model will perform in Australia. The 24-hour idea will be copied and fade; the cheap clubs will kill it for a few years, be copied and then fail; and the big box club will slowly fade and be replaced by the training-centric business based upon results and a higher return per client rather than volume,” says Plummer.

The rise in the 24-hour small box has forced the traditional full service gym to lower their membership pricing, introduce no contract memberships, tighten on staffing cost to try and compete. Unfortunately for many clubs this was unobtainable and we have seen the demise or reduction on many of the larger full-service gyms.

 

This is an extract from Fitness PRO Magazine issue 2. To purchase your copy, subscribe online or email admin@fitmedia.com.au.

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