2017 has been another record year for the gym and leisure industry, according to the latest research by the Leisure Database. Johnson Reed Fitness Finance director, Jamie Collier, assesses the challenges gym and leisure businesses face as they go into the new year.
We’re seeing record membership figures, with 9.7 million fitness members in the UK – a 5.1% increase on the previous year. We’ve also seen increases in the number of fitness facilities and market value; 4.6% and 6.3% respectively. With many key metrics fast-approaching milestones, experts predict 2020 may be the ‘golden age of fitness’.
Whilst both public and private sector fitness establishments have shown strong growth throughout the year, it’s the private sector that appears to be leading the way. In particular, the low-cost commercial market continues to be the main driving force, with over 500 clubs in the UK accounting for 15% of market value and 35% of membership in the private sector.
Whilst budget clubs seem to be at the top of their game, the US budget market is reaching saturation – and usually a few years on their tail – the UK are sure to follow. It’s predicted that we’ll see a resurgence in boutique fitness; the small, group-based personal training at the opposite end of the price bracket. The trend is increasingly gaining traction, with events like ukactive’s upcoming ‘Sweat’ aiming to bring together influencers and entrepreneurs in the rapidly-growing sector.
Competition is rife, so it’s increasingly important for gyms and leisure centres to stay at the top of their game and offer attractive packages to retain their existing membership and attract new custom. The UK’s penetration rate is at an all-time-high of 14.9%, with one in every seven people now a member of a fitness facility. State-of-the-art kit is a leading factor in continued attendance, and this needs to be a key consideration for business owners going into the new year.
Whilst the public sector has also shown healthy growth this year, subsidy cuts are increasingly putting pressure on these businesses and their ability to survive. They have a responsibility to provide certain services and facilities to their local communities, and cannot always afford to be as competitive or operate as commercially as their private sector counterparts do.
Whilst finances are more closely-regulated in the public sector, lease finance is still a feasible – and often preferable – option for businesses looking to acquire new equipment. We regularly work with all kinds of public sector bodies, helping them make purchases and manage finances over a repayment schedule on a fixed term. The ability to factor in the cost of the equipment and accurately budget around it tends to be a big hit with financial directors!
Overall, the fitness industry has seen some promising developments throughout 2017, and whatever the new year brings for you and your business, it’s of the utmost importance to ensure you’re well-equipped to grow and evolve with the fierce competition.
If our fitness finance experts can assist you or provide a quick equipment lease or unsecured loan quotation, get in touch on 0161 429 6949.