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2011 Global Low-cost Gym Sector Report - Ray Algar
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2011 Global Low-cost Gym Sector Report - Ray Algar

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Presentation by Ray Algar, Oxygen Consulting and Melissa Rodriguez, Research Manager, International Health, Racquet, and Sportsclub Association (IHRSA)...

Presentation by Ray Algar, Oxygen Consulting and Melissa Rodriguez, Research Manager, International Health, Racquet, and Sportsclub Association (IHRSA)

IHRSA European Conference, Milan, Italy, October 2011

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  • 1. Ray Algar & Melissa Rodriguez
  • 2. oxygen-consulting/think-tank
  • 3. Discuss why and how the low-cost gym sector is growing internationally
  • 4. Neutral perspective
  • 5. 50% lower than country average price Scope to Heavyoperate 24 technology hours and web use DEFINITION LOW COST GYM Ability to operate Predominantly a with a single gym-only person proposition
  • 6. Digital infrastructure Lowattendance Simplicity MARKET DRIVERSChanging Affordabilityconsumer Consumer sentiment towards clubs
  • 7. What do UK consumers think of the low-cost gym experience?
  • 8. FitSpace The Gymmembers Group ex-members
  • 9. TextFitSpaceMembers
  • 10. 20% 80%First gym Previous gym experience
  • 11. How much do you agree with the following statements?0 = Strongly 5 = Strongly disagree agree
  • 12. How much do you agree with the following statements? 3.3 3.5Average Response 3.9 3.9 4.1 Know first name of staff team Has all facilities I need Receive emails Staff available to provide free advice Staff approachable
  • 13. How much do you agree with the following statements? 3.9 4.1 4.3 4.5 4.1 4Average Response 4.2 4.2 4.5 Delivers on website promise Friendly atmosphere Always feel safe Helping me to become healthier Excellent value for money
  • 14. How likely are you to recommend this gym?0 = Not all all 10 = Definitely likely recommend
  • 15. How likely are you recommend FitSpace? 7.6 7.8 8 8.2 7.7 7.8Average Response 7.9 8.1 8.2 Males Members with experience of other gyms All members Members for whom FitSpace is first gym Females
  • 16. Net Promoter Score 0-6 7-8 9-10Detractor Passive Promoter
  • 17. Example - 1,000 member club 200 400 400Detractors Passives Promoters 40% - 20% = 20
  • 18. Net Promoter Score 0 10 20 30 40 19 22NPS SCORE 28 37 37 Age group - 25-34 Males All members Females Age segment - 16-24
  • 19. UK 2010 Net Promoter Score study 0 12.5 25 37.5 50 22 19 41Net promoter score Detractors PromotersSource: NPS Leisure, Health & Fitness Sector, Leisure-net, The Retention People 2010
  • 20. Still a member in six months time? 7.6 7.85 8.1 7.7 7.8Average Response 7.9 7.9 8.1 Males Members with previous gym experience Member for more than one year All members FitSpace is first gym Females
  • 21. Out of industry Net Promoter Scores 0 40 80 72 35 NPS 33 15 14Apple - computers Subaru - cars Jumbo - supermarketsCitybank - banks Sky - internet
  • 22. Text The Gym Group ex-members
  • 23. 17% Males - 60% 83%First gym Previous gym experience
  • 24. How much do you agree with the following statements?0 = strongly 5 = strongly disagree agree
  • 25. How much do you agree with the following statements? 3.4 3.5 3.7 3.7 Staff available to provide free advice All the facilities I needed Friendly atmopshere Helped me become healthier person
  • 26. How much do you agree with the following statements? 4 4 4.1 Always felt safe Email with advice Provided everything promised on website
  • 27. How likely are you to recommend this gym?0 = Not all 10 = Definitely all likely recommend
  • 28. How likely are you recommend The Gym? 7 8 9 7.4 7.5Average Response 7.5 7.6 8.5 Members with previous club experience All members Males Females The Gym was first gym member joined
  • 29. Net Promoter Score 0 10 20 30 40 4 20NPS SCORE 21 22 36 Age group - 35-44 Males All ex members Females Age segment - 16-24
  • 30. Where are members now? 31% Male 66% 69%Joined a different gym Not joined another gym
  • 31. How long a member?More than one year 7% Unsure 5% 0-3 months 27% 7-12 months 26% 4-6 months 35%
  • 32. 26% of this group hadexperience of other gyms 0-3 months 27%
  • 33. Shall we try OK, let’s go tryanother gym? ...36% of this group went on to join another gym
  • 34. How likely to recommend to a friend - by clubBirmingham 7.9 8.5 Brighton 7.4 7.4 Liverpool 7.4 7.4 Males Females
  • 35. “No frills, low-cost gym.Especially important for us students!” Female member The Gym, Birmingham 10/10
  • 36. “The friendly atmosphere,knowing you are safe andnot being judged by staff” Female member The Gym, Birmingham 10/10
  • 37. “Cleanliness and amount of equipment available” Female member The Gym, Birmingham 10/10
  • 38. “There was a lack of staff. Isearched for 15 minutes before finding staff. I cancelled after going just once” Male member The Gym, Liverpool 2/10
  • 39. “Provide more supervison from staff” Female member The Gym, Brighton 6/10
  • 40. “I would have liked a private changing cubicle” Male member The Gym, Birmingham 5/10
  • 41. Leading international low-cost gym brands - clubs At September 2011 17 19 23 38 52 Kingdom of sports Fitinn Smart Fit Fit for free Fitness24Seven
  • 42. Leading international low-cost gym brands - clubs At September 2011 54 70 80 141 447 Basic Fit Easy Fitness Clever Fit McFit Planet Fitness
  • 43. Planet Fitness - club growth 387 309 22.5% compound 258 annual growth rate 2010 2009 2008
  • 44. €70,000- €184,000 existing gym €184,000- 1,393 - €575,0002,223 sq.m new Planet Fitness gym Club Membership Franchise from business €4.75/month model
  • 45. How members rate Planet Fitness on Yelp 19 16 12 20 6 1 star 2 stars 3 stars 4 stars 5 stars
  • 46. “I love Planet Fitness. Why?Because I will never find another gym in NYC this cheap.Seriously, I spend more on peanut butter each month!” Male member Planet Fitness, New York
  • 47. “This gym is WAY tooovercrowded and there is notenough equipment to use so I decided to buy and bring some of my own” Female member Planet Fitness, New York
  • 48. Planet Fitness - EBITDA margin (3 clubs) 39% 54% 42% Club - 25th Percentile Club - 50th Percentile (median) Club - 75th Percentile
  • 49. 123,332 likes
  • 50. 276 ‘likes’ per club
  • 51. 5,854 followers
  • 52. 5,854 followers
  • 53. Global 500 Franchise List Planet Fitness Year Rank 2011 81 2010 157 2009 116
  • 54. “To become the world’s largest fitness club company” Michael Grondahl, CEO
  • 55. Are low-cost gyms good ? for the industry?
  • 56. A compelling story for consumers
  • 57. Journalists are excited by them
  • 58. They are challenging clubs to examine their member proposition
  • 59. “It has focussed me on ourspecific proposition - Why become a member of Holmes Place?” Neil Burton, CEO Holmes Place Central/Eastern Europe
  • 60. Some key questions ?
  • 61. Do you see a low-cost or a more ‘operationally intimate’ ?future for your business?
  • 62. What is the underlying purpose driving your business? ?
  • 63. What do you want your business to stand for? ?
  • 64. What type of business are youpassionate about developing? ?
  • 65. What will be your legacy to this industry? ?
  • 66. Steve Jobs1955 - 2011
  • 67. oxygen-consulting/think-tank