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Bounceback challenges The appetite for health clubs is strong among consumers and investors – to take advantage of this, operators must figure out how to meet key challenges in operationally sustainable ways

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he market is roaring back in the UK and on page 44 we talk to big-box operators about challenges, trading and changing consumer behaviour. Some, such as David Lloyd Leisure (page 32), are already back to pre-pandemic membership levels only a few months after reopening, with others close to hitting this important target. However, there are also adjustments that need to be made if the sector is to fully recover. A major priority is adapting locations – this is clearly an issue, with city-centre sites and also some rural sites doing less well and we’re seeing operators such as 1Rebel pivoting and opening studios in residential areas (page 26) to rebalance their businesses. The change to homeworking is seeing operators overhauling their property portfolios to align them with the new reality. This is reshaping the sector and – where sites are disposed of – boosting the independents and giving entrepreneurs and franchises a way into the market. Operators with cash are talking about once-in-ageneration opportunities on the acquisition trail and setting out to aggressively expand their portfolios. Some, such as Aspria (page 26) and Third Space (page 20), are taking on investors to fund this growth. There’s also an issue with sleepers – for operators reliant on this model, pandemic cancellations have stripped away the accumulation of decades of sleeper Direct Debits, so even if attendances recover, the bottom line will be challenged until membership can be regrown. This challenge is driving the sector to refresh and reinvent itself, making new alliances and partnerships to accelerate market penetration and growth, as we’ve seen this month with the news of Hussle’s partnership with McDonald’s (page 30). Increased operational costs are also burdening operators – Russell Barnes, CEO at David Lloyd Leisure says COVID-secure operating protocols are costing an additional £800k a month (page 32) – we need to find cheaper and more environmental ways to continue to deliver these elevated levels of hygiene.

The Gym Group and Fiit have created in-gym branded pods

Regaining pre-pandemic membership levels is the first step – the next challenge is returning to profitability Customers who are fearful of returning are being missed and operators are seeking ways to reassure them or create new services to draw them back into clubs. On page 64 we look at The Gym Group’s collaboration with Fiit, which is linking at-home workouts with new in-club solus workout pods and group studios, blurring the boundaries and helping bring members back. Regaining pre-pandemic membership levels is the first step on the journey to recovery. The next challenge is to continue to harness creative thinking, forge new partnerships and find solutions to these and other challenges to return to full profitability. Liz Terry, editor


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