Mar 21 2018
The Gyms and Fitness Centres industry has displayed strong growth over the past five years. The industry has undergone significant structural changes over the period, with many operators focusing on a 24-hour business model. These establishments are usually unstaffed outside of standard business hours, making them cheaper to operate while still being convenient for consumers with a varied range of lifestyles and work schedules. Anytime Australia, trading as Anytime Fitness, and Fitness and Lifestyle Group TopCo, under the Jetts Fitness subsidiary, have led this change over the past five years. Both companies have reported strong revenue growth over the five-year period.
Anytime Fitness was one of the first gyms to implement 24-hour access for its members, which allowed the company to significantly reduce expenses. These gyms tend to have lower wage costs while maintaining longer opening hours. This situation has become a win-win for both the gym and consumers, as the gym is more flexible for consumers in terms of opening hours, while maintaining lower operating costs. These savings are often passed down to members in the form of cheaper fees.
Anytime Fitness has been one of the fastest growing franchises in Australia and has now become one of the largest gym brands in the Gym and Fitness Centres industry. The company’s revenue has increased strongly over the past five years, including a 9.8% increase in 2016-17 and an anticipated increase of 8.0% in 2017-18. The company is expected to achieve strong profit margins, as its business model enables it to operate with low wage costs.
Jetts Fitness also helped pioneer the budget 24-hour gym model, and the company has expanded significantly in terms of revenue and establishment locations over the past five years. Jetts Fitness was acquired by Quadrant Private Equity in 2016, as were Goodlife Health Clubs and Fitness First. The operation of these brands has since been combined under Fitness and Lifestyle Group TopCo Pty Ltd. The combined revenue of Fitness First, Goodlife Health Clubs and Jetts Fitness is expected to increase by 3.5% in 2017-18. Jetts Fitness has driven a significant proportion of this combined growth, as the brand has achieved solid demand due to the rising popularity of 24-hour gyms.
Although 24-hour gyms have driven strong growth for the Gyms and Fitness Centres industry over the past five years, revenue growth is forecast to slow over the next five-year period. Market saturation will mean that both Jetts Fitness and Anytime Fitness require new and long-term business and marketing strategies to attract new consumers and maintain brand loyalty for long-term customers.
Relevant companies include: