Since it opened in 1981, Sydney gym Hiscoes has survived recessions, the Global Financial Crisis and numerous changes to the fitness industry. But in the last few years the gym has faced an increasingly crowded market, with consulting group IbisWorld warning of market saturation.
Hiscoes director Susan Kingsmill said about a third of the gym’s clientele were long-term customers, but the greater competition meant it is always looking for leads on transient customers that move between gyms.
“At the moment we need 170 to 200 leads a month to keep the whole ball rolling,” Ms Kingsmill said.
Budget 24-hour gyms squeeze margins
The Australian fitness industry is now worth $2.4 billion, according to IbisWorld.
Most of this comes from gyms and fitness centres, with a small remainder split by independent personal trainers working outside a fitness space.
Fitness Australia chief executive Bill Moore said the industry has been lifted by the invigorated interest in personal wellbeing in the last decade.
“There’s never been as many health clubs as there are now,” he said.
“The accessibility, the availability is nothing like it has ever been before.”
One of the most significant shake-ups has been the introduction of budget 24/7 gyms — intermittently staffed centres that represent the “high volume, low cost” side of the market.
IbisWorld market researcher Bao Vuong said the business model helped expand the size of the industry over the last five years, but the gains may be coming to an end.
“As the market becomes more saturated, this is anticipated to slow industry revenue growth,” he said.
Ms Kingsmill said she thought the budget 24-hour gym craze was “a real step back” and is glad the model is reaching its peak.
Competing on price — and the associated cost squeeze — has left plenty of challenges for the rest of the industry.
“We’ve all done the best we possibly can with the costs in the fitness industry, and we are all offering great value,” she said.
“So we really need the economy to do well, we really need people to have money in their pocket so they can start to pay a market rate for really good service.”