Contact: Ali Agmen-Smith
Deloitte
Public Relations
+ 44 (0) 207 303 0514
UK fitness clubs had 53,500 fewer members in June 2006 compared to the previous year as the impact of rising interest rates and falling consumer confidence begins to take hold, according to the HealthClubBenchmark Survey by Deloitte.
Latest data shows the number of people joining health clubs has fallen on average 8% for January to June versus the same period last year. Monthly membership subscriptions at a UK health club average £39.05 according to the survey and encouragingly these have increased 3.5% over the past 12 months. However, the fall in members has meant total revenue from subscriptions has improved on average by just 1.5% over the year.
Deloitte’s analysis shows that clubs have attempted to stimulate new memberships through decreased joining fees. These have dropped by 17% January to June 2006 on the same period last year.
Adrian Balcombe, leisure partner at Deloitte says: “Despite government initiatives to promote exercise we have seen a decrease in the number of people paying for health club membership. With conditions becoming tougher in the UK domestic economy, many consumers are opting to cut their discretionary spending. The leisure industry, like all consumer-focused businesses is entering a tough time.
“With total operating costs for health clubs on the rise, profit margins for the industry are under pressure. To succeed in the current economic conditions, health clubs and leisure centres need more variable pricing structures and to retain members through improved service and a more enjoyable exercise experience. Lowering joining fees may help attract new members but will not retain existing members who may be looking to cut back discretionary spending.”
He adds: “The industry needs to react quickly, as, despite heightened awareness of obesity problems and the link between health and fitness, consumers are not yet opting to join health clubs, and clubs are not achieving expected growth in member numbers.”
The survey shows all 13 UK regions struggled to generate new members, with no region improving on last year’s performance. Inner London health clubs have been most resistant to economic pressures, while clubs in Northern Ireland and the West Midlands were hardest hit, with membership numbers falling 7.6% and 6.5% respectively compared to June 2005.
UK Health Club key performance indicators (January - June 2006)
| |
All UK |
| |
Jan - Jun 2006 |
Change* |
| Subs per member (£) |
234.34 |
3.4% |
| Joining fee per joiner (£) |
14.42 |
(17.1%) |
| Gross Operating profit (£) per member |
140.07 |
1.0% |
| EBITDAR per member |
114.78 |
(2.9%) |
*Percentage change compared to the prior period January to June 2005
Source: HealthClubBenchmark Survey by Deloitte
- ENDS -
Notes for editors
HealthClubBenchmark is the first ever benchmarking solution for the UK HealthClub industry tracking the financial performance of the sector every month. Drawing on data representing 1.4 million members and 470 Health Clubs across the UK, HealthClubBenchmark provides in-depth analysis of key membership and profitability statistics. HealthClubBenchmark was supported and designed by a number of leading UK HealthClubs including Cannons, David Lloyd Leisure, Esporta, Fitness First, Greens, Holmes Place and LivingWell.
For further information or details on how to join the survey please call us on +44 (0) 20 7007 2733 or visit us at www.HealthClubBenchmark.com
About Deloitte
In this press release references to Deloitte are references to Deloitte & Touche LLP which is among the country’s leading professional services firms, providing audit, tax, consulting and corporate finance services. Known as an employer of choice for innovative human resources programmes, it is dedicated to helping its clients and people excel. Deloitte & Touche LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu (‘DTT’), a Swiss Verein whose member firms are separate and independent legal entities. Neither DTT nor any of its member firms has any liability for each other’s omissions. Services are provided by member firms or their subsidiaries and not by DTT. Deloitte & Touche LLP is authorised and regulated by the Financial Services Authority. The information contained in this press release is correct at the time of going to press.
