22 Sep 2023 World leisure: news, training & property
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Health Club Management
2023 issue 1

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Leisure Management - Tackling 2023

Everyone's talking about

Tackling 2023

Rather than being the Roaring 20s, this decade has been a test of resilience so far. Will things change this year? Kath Hudson reports

Third Space is opening clubs in affluent residential areas of London Photo: Third Space

While the UK was still grappling with a prolonged Brexit, along came a global pandemic and a war which has shaken Europe and the wider world, contributing to an energy crisis, exacerbating a cost of living crisis and tipping parts of the world into recession.

When we needed strong leadership in the UK, our Prime Minister was kicked out for partying – and lying about it – and his successor topped things off with a brief but fiscally calamitous term in office. Now on our third Prime Minister in a year, we’re reaching the point where the government is starting to claw back the financial help given over the past few years.

While still not officially being post-COVID, we’re now dealing with the fallout from the pandemic. So what light is there at the end of this tunnel and how can we turn challenges into opportunities as consumers embrace health and wellness? We ask the experts.

John Penny
If the experience is great, members will stay, says Penny / Photo: Third Space
Third Space: MD

One would like to hope this year will be better than 20/21, and build on the bounce back of 2022, but it really is difficult to tell. However, being open to trade has to be a level up from being closed!

The dual impact of the cost of living crisis and recession is likely to make it difficult to recruit and retain key staff. If the energy cost issue doesn’t level soon, it will be a concern for many operators regarding cashflow, not just those with spas and swimming pools. Rising and unpredictable consumable costs will continue to make it challenging when it comes to managing margins, while increased construction costs will hinder plans for the future. Unfortunately, it’s inevitable some brands will fall, but others will rise and make acquisitions.

However, although some consumers have less discretionary spend, there’s a greater appetite for wellness and a willingness to make cutbacks elsewhere in order to invest in fitness. COVID contributed to an enhanced awareness of mental and physical health and wellbeing. Some consumer reports indicate consumers may reduce their investment in keeping fit much less than in previous recessions and there might not be any reduction at all.

The industry has been made more resilient by the pandemic: leaders and managers have been forced to become more agile and collaborative in the face of continually pivoting change. The focus on staff and their wellbeing is set to make the industry more attractive as an employer and the innovation in digital services is set to continue.

Third Space will be continuing to focus on employee wellness and satisfaction, so we can recruit and retain the best team members. We’ll also retain an unrelenting focus on the member experience: if it’s really good our members will stay. And we’re pressing forward with our product innovation and new club pipeline with our ninth and tenth sites set to open in Wimbledon and the Battersea Power Station development in Q3 of 2023.

It’s inevitable some brands will fall, but others will rise and make acquisitions
John Treharne
People are prioritising spending on gyms for health and community / Photo: The Gym Group
The Gym Group: chair

Going into 2023, we’re feeling positive. There is undoubtedly uncertainty in the economic environment and increased financial pressure on households across the country, but against this backdrop, we remain committed to breaking down barriers to fitness with affordable and contract-free membership options.

The pandemic has highlighted the importance of fitness for both our physical and mental health, and we’ve seen an eight per cent increase in the average monthly visit per member to our gyms, when comparing October 2022 with the same month in 2019. I believe this prioritisation of exercise is not only due to the health benefits, but also the role of gyms and fitness centres to help to bring people together and create a sense of community.

Clearly higher energy costs will be a challenge for the sector, and operators are already adapting their facilities and opening hours to manage this. We’ll monitor this closely, while continuing to roll out the energy saving measures we already have in place across our sites and remaining open 24/7.

We’re passionate, sector-leaders in sustainability: the UK’s first carbon neutral gym chain and have set targets of 50 per cent carbon reduction before 2030 and achieving net-zero by 2035.

The Gym Group’s focus in 2023 will be consistently providing a great experience for our members, alongside the continued roll out of our expansion plan, reaching more than 300 sites by 2025. The last few years have shown how resilient the sector can be and while there remains uncertainty, we see that people are choosing to prioritise fitness, particularly affordable and flexible fitness.

While there remains uncertainty, people are choosing to prioritise fitness
The Gym Group is the UK’s first carbon neutral gym chain / Photo: The Gym Group
Mike Hill
photo: Leisure-Net
Leisure-net: founder

In the private sector, established boutique and budget gyms are likely to continue to do well in 2023, although we expect some middle market gyms to be squeezed, while for public sector leisure, this year looks likely to be harder than the last three.

As local authorities have their national government settlements reduced, some will be facing budget shortfalls and looking for savings in discretionary service areas, so it’s likely leisure provision will see budget cuts in some areas, while operators are facing rising costs in energy bills and wages, along with the continued issue of attracting and retaining staff. The move towards net carbon zero for local authorities will be a particular opportunity for swimming pools, where energy usage is high and we will see effective cost-cutting going on in areas where operators are innovating in their energy generation.

In some ways COVID made the sector more resilient, but according to Sport England’s data tracking tool – Moving Communities – most local authority operators are still not back to pre-pandemic participation levels, although some have successfully raised prices to compensate for this reduction in volume.

Reports show a continued weakness is the perception of cleaning standards at some of our public sector leisure centres, with satisfaction levels still low compared with other service elements, so this is an area that can be worked on and improved in 2023.

Building stronger relationships with our health partners in the NHS is an exciting opportunity facing the sector, which would allow the fitness industry to access funding to deliver innovative projects in terms of rehabilitation and illness prevention.

There’s a concern that during the next few years the NHS will be caught up with immediate fire fighting, rather than investing in activity programmes which will return on investment over the medium- to long-term, so we will need to navigate this carefully as a sector.

Building stronger relationships with our health partners in the NHS is an exciting opportunity
Some operators have successfully raised prices / Photo: Shutterstock NDAB/Creativity
David Minton
Photo: Leisure Database CO
LeisureDB: founder

Let me start with two opportunities which excite me, could transform the sector in 2023 and help it double in size. These are opportunities which a growing number of operators and influencers within the industry are getting behind.

Around 40 per cent of the population is over 50, with the older population now bigger than the working-age population. The Global Wellness Institute estimates healthy movement for this population to be a billion dollar business, which the fitness industry is currently missing out on.

The Baby Boomer generation is now the largest demographic, with more than 14 million people aged between 58 and 76, while The Silent Generation – aged 77 to 95 – is the wealthiest ever.

Both these generations need healthy day-to-day movement to enjoy their friends, grandchildren, pets and active travel. This personal incentive ensures loyalty and regular attendance. Recent research shows attrition rates among these cohorts to be less than half that of the more faddish 18- to 30-year-olds.

Appealing to this population needs a tweak in programming, particularly the provision of more social offerings, which can be made available during off-peak hours.

Twice as many people own a dog as have fitness memberships, so why not add to the fun by bringing dogs in on the action? We’ve already seen a growth in puppy yoga and outdoor mobility classes, so dogs get a workout too. Owners like doing classes with their pets and dog walking groups make sure everyone gets their 10,000 steps in.

Researchers at the Institute of Healthy Ageing have found dogs help to de-stress owners, along with delivering the benefits of being outdoors and in nature. Personally, I’ve joined the Ramblers Walking for Health group with my dog and have met many people who say they now only attend dog-friendly classes.

Healthy movement for older populations is estimated to be a billion dollar business
Older people need movement to be able to enjoy life / Photo: Shutterstock/Ground Picture
Dog-friendly classes are a growing market / Photo: Shutterstock/Egrigorovich
David Stalker
‘Better never stops’ and the industry must innovate, says Stalker / Photo: Europe Active
Europe Active: president

Navigating the months ahead is not so much about what we think will happen, but more about what we know must happen in order to survive. Right now we’re a far cry from the roaring 20s we’d love to be experiencing, but the opportunity is still there to pivot and prosper.

Our weaknesses as a sector have historically been around a failure to seek out or embrace change, but just as our members can’t progress in their journey of physical activity alone, we mustn’t forget the importance of coming together as an industry in partnerships that offer more than the sum of their parts.

Europe Active’s Sectoral Manifesto focuses on four collective priorities we must fully embrace at every opportunity in order to make a difference – these are improving community, health, digital and standards.

We need to deepen penetration into local markets – many of us have remained resilient by reaching out beyond our immediate networks. This has proven that further effort as a collection of health partners will bring the biggest benefits for all involved.

Health as a focus over fitness is vital. Members and those who have never been to our gyms need support with their wellbeing more than ever before. We, as a sector, need to find ways of providing our services, expertise and community support to them inside and outside our facilities.

Digital integrations have proven we can meet communities wherever they want to move and these integrations need to be readily available for the benefit of members.

he most valuable tech partners offer a community of likeminded individuals ready to compete in fun workouts and challenges, most importantly, in a positive atmosphere.

Not only does digital cement the customer journey in measuring effort, instigating positive behaviour change and forging new relationships, it can also offer much needed escapism through gamification, at a time when people are worried about their wellbeing – both in body and mind.

he concern is that operators will remain the same, hoping for better times, but there is growth to be had and using the above approaches, our operational standards will be raised.

Unprecedented times come with fear and uncertainty, but better never stops and our industry will continue to improve.

Health as a focus over fitness is vital
Consumers are looking for escapism through gamification / Photo: Shutterstock/G-Stock Studio
Peter Bundey
Photo: GLL

As a charitable social enterprise, we’re determined to retain purpose at the core of our services and organisational culture. The cost of living crisis has exaggerated the disparities between the advantaged and the disadvantaged and we have a responsibility to ensure we remain accessible to all sections of the community. This requires ambition and entrepreneurship within our services, using the knowledge of proven leaders and successful organisations to think creatively and deliver dependable impact.

The continuing weight of macro-economic and geopolitical impact on the sector in 2023 will demand agility, expertise and resourcefulness to both stabilise the public sector leisure industry and enable it to thrive. Societally, we face challenges across economic, social and environmental agendas and the sector has a crucial role to play in this, including the provision of health and wellbeing, equality, inclusion and environmental sustainability.

The coming months will reveal whether government recognises the value of public leisure enough to provide appropriate support against the exponential rise in utility costs. A failure to do so would throw some vital services and the national physical leisure infrastructure into survival mode, while with government support we can look forward to the continued modernising and redesign of key services which had started to show real impact in the post-lockdown recovery months.

GLL is finalising a range of new strategies which will fundamentally shift our impact and resonance with customers and our service partners and although 2023 will demand an focus on stability for both leisure services and society, we’re also putting in place a dynamic set of drivers for innovation, impact and performance.

GLL is finalising a range of exciting new strategies which will fundamentally shift our impact
Reasons for optimism
Some positives for 2023 outlined

• Clubs are open and trading

• Research shows people are prioritising fitness in their spending plans

• The pandemic has driven an increased awareness of the importance of physical health

• There is an increased interest in mental wellbeing, which is supported by exercise

• The challenges of the last few years have contributed to the industry’s resilience and agility

• Now is a good time to invest in renewables

• Offering healthy movement programmes for the over-50s represents a huge opportunity

• Potential exists to team up with health partners

• Thanks to lockdown more people have dogs, how about bringing them in on the action?

• Digitalisation offers further opportunities to engage with consumers wherever they are

• Gyms can create a sense of community in a fractured world

Originally published in Health Club Management 2023 issue 1

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