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The Australian Fitness Industry
Reference No. 18008 • February 2009
2
Table of Contents
Background, Aims and Methodology ........................................................................... 3
Background ..............................................................................................................4
Research Aim & Objectives .........................................................................................5
Methodology .............................................................................................................6
The Key Headlines....................................................................................................... 7
The Key Headlines .....................................................................................................8
Snapshot of the Fitness Industry .............................................................................. 10
Fitness Industry Snapshot ........................................................................................11
Main Detailed Findings.............................................................................................. 13
Organisation Type....................................................................................................14
Facilities and Services ..............................................................................................16
Fitness Industry Customers.......................................................................................22
Fitness Industry Employees ......................................................................................28
Membership ............................................................................................................30
Membership ............................................................................................................30
Financial Details ......................................................................................................31
Appendix 1: Fitness Industry Profiling Questionnaire ............................................... 36
3
Background, Aims and Methodology
4
Background
Fitness Australia is the national industry association for the health and
fitness industry in Australia.
Fitness Australia has a wide membership base consisting of 800 business
members and 18,000 registered exercise professionals, offering a wide
range of services, including…
The Business Membership Scheme - providing tailored benefits and
services for fitness providers and industry suppliers
The Fitness Professional Registration Scheme - setting an industry
standard, encouraging best practice for the industry and its
professionals
The Continuing Education (CEC) Scheme - providing courses and
programs for industry professionals and helping keep the fitness
industry innovative
Recently restructured to form a single main operating entity across
Australia, Fitness Australia’s mission is…
‘to set standards, promote and represent the fitness industry in pursuit of a fitter, healthier nation.’
With this aim in mind, Fitness Australia has commissioned research to
better understand the Fitness Industry in Australia. In particular, the
objectives of the research are to better understand the fitness industry,
the industry customers and produce an industry overview. This report
represents the findings from this Fitness Industry profiling research.
Towards 2010 Fitness Australia's new strategic framework, "Towards 2010", reflects the important interrelationship within the fitness industry and provides an appropriate organisational focus for Fitness Australia in four key areas - their members, their industry, their community and their future.
Fitness Australia will do this by focusing on the following strategic goals:
Build foundation and core capabilities
Build scale and focus on member services
Increase organisational and industry profile
Maintain and enhance standards of excellence
This strategic focus will help drive Fitness Australia toward their overall vision…
"working for a fitter, healthier Australia".
5
Research Aim & Objectives
The business objective of the research is…
To support the ongoing positioning of the fitness industry with all levels of government
The specific research objectives that have been addressed to help achieve this are…
Collect profile information across fitness industry businesses, including… Understand the fitness industry
− Business type
− Services provided − Location
− Membership data
− Employee numbers − Financial status
Understand the fitness industry’s
customers
Collect profile information across fitness industry customers, including…
− Socio-economic profile − Demographic data − Location
Produce an industry overview
Report on key industry statistics
Identify emerging trends
Produce a report that is relevant to Fitness Australia and key stakeholders within the industry
Phas
e O
ne
Phase two the research of the research will examine the economic impact of the industry in more detail, in
particular the benefits of the fitness industry to preventative health.
6
Methodology
The results for the Fitness Industry Profiling Research are based on a total of 312 interviews across Australia.
Interviews were conducted online during December 2008 and January 2009.
The underlying structure of the sample of 312 is shown in the table below. These proportions are in line with
the geographical spread of the Fitness Australia contact database.
Table 1: Sample Profile
State Sample Size
# Sample proportion
%
NSW 128 41
Victoria 67 21
Queensland 59 19
Western Australia 19 6
South Australia 18 6
Australian Capital Territory 9 3
Tasmania 7 2
Northern Territory 5 2
Total 312 100
All e-mail contacts from the Fitness Australia member database and potential member database (comprising
non Fitness Australia members) were approached to conduct the research (a total of 1315 businesses).
Overall, 53% of interviews were conducted amongst Fitness Australia member organisations and 47% with non-
members.
The client name for the survey was revealed at the outset of the interviews and all participants were given the
opportunity to win a back pack donated by Champion Sport. Interviews lasted approximately 25 minutes on
average.
In addition to results from the Fitness Industry Profiling Research, the report includes data sourced from the
Sweeney Research Sports Report which profiles trends in sports interest and participation. Further details of
the Sweeney Sports Report can be found here…
http://www.sweeneyresearch.com.au/research-and-consulting_sports-entertainment-leisure.aspx
7
The Key Headlines
The following two pages outline the key headlines of the research and the potential implications
for the fitness industry
8
The Key Headlines
Increase in customer base in the last 12 months…
The fitness industry has enjoyed considerable recent growth (estimated by IBISWorld to be in excess of 15%
over the past five years) and has increasingly diversified into areas beyond the traditional fitness regimes to
further encompass the broad area of wellbeing, such as health and nutrition.
Over the last 12 months two thirds of fitness organisations stated they experienced an increase in their overall
customer base, helping drive revenues into the industry. This suggestion of growth in the industry reflects the
booming economy and the pinnacle of 16 years growth in the economy. Similar success will obviously be more
difficult however in the current economic climate.
Sweeney Research’s Financial Firestorm report (conducted in November 2008) also provides indications that
consumers are becoming more prudent with their finances. Entertainment, sport and leisure spend may well be
in line for cuts, with 41% of Australians expect to have to cut down on these types of expenditure in the coming
months.
In addition, not all organisations have grown, one in ten fitness organisations experienced a drop in customer
numbers over the last year. These drops mainly came from the more established fitness organisations (open for
more than 10 years) and from larger fitness centres. The growth of the smaller, more specialised fitness
organisations at the expense of these larger centres is an interesting parallel with an emerging trend also
identified in the firestorm report that sees Australians increasingly interested in helping their local businesses
through difficult times.
Revenues and profits increasing…
Membership is the single most important source of a fitness organisation’s revenue, and in line with the growth
in customer numbers, revenues have tended to increase over the last year (for two thirds (64%) of fitness
organisations). As times get tough, new customers may be more difficult to attract and are likely to be
increasingly wary of committing to long term contracts. It is clear from this research that fitness organisations
are already offering a range of fixed term contract offers, and it is likely that shorter term/more flexible
contracts are will become increasingly important in attracting consumers who are in a more precarious financial
situation.
Active membership base…
With more and more demands on people’s free time, attending fitness classes or gyms can be difficult. It is
therefore important that fitness organisations are flexible and are meeting the specific needs of their
customers. A strong indication that these requirements are, on the whole, being met is the relatively high
attendance rate estimated across the industry. On average, around two thirds (77%) of customers are said to
be active (regularly use fitness services) users of their gym.
9
Key customer base …
The profiling research survey results complement the Sweeney Sports Report in identifying women as a core
group for the fitness industry, in particular those aged between 25 and 44. Below are some observations on
Australian women aged 29-39 taken from our Financial Firestorm report which illustrate their mindset from a
financial perspective…
Table 2: Core Market Attitudes
Females 29-39% Agree
Population % Agree
Difference +/-
Will cut back on entertainment, sport and leisure 71 47 +24
Partner is working 83 63 +20
Worried about job security in economic downturn 24 14 +10
Better off than six months ago 10 19 -9
Notes: Interviewing online amongst n=500 Australian adults. Interviewing November 2008 Base: Total Population (n=500), Females 29-39 (n=48)
The results clearly indicate that the fitness industry’s core market is more likely than average to cut back on
entertainment, sport and leisure over the next few months. This could potentially have some repercussions for
the industry as memberships expire and strategies should be seriously considered going forward to ensure the
continued growth of the industry.
10
Snapshot of the Fitness Industry
The following two page snapshot of the Fitness Industry provides the core statistics and findings
from the profiling research study
11
Fitness Industry Snapshot
The following table summarises the key findings from the Fitness Industry Profiling Research…
Key findings
Organisation Type
Most fitness organisations classify themselves as either a personal fitness service (30%) or a
Fitness Centre (28%)
In the main, fitness organisations tend to be privately owned (68%), but other organisational structures are relatively common, for example…
− Franchise (9%) − Government owned (7%)
− Not for profit (4%)
Fitness Facilities
A quarter (26%) of fitness businesses are run without their own fitness facilities
− This is particularly common amongst personal fitness services (75% run without fitness facilities)
Two thirds of fitness organisations operate across multiple sites
Fitness Services
Almost all offer personal training (94%)…
− Most provide free weights (85%) and group exercise (81%)
Where group exercises are provided, the most common classes are…
− Strength and resistance (77%) − Flexibility/stretching abdominals (74%) − Boxing/combat (72%) − Circuit classes (71%)
Other classes which are less common include…
− Age specific classes (39%) − Dance related classes (23%) − Aqua fitness classes (23%)
Customers
Around four-in-ten Australians participate in gym workout or group exercise
Fitness customers are skewed towards females and those aged 25-44
Males aged 45+ are the demographic least engaged with the fitness industry (group exercise/gym workout)
Two thirds (67%) of fitness organisations experienced an increase in their customer base over the last 12 months, suggesting growth in the industry overall…
− Just one in ten experienced a drop in customer numbers
Around three quarters (77%) of customers are thought to be regularly using fitness facilities
12
Employees
73% of fitness organisations have employees (i.e. 27% are single person businesses)
Businesses that employ staff have an average of 53% casual staff
Fitness organisation’s employment tends to be skewed slightly towards females (61%) and fitness staff (70%)
Fitness employees are required to have minimum qualifications in almost all cases (98%)
− Certificates III and IV are common requirements
Membership
Two fifths (39%) say they charge their customers a joining fee
Around half of fitness organisations (55%) offer minimum term membership
− The term length varies considerably – annual (67%), half yearly (49%), quarterly (57%), monthly (47)
Financials
Driven by growth in customer numbers, revenues have increased over the last 12 months for two
thirds (64%) of fitness organisations
Membership fees and personal training fees are the two key sources of revenue for fitness businesses…
− Relatively little (3% on average) tends to come from merchandise sales
Employment is the most costly outgoing for fitness businesses (accounting for 33% of outgoings on average)
Around half of fitness organisations (54%) made an operating profit over the last 12 months. A quarter said they had made a loss (27%)
13
Detailed Findings
Over the following pages, we examine in detail the types of organisations prevalent in the
industry, the services they offer and their customer details, as well as identifying some broad
key financial trends in the industry over the last year.
14
Organisation Type
The level of diversity in the industry is reflected in the range of fitness industry organisations included in the
survey results. Whilst most businesses classified themselves as either a personal fitness service (30%) or a
fitness centre (28%), responses from community centres (3%), health/wellness centres (5%) and
leisure/aquatic centres (7%) were also captured.
In the table below we highlight the key findings on organisation type. The spread of organisation type across
state is relatively consistent, although (whilst not a significant difference) personal fitness services tend to be a
little more prevalent in VIC/TAS compared to other states…
Table 3: Organisation Type
TOTAL (n=312)
NSW/ACT (n=137)
VIC/TAS (n=74)
QLD (n=59)
SA/NT/WA (n=42)
Personal Fitness Service 30 26 42 29 26
Fitness Centre 28 28 24 31 26
Fitness Studio 13 15 11 14 14
Leisure/Aquatic Centre 7 7 9 5 10
Gym 6 8 4 3 7
Health/Wellness Centre 5 7 3 5 5
Community Centre 3 1 0 8 2
Base: All Fitness Organisations Q. Which of the following types of organisation best describe your business?
15
The organisational structure of fitness organisations can also take many forms. Most commonly, fitness
organisations are privately owned (either single site – 57%, or multi site – 11%), but they can also take the
form of a franchise (9%), a government owned organisation (7%), a not-for-profit organisation (4%) or a
licensed club (2%).
Business Type
Base: All fitness organisations (n=312)S1. Which of the following types of organisation best describe your business?Q1. Which of the following best describes your [business/centre]?
30%
13%
7%
6%
5%
3%
28%
Community Centre
Health/Wellness Centre
Gym
Leisure/Aquatic Centre
Fitness Studio
Fitness Centre
Personal Fitness Service
57%
9%
7%
4%
4%
3%
2%
4%
11%
Don't know
Licensed Club
University based centre
Not-for-profit
Company / Part of a Corporate chain
Government Owned
Part of a franchise
Privately owned, multi site
Privately owned, single site
Organisation Type Organisational Structure
Note: Other organisation types <3%
16
Facilities and Services
Facilities
Survey participants were asked whether their business had its own fitness facilities or centre. Overall, the
majority of fitness organisations (74%) have their own facilities, but a significant minority (26%) do not.
These figures are quite different when looking only at personal fitness services. These types of fitness business
are often run out of facilities owned by other gyms/fitness organisations, in fact two thirds (64%) say they
operate without their own facilities…
Table 4: Fitness Facilities
Total (n=312)
%
Personal Fitness Service (n=95)
%
Fitness Centre (n=86)
%
Fitness Studio (n=42)
%
Leisure/ Aquatic Centre (n=23*)
% Gym (n=19*)
%
Health/ Wellness
Centre (n=16*)
%
Own Fitness Facilities 74 36 95 100 87 100 94
No Fitness Facilities 26 64 5 0 13 0 6
Base: All Fitness Organisations *small base size, results are indicative only Q. Does your business have its own fitness facility(ies)/centre
Overall, around two thirds of fitness organisations operate across multiple sites. This split is relatively
consistent across different types of fitness organisations, although Fitness Studios are slightly less likely to be
run across more than one location…
Table 4a: Multi-site Businesses
Total (n=312)
%
Personal Fitness Service (n=95)
%
Fitness Centre (n=86)
%
Fitness Studio (n=42)
%
Leisure/ Aquatic Centre (n=23*)
% Gym (n=19*)
%
Health/ Wellness
Centre (n=16*)
%
Multi Site 36 35 40 14 61 28 40
Single Site 64 65 60 86 39 72 60
Base: All Fitness Organisations *small base size, results are indicative only Q. Is your business a combination of sites and centres?
17
The facilities that are used to run fitness organizations are hugely varied in terms of their size. As part of the
survey, fitness businesses were asked to estimate the size of the facility in which they are based.
A fifth of fitness businesses are based in facilities that are less than 100m2, whilst 11% of businesses are run
out of facilities that are more than 3000m2.
Facility Details
17%
16%
11%
10%
6%
5%
21%
15%
Don't know
More than 5000m2
3001m2 - 5000m2
1501m2 - 3000m2
751m2 - 1500m2
251m2 - 750m2
101m2 - 250m2
Less than 100m2
Facility Size
Base: All fitness organisations (n=312)S4. How large is the facility in which you are based?
18
Non Fitness Services
The range of fitness related services provided by fitness businesses will be explored on the following page of
the report, but the survey also revealed a number of non-fitness related services that are being offered to
customers.
Fitness organisations commonly offer parking (66%) and disabled access (48%), as well as child care (32%),
allied health services (25%) and cafes (21%). These figures are higher amongst those fitness organisations
that own their own facilities…
Services
66%
32%
25%
23%
21%
11%
4%
3%
23%
48%
None
Massage (various)
Solarium
Tennis/ Squash
Cafe
Sauna/ Spa / Steam Room
Allied health services
Child care
Disabled access
Parking
Note: Other services offered <3%
Base: All fitness organisations (n=312)S4. How large is the facility in which you are based? Q6. Which of these additional facilities/services does your [business/centre] offer?
Non Fitness Services Offered
19
Table 5: Non-Fitness Services
Total (n=312)
%
Own Fitness Facilities (n=231)
%
No Fitness Facilities (n=81)
%
Parking 66 79 30
Disabled access 48 58 22
Child care 32 38 14
Allied health services 25 28 16
Sauna/Spa/Steam Room 23 28 9
Cafe 21 26 5
Tennis/Squash 11 14 2
Solarium 4 6 0
Massage 3 4 0
None of these 23 9 63
Base: All Fitness Organisations Q. Which of these additional facilities/services does your [business/centre] offer?
20
Fitness Services
In terms of fitness services, the most commonly provided services are personal training (94%), free weights
(85%) and group exercise (offered by four in five fitness organisations - 81%).
A strong indication of the diversification of the fitness industry is the extent to which wellness services (such as
dieticians/nutritionists) are being made available. Two fifths (40%) of fitness organisations currently provide
these types of services for their customers…
The forms of group exercise offered are also wide ranging. Most common are strength/resistance classes,
flexibility/stretching/ad based classes, boxing/combat classes and circuit classes (all offered by more than 70%
of organisations that provide group exercises).
Fitness Services
94%
81%
76%
75%
68%
63%
58%
40%
21%
16%
85%
Sports facilities
Aquatics
Wellness services (e.g. dietician/nutritionist)
Boot camp/Outdoor programs
Boxing training
Circuit training
Cardiovascular equipment
Resistance equipment
Group exercise
Free weights
Personal training 77%
72%
71%
61%
52%
50%
49%
48%
39%
23%
23%
74%
Aqua fitness classes
Dance related classes
Age specific classes
Outdoor
Cycle classes
Bootcamp
Aerobics
Specialty classes (e.g. Yoga, Pilates, Tai Chi)
Circuit classes
Boxing/Combat training classes
Flexibility/stretching/abdominal workouts
Strength and resistance classes
Services Provided Group Exercise Provided
Q4. Below are a number of fitness related services. Please indicate which of them your [business/centre] provides. Q5a. Which of the following categories of group exercises does your [business/centre] offer?
Note: Other classes provided <1%Base: All fitness organisations (n=312) Base: All that offer group exercise (n=252)Note: Other services provided <4%
21
In terms of the frequency with which classes are run, a quarter (23%) of fitness organisations run, on average,
fewer than five classes per week, one in seven (14%) run over fifty classes in a typical week.
Personal Fitness businesses are smaller and as such run classes far less frequently than larger fitness or leisure
centres. Over half of personal fitness businesses (54%) run fewer than 5 group classes per week, and they
average nine classes per week compared to an average of 35 classes amongst fitness centres.
Across all fitness organisations that run fitness classes, eight out of ten run freestyle classes and half run pre-
choreographed classes.
Number of classes per week
Base: All fitness organisations that offer group fitness (n=252)Q5d. On average, how many group exercise classes does your [business/centre] run per week?
23%
15%
17%
7%
7%
7%
3%
4%
15%
More than 70
51-60
61-70
41-50
31-40
21-30
11-20
6-10
Less than 5
Mean = 23 classes per week
22
Fitness Industry Customers
Sweeney Sports Report
The Sweeney Sports report collects data on sports interest and participation via a telephone survey amongst a
representative sample of the Australian population in major cities. The survey assesses interest and
participation on a wide variety of sports including gym workout and group exercise.
Data for gym workout and group exercise has been collated from the Summer 07/08 Sweeney Sports Report,
with historical data included to illustrate trends over the last three years of reporting.
There is some indication that participation in gym workout and group exercise has dipped in the last three
years, down very slightly from 44% in 05/06 to 38% in 07/08. Participation is highest in Sydney and Brisbane
and slightly lower in Adelaide and Perth. As discussed later in the report, the industry view is that customer
base sizes have been increasing over the last year. The fact that this is not reflected in the Sports Report data
suggests that much of the customer growth is occurring in fitness sectors outside of the more traditional gym
workout or group exercise.
Interest in Gym Workout and Group Exercise
Total Interest Trends% of Australians
Participation Trends% of Australians
Interest by City (Summer 07/08)
44% 39%40%
Summer 05/06 Summer 06/07 Summer 07/08
42% 38%39%
Summer 05/06 Summer 06/07 Summer 07/08
Base: Total Sample Base: Total Sample
00
00
2301
Search Internet
%
00604043Hobart00003838Canberra
03312730Perth00002525Adelaide
22224343Brisbane31533536Melbourne20514447Sydney21423839Total population
Read in Press
%
Listenon Radio
%
Watchon TV
%Attend
%Participate
%
TotalInterest
%
23
The data collected in the Sweeney Sports Report provides a profile Gym and Group Exercise followers by key
demographics…
The sports report confirms the industry view that fitness customers are predominantly female - almost half of
Australian women (45%) participate in either gym workout or group exercise compared to 31% of males.
Amongst women, participation is spread relatively evenly across age groups, assisted by specialist female gyms
(e.g. curves) and classes run to appeal to women in older age groups (39% of organisations that run group
exercise classes include age specific classes). The fitness industry has successfully maintained its appeal
amongst older females – 43% of females aged 45+ attend gym workout or group exercise.
Participation amongst males meanwhile is strong in the 16-29 age group (50%) but drops off markedly in the
45+ age group (15%). A key challenge for the fitness industry will be increasing its appeal amongst this older
male demographic.
Sports Report data also suggests that medium to high income earners are the core market for these types of
exercise. Only a quarter of those living on low incomes participate in group exercise/gym workouts.
Profile of Gym Workout and Group Exercise Followers
Interest by Demographics (Summer 07/08) Interest by Lifestyle Aspects (Summer 07/08)
2
0
2
0
31
11
03
10
04
1
SearchInternet
%
Marital status
Income10224344High33644142Medium
10512428Low
30533940Single
11413234Married/no kids
22314243Married with kids
21514547Total females1161434645+
2050434530-443333505116-29
Females21323132Total males1011151645+
2020363630-442377505316-29
Males
21423839Total population
Read in Press
%
Listenon
Radio%
Watchon TV
%Attend
%
Partici-pate%
TotalInterest
%
201211121213200011112111
2
2222201
Search Internet
%
22524951Regular gamblers00001616Spirit drinkers11333838Beer drinkers11223839Wine buffs1113535Fast food outlet users31524042Cereal eaters21423840Grocery buyers32623941Soft drink buyers32623537Gardeners31414042Do-it-yourselfers21434142Extreme sports fans32666265Gym attendees32746060Cinema goers00503439Optus TV subscribers11414144FOX SPORTS viewers11413942Foxtel TV subscribers21424042Mobile phone users21313940Internet users21323941PC owners12414446CD buyers32625053Fashion followers11314546Restaurant goers11313940Car drivers11413940Home owners
21525555Overseas holiday makers
22524143New car owners31424646Art followers21634144Savers20434446Investors20533840High income earners00004040Business travellers21423839Total population
Read in Press
%
Listenon
Radio%
Watchon TV
%Attend
%
Partici-pate%
TotalInterest
%% in each category who:
24
Customer Profile – An industry view
The Sweeney Sports Report has given us an insight into gym workout from a customer perspective, the Fitness
Industry Profiling Research approaches same topic from a businesses point of view. The story is much the
same…
Given the variety of business models the fitness industry accommodates, it comes as no surprise that there is
considerable variation in the number of customers on the books of fitness organisations.
A quarter of organisations have less than 50 customers, whilst a fifth (18%) say they have more than 2000.
This equates to an average of just over 1,000 customers per fitness organisation with 77% of these defined as
active customers (regularly using fitness services).
The type of business is a key determinant in the size of the customer base of the organisation. Personal Fitness
Services tend to be much smaller (average 238 customers) than fitness centres (average 1744 customers) for
example.
Across all types of fitness organisations, the estimated gender split of customers is skewed slightly towards
females (63%) and those aged 25-44 (59%).
Number of Customers Gender
Fitness Organisation Customers
Base: All fitness organisations (n=312) *Note: small sample size, results are indicative onlyQ8. How many customers in total does your [business/centre] have?Q8b. And what proportion of your customers would you say are male and what proportion would you say are female?Q8c. What proportion of your customers would you say fall into each of the following age groups?
25%
13%
22%
9%
14%
4%
12%
Less than 50
51 - 100
101 - 250
251 - 1000
1001 - 2000
2001 - 5000
More than 5000Age
Male37%
Female63%
5%
30%
29%
13%
14%
10%
Under 17
18 - 24
25 - 34
35 - 44
45 - 54
55+1244Other (n=112)
238Personal Fitness Services (n=95)
1641Gym (n=19*)
1744Fitness Centre (n=86)
Average Number of Customers
Mean = 1,102 customers
25
Fitness organisations in general (67%) feel that their customer base has been growing over the last 12 months
and a quarter of these have experienced a rapid growth in their membership numbers (27% have increased
their membership by at least half). Businesses with extremely strong growth tend to be start up businesses
that have been open for less than a year.
Only one-in-ten fitness organisations have shrunk in size this year and the declines tend to be relatively small
(48% have experienced less than 10% decline). Where businesses have experienced drops in their customer
base, they tend to be organisations that have been in business for a length of time. 17% of businesses that
have been open for more than ten years have seen a decline in customers over the last year.
Annual Change in Customer Base
Fitness Organisation Customers
Base: All fitness organisations (n=312)Q10b. Over the last 12 months, would you say your customer base has increased, decreased or stayed the same?Q10c. By how much would you say your customer base has [increased/decreased FROM Q10B] in the last 12 months?
Stayed the same, 23%Increased, 67%Decreased,
10%
% Decrease
16%
26%
10%
13%
3%
32%
Less than 5%
6 - 10%
11 - 20%
21 - 30%
More than 30%
Don't know
% Increase
9%
17%
24%
9%
18%
22%
Less than 5%
6 - 10%
11 - 20%
21 - 50%
51 - 80%
More than 80%
Base: All with increased customer base ( n=210) Base: All with decreased customer base (n=31)
26
Barriers to Increasing Customer Base
Fitness organisations were asked what they felt the key barriers were to them increasing their customer base.
Their responses have been grouped, quantified and are shown in the graph below…
Key concerns include...
the state of the economy and the effect this will have on consumers willingness/ability to spend their
money on fitness activities…
“Current economic situation is one of the main factors, especially as our facility is in a drought affected area”
“One of the first things that people do in the current financial situation is cutout personal training”
Difficulties exploiting marketing possibilities (a particular difficulty for new start ups)…
“Very small marketing budget and general advertising restrictions. Location away from the main walking beat. The gym manager does, marketing, sales, classes, fitness assessments, programs, floor supervision, admin, etc. Support is available, but we do not have a dedicated sales and marketing team, group exercise manager etc.”
Barriers to Increasing Customer Base
Base: All fitness organisations (n=312)Q10d. What are some of the barriers your [business/centre] faces in trying to increase its customer base?
19%
15%
12%
12%
11%
10%
10%
16%
Location/not a lot of pass by traffic
Lack of qualified staff
Financial concerns/increased cost of living for potential members
Overhead/running costs/budget to maintain premises/ licenses
Cost of advertising
Marketing opportunities/ increasing awareness of what I offer/ finding own
clients
Too much competition
Unstable economy
Note: All other barriers <8%
27
Increasing competition…
“We're in a shopping centre which is attracting the wrong type of clientele and there is a loss of quality enquiries. Local competition is also undercutting price e.g. local aquatic centres recently upgraded and reduced prices”
Increasing costs…
“Increases in running costs, e.g. insurance, utilities, wages and rent. We also have competition from local government run aquatic centres and the big multinational chains. Additionally, there is no government support or funding for providing services such as teens and elderly programs (reduce obesity/improve health of elderly)”
A lack of suitable staff…
“Lack of staff with the qualifications and experience that I want – i.e., tertiary qualifications in exercise science or similar”
These are the sorts of issues that Fitness Australia should be focussing on with their training and initiatives
going forward.
28
Fitness Industry Employees
Employee Profile
Across the industry, 73% of fitness organisations have more than one employee. For each of these
organisations that create employment, there is an average of 30 employees.
Where businesses are run as a single person business, they tend to be Personal Fitness Services – 65% of
these types of fitness companies have no employees.
Although the fitness industry creates a number of Australian jobs, relatively few of them are on a permanent
basis. Casual employees are particularly common – an average fitness organisation (with employees) will have
around half of its employee base made up of casual employees and a further 13% made up of independent
contractors.
Across all types of fitness organisations, an average business will tend to employ more females and have a
relatively high proportion of employees (70%) working under the banner of ‘fitness employee’ (i.e. excluding
admin, reception management etc).
Employment Type Employee Gender
Employees
Employee Role
Female61%
Male39%
Fitness70%
Other30%
Independent Contractors (i.e. staff contracted from business entities to
work with your customers)
Casual (i.e. a staff member that is not permanently employed)
Part time Permanent (i.e. are employed on a permanent basis but work less
than 38 hours per week)
Full time Permanent
% of employees
13
53
17
17
Base: All fitness organisations with employees (n=228)Q11a. You said earlier that you have [INSERT FROM Q3] employees in total, how many fall into each of the following categories?Q11b. Please indicate the proportion of the employees of your [business/centre] that are male and the proportion that are female. Please include all staff as well as contractors.Q12. Please indicate what proportion of the employees of your [business/centre] are fitness employees and the proportion that work only in other capacities (i.e. reception, sales,
management, administration)
29
Employee Qualifications
Almost universally, fitness employees are required to have a minimum qualification. In the majority of cases
this is either a Certificate IV, or a certificate III.
Other qualifications that can be required include exercise science degrees (19%), diplomas (13%) and, less
frequently, post grad degrees (5%).
Employee Qualifications
Q13. Are your fitness employees/contractors required to have a minimum qualification?Q14. What type(s) of qualification , if any, are your fitness employees/contractors required to have?
78%
19%
13%
5%
4%
2%
2%
71%
Post Graduate Degree
Discipline specific qualifications (e.g.
swim coach)
First aid certificate
Seniors first aid
Diploma
Exercise Science (or equivalent) Degree
Certificate III
Certificate IV
Qualifications Required Type of Qualifications
Yes98%No
2%
Note: Other qualifications <2%Base: All employees with qualification (n=223)Base: All fitness organisations with employees (n=228)
30
Membership
Types of Membership
A variety of membership types are used across the fitness industry. Per visit passes are most common (used
by 73% of organisations), followed by multi visit passes (56%) and minimum term memberships (55%).
Where minimum term memberships are offered, they can take many forms and most organisations offer a
variety of minimum term contracts. Two third offer annual minimum term contracts (at an average cost of just
under $700), whilst around half offer six monthly (49%) quarterly (57%) and monthly contracts (47%). Three
in ten (30%) say they offer flexible fixed terms that can be tailored to meet individual customer needs.
Membership Type
A relatively small proportion of fitness organisations (39%) say they charge joining fees
Minimum Term Contracts
Membership
67%
57%
47%
30%
49%
Flexible terms
One month
Three months
Six months
Annual
Q15. What type(s) of membership does your [business/centre] offer?Q16b Please indicate the average price of these memberships in the boxes provided. Q16a. What length(s) of minimum term contract does your [business/centre] offer?
Note: All other contracts <4%
$94
$337
$434
$689
Average Cost
73%
55%
40%
56%
Membership – no minimum term
Membership –minimum term
Multi visit pass
Per visit pass
Average Cost =
$20
Base: All fitness organisations (n=312) Base: All who offer minimum term memberships (n=171)
31
Financial Details
Revenues
Fitness organisations that had been established for over a year were asked how their revenues had changed
over the last 12 months. In line with the growth in customer numbers seen earlier in this report, revenues
have tended to increase over the last year (for two thirds (64%) of fitness organisations).
Financial Details - Revenues
Annual Revenue Sources of Revenue
Base: All fitness organisations in business for at least a year (n=250) *Note: Excluding don’t knowQ18. Please indicate the revenue for your [business/centre] over the last tax year.Q19. Compared to this time last year, would you say your revenue has increased, decreased or stayed about the same?Q20. What proportion of your total revenue comes from the following sources?
Change in Revenues*
43%
9%
3%
6%
39%
Other products / services (e.g. café
sales)
Merchandise (e.g. apparel, supplements)
Casual Visits
Personal training
Membership (including joining fees)
Stayed the same, 24%
Increased, 64%
Decreased, 12%
Base: All fitness organisations (n=312)
5%
18%
23%
39%
14%
$1K - $10K
$10K - $50K
$50K - $150K
$150K - $500K
$500K+
Median Revenue:$300,000
Most fitness organisations (62%) have annual revenues of over $150K, two fifths (39%) have a revenue
exceeding $500K. The median revenue collected over the last year is $300,000.
The main sources of revenue for fitness businesses are membership fees and personal training fees. On
average, these account for around 80% of revenues.
Fitness businesses in general generate only a small proportion of their revenues from merchandise sales.
Unsurprisingly given their size, personal fitness businesses tend to have the smallest revenues, whilst fitness
centres turn over the largest revenues on an annual basis, illustrated in the following table…
32
Table 6: Annual Revenue
Personal Fitness (n=38)
%
Fitness Centre (n=69)
%
Fitness Studio (n=24*)
%
$1K - $10K 21 0 0
$10K - $50K 34 3 33
$50K - $150K 29 9 25
$150K - $500K 8 28 21
$500K+ 8 61 21
Median $40,000 $720,000 $110,000
* small base size results are indicative only Q18 Please indicate the revenue for your business over the last tax year
33
Costs
Most of a fitness organisation’s costs come from either employment costs (33%) or property costs (19%,
including rent, utilities and taxes).
The way in which costs are split is similar across organisation type, however fitness centres have a much larger
proportion of their costs tied up in employment and wages …
Cost Structure
Financial Details - Costs
Base: All fitness organisations (n=270) figures exclude Don’t KnowsQ21 Thinking about all the costs involved in running your [business/centre], what proportion of your total revenue goes towards each of the following types of cost?
33%
10%
9%
8%
6%
1%
6%
7%
19%
Other overheads
Other costs
Franchise fees
Insurance
Marketing
Supplies/consumables
Equipment leasing and maintenance
Property costs (incl. rent, utilities and taxes)
Employment Cost
34
Table 7: Cost Split
Total (n=270)
%
Personal Fitness Service
(n=81) %
Fitness Centre (n=76)
%
Fitness Studio (n=36)
%
Employment cost 33 17 42 25
Property costs (incl. rent, utilities and taxes) 19 18 19 27
Equipment leasing and maintenance 10 9 11 13
Supplies/consumables 9 12 6 9
Marketing 8 11 6 8
Insurance 6 10 3 6
Franchise fees 1 2 1 2
Other costs 6 12 5 7
Other overheads 7 8 4 6
Base: All Fitness Organisations *small base size, results are indicative only Q. Thinking about all the costs involved in running your [business/centre], what proportion of your total revenue goes towards each of
the following types of cost?
35
Profit and Loss
Around half of fitness organisations (54%) have made a profit in the last 12 months, a quarter (27%) have
made a loss.
Organisations that are more established (have been open for more than 10 years) are more likely to have made
a profit, reflecting their experience in the market…
Table 8: Profit and loss
Total (n=312)
%
Open for up to a
year (n=43)
%
Open 1-2 years (n=37)
%
Open 2 - 3 years
(n=29*) %
Open 3-5 years (n=34)
%
Open 5-10 years (n=38)
%
Open for more than 10 years (n=76)
%
Made an operating profit
54 37 46 48 56 58 67
Broke even 19 19 30 17 18 18 17
Made an operating loss 26 44 24 34 26 24 16
Base: All Fitness Organisations *small base size, results are indicative only. Figures exclude don’t knows and refuseds Q. Does your business have its own fitness facility(ies)/centre
Profit and Loss in Last Year*
Financials – Profit and Loss
Broke even, 19% Made a loss, 27%Made a profit, 54%
Operating Loss
60%
9%
9%
7%
12%
Less than $50,000
$50,001 - $100,000
More than $100,000
Prefer not to say
Don't know
Operating Profit
39%
8%
15%
16%
1%
21%
Less than $50,000
$50,001 - $100,000
$100,001 - $150,000
More than $150,000
Prefer not to say
Don't know
Base: All who made a loss (n=68)
Base: All fitness organisations (n=312) *Note: Excluding don’t know and prefer not to sayQ22 Did your [business/centre] make an operating profit over the last tax year?Q23 Please indicate the before tax operating [profit/loss] of your [business/centre] over the last tax year.
Base: All who made a profit (n=140)
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