A profile of the New Zealand Fitness Industry [article]

What makes up the New Zealand Fitness Industry?

The fitness industry in NZ is made up of around 300-360 club operators and an unknown yet substantial number of personal trainers with either studios, or home-based, or outdoor based businesses.  On average there seems to be 11-15 employees (not including group fitness instructors or self employed Personal Trainers) in a workplace and if you remove the ‘big players’ (larger clubs including chains and some of the large stand alone operations) the average is closer to 6-8.  Turnover in the industry is estimated at around $160 million although some of the latest estimates put turnover at around $250 million.

There is a large number of Personal Trainers in the industry.  There appears to be about a  50/50 split between employed and contracted trainers.  A typical ratio of one trainer for every two hundred members is maintained in most clubs although this varies widely depending on club demographics and services.

The number of group fitness instructors is significant (far outweighing the gym instructors) as the delivery of a timetable (usually between 10 and up to 40 classes a week) requires large numbers of mainly part time contractors often co-ordinated by an employee.

In total it is estimated that fitness employees and contractors number somewhere between 4000-5000.

Businesses in the New Zealand Fitness Industry

What ‘market space’ does the industry occupy?

Fitness clubs offer a wide range of solutions to members, some of which include weight loss, muscle toning, cardiovascular fitness, stress management, and injury prevention/rehabilitation. 

Fitness clubs compete for customers with each other, and with any other organization that delivers solutions that meet the same needs.  In weight loss alone this would include;

The market for health and fitness is huge, but the competition is also significant.  It’s important to identify what the unique selling points (USPs) are of the fitness industry when compared to many of the other solutions offered to customers.

Some of the unique things about health and fitness clubs (and the professionals that work in or around the industry) are:

1. Trained and qualified staff – the fitness industry has some of the most highly trained people of any organization in this market space.  The trainers of the elite come from our industry as do many of the new products and approaches.  Fitness staff require a broad skill set that enables them to be of greater value to their customers than many of the competitors in this market space. 
2. Follow up and follow through – our industry is fed by retention and should have a focus on helping members attend, adhere and rejoin.  Where virtually all other products or services in our market space ‘sell once’, in our industry we must convince a customer to come back again and again.  This is difficult, however once we accomplish it, we will have a repeat customer for many years to come.  We are also more likely to have ‘advocates’ (who will endorse and openly refer new members to our clubs).
3. Variety – we offer a wide variety of exercise opportunities ranging in type, level of supervision, demographic make up (all womens for example) and fitness focus.
4. Range of service levels – we offer customers the ability to purchase more service if they want it providing everything from group fitness instruction, to fitness consultancy, to personal training.
5. Sense of community – we have people exercising together and our staff can help people enjoy each others company and feel like they belong.
6. Adaptable solutions – we offer people the opportunity to change their goals, achieve one thing and then try another.

So whenever a potential customer ‘comes to action’ we are just part of the landscape of opportunities open to them.  Our uniqueness highlighted by the ‘USPs’ above can be our strength if we consistently communicate and deliver them.  If we don’t we fall back into the mix and on a ‘sales’ or ‘product alone’ basis we lose our uniqueness.  Most of what we are able to do to set ourselves apart as an industry revolves around how we look after our customers.

IHRSA (International Health Racket Sports Association) in a report in the late 90’s identified that the ‘churn and burn’ approach to membership sales was a real challenge for the industry as it naturally built up animosity in the customer base and it was expensive to maintain (it costs five times more to find a new member than retain one).  Given 50% of all new club members were previous club members somewhere else (who’d moved or were trying again) the ‘burning’ of members is not a good long term strategy.  Again, our focus as an industry, whether a PT in a studio, large club, group fitness solution, or boot camp in the park, needs to be on participation and ongoing support of customers.

What are New Zealand’s current activity levels like?

There is no shortage of evidence that fitness clubs should be popular in the future, if they are well set up and staffed.  The ‘obesity epidemic’ and the ‘time poor’ (busier lives with less ‘spare’ time) situation that is evident in today’s modern society is now truly upon us.  SPARC (sport and recreation New Zealand) gives the following picture:

Intent to be more active:  Among adults, 57% would like to spend more time taking part in sport and active leisure. Men and women are equally interested in being more active but for those adults aged 65 years or over levels of interest in being more active decreases to 32%.

Club membership: Around a third of New Zealand adults (36%) who have participated in a sport or physical activity in the last four weeks are currently active members of a club (sporting) or gym. Men are more likely to be sport club members than women (41% and

31% respectively).

Health club membership alone:  It is estimated that around 8-9% of New Zealanders hold gym memberships at any one time.  That’s around 400,000 members today.

How healthy is New Zealand’s body weight?

In research looking at the ‘obesity epidemic’ the Ministry of Health reports the following:

• 17 percent of all New Zealand adults are obese. An additional 35 percent of all adults are overweight. So, half of the New Zealand adult population is either overweight or obese. 
• Obesity in New Zealand increased by 55 percent between 1989 and 1997.
• Based on current data, obesity will increase by an estimated 73 percent by 2011, to 29 percent of all adult New Zealanders.
• In 1996 the annual cost of obesity was conservatively estimated to be $135 million. This figure excludes downstream health costs from chronic diseases that result from obesity.
• The health care cost of diabetes alone is an estimated $280 million per year. The cost of coronary artery disease was an estimated $306 million to $467 million in the early 1990s.
• More than 1,000 New Zealanders die each year from obesity-related diseases – double the annual road toll.

What is the Fitness Industry’s structure in New Zealand?

A representation of the overall structure of the fitness sector