OPERATOR PERSPECTIVE
OPERATOR PERSPECTIVE
What’s driving your strong performance? We recovered quite quickly from COVID, which I put down to a number of factors. We have a good, stable senior management team that’s been in place for a long time. We have good relationships with the vast majority of our 69 local authority partners, which allowed us to quickly have conversations about how to work together and mitigate costs while we were closed. We had a skeleton staff in our centres at all times, so we were able to react fast when we were allowed to re-open. And, although it’s evolved a lot since, we managed to get Everyone On Demand – our digital platform – live within two months. The pandemic probably moved us on 10 years in terms of the digitalisation of the business. All of this gave us a head-start, and over the past 12 months that’s given us a real competitive edge. Typically, around 20 contracts a year might come out to bid on, but over the last year, not many of our competitors have actually been bidding much. Now it’s back to normal, with everyone bidding, but for 12 months we had a really good
opportunity in terms of growth and new contracts – all off the back of recovering well from the pandemic. Our handful of central London sites – Westminster, for example – are still not quite where they were pre-lockdown, but all other centres are performing significantly better than pre-COVID. Meanwhile, Everyone On Demand has gone from strength to strength: it now has around 25,000 regular users. Going back to our increased yield, there’s another factor I haven’t mentioned yet, and that’s our eight Fortis studios. Located within larger Everyone Active centres, these boutique-style spaces don’t have to pay standalone rent for the space, so economically they work very well. Classes are an add-on – or included in the new Platinum membership – and again, offer members something completely different from what you’d find in a typical leisure centre. Last but not least, I’d have to say we’re just good at what we do – sales, retention, innovation, lots of different activities – and we bid well.
Both images: Everyone Active has partnered with Health Hero, which guarantees a telephone or video GP appointment within 24 hours
What’s the industry-wide picture? Local authorities are under great financial strain, with a few even issuing a section 114 notice, which effectively means bankruptcy. As a result, many are looking to offload more services: golf, libraries, theatre – anything that isn’t statutory. There’s definitely a greater variety of services coming to the market to bid on. They’re having to make a difficult decision: close facilities, or somehow generate more income to keep them open. They’re turning to the leisure management contractors to drive better value for money and keep them open. Of course, some local authorities are going the other way and insourcing, bringing everything back in-house: Tower Hamlets and Lambeth from GLL, Southwark from Everyone Active. They will have their reasons, but I do wonder if it’s politically- and ideologically-driven. Certainly it doesn’t seem logical from a financial perspective, because it absolutely will cost them more: a cabinet report for Southwark suggested it will cost the local authority £2.5m more a year to run leisure services in-house than to have Everyone Active run those services for them – and they’re insourcing everything, not just leisure. All while they have a large financial black hole to fill. It just doesn’t make financial sense to me. As the political map inevitably changes again over the coming years, I can quite imagine that local authorities – realising the huge cost of insourcing – will go full circle and outsource again. What next for our sector? Mental health is now even more important to people than physical fitness, so we need to look at what we can offer here. At Everyone Active, we’re already working with a couple of apps to see how we can integrate mental
health into our Everyone On Demand platform. We’re also looking at how we communicate with our members about recovery, spa and relaxation. All of this could be the holy grail: the way to finally surpass 15 per cent penetration and reach a wider audience.
We recovered quickly from COVID, which gave us a head-start in terms of growth and bidding for new contracts
It needs to be commonplace for GP surgeries to be in leisure centres, and for GPs to prescribe exercise that’s delivered by the gym
And then what I’d like to see: a joined-up approach within local authorities. At the moment, although people are starting to appreciate the health contribution of physical activity, local authorities still procure health on the one hand – weight management, diabetes prevention programmes and so on – and leisure on the other. Health and leisure budgets are still separate. What we really need is for local authorities and central government to drive joint procurement, so it’s commonplace for GP surgeries to be in leisure centres, for GPs to prescribe exercise, for the programmes to be delivered by the gym. This also needs to be normalised for consumers, and once again this can be led by local authorities in terms of how they procure. If we get this right, the opportunity will be huge.
Fortis is Everyone Active’s in-house boutique-style brand, with eight studios currently operating within larger centres
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STATE OF THE UK FITNESS INDUSTRY REPORT 2024
STATE OF THE UK FITNESS INDUSTRY REPORT 2024
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