OPERATOR PERSPECTIVE
OPERATOR PERSPECTIVE
2023 revenues were up 55 per cent on 2019, and we’re expecting 2024 revenues to be up 30 per cent on 2023
We’re performing strongly in our financials too: 2023 revenues were up 55 per cent on 2019, and we’re expecting 2024 revenues to be up 30 per cent on 2023. Our new clubs play a big part in that, of course, but like-for-like growth is also in the double digits. Meanwhile, membership numbers are back to where they were pre-COVID, but yield is higher, with strong secondary spend translating through to our margins and profitability. However, for Third Space it isn’t just about growth. Our mantra is: ‘We get better as we get bigger.’ Tell us more… Getting better is about constant evolution rather than revolution – small changes that all add up to fairly significant change over time. First and foremost, it’s about listening to the customer and responding to what they want. Opening new clubs gives us a perfect opportunity to try new things, but we’re also learning from that and, more than ever before, using every square inch of space to retrofit popular offerings into our existing clubs.
Our current headlines are in line with sector-wide trends – less cardio, more strength and free weights, more mind-body, more wellness and relaxation – but the programming that sits behind this is also key. We’re seeing unprecedented demand for things like Learn to Lift courses, educational sessions on topics such as periodisation of training, and soundbath classes. We didn’t have soundbaths at all pre-lockdown. Now we have 200 a month across our estate – averaging one a day per club – and they’re at 85 per cent occupancy. This increased breadth of offering is certainly part of the reason for a rise in attendance levels. Average visit frequency is up 10 per cent on this time last year, and 15 per cent on pre-pandemic levels, with members typically coming to the club three or more times a week. They now come for recovery as well as intensity, so they come more often. Half of all visits are for group exercise: we deliver boutique-quality group exercise as part of your membership, with bespoke spaces, immersive experience and signature programming led by a master trainer in every discipline. However, although the timetable at each club features 200–300 classes a week, we believe in
COLIN WAGGETT
Third Space is getting better as it gets bigger, says its CEO – and exciting opportunities are there for the whole sector if it focuses on quality
Clubs in clubs, such as Brazilian jiu- jitsu, enhance the sense of community
What’s the news from Third Space? We’re on a strong growth trajectory: we currently have 10 clubs, will open three more in 2024 and are confident of opening a further three or four in 2025. This will bring us to where we always expected to be by the end of 2025, when we were five-year planning pre- pandemic; most of the sites we’re opening now were already being worked on in 2018–2020. It’s just that rather than five years of steady growth, we had a two-year hiatus as we de-risked and slowed down, followed by three years of frantic activity!
We’re also working on our pipeline for 2026 and 2027. That’s helped by the fact that we’ve achieved anchor tenant status among landlords, who now believe any mixed-use development must include fitness. If it’s a London-based, premium mixed-use development and we like the catchment and the terms on offer, we have a pretty good shot at getting the space. We’re even asked where we want to be and what sort of space we’d like before building work starts.
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STATE OF THE UK FITNESS INDUSTRY REPORT 2024
STATE OF THE UK FITNESS INDUSTRY REPORT 2024
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