OPERATOR PERSPECTIVE
OPERATOR PERSPECTIVE
What next for our sector? In a sector that uses a subscription model, it’s easy to obsess over retention and sales. It’s easy to resort to discounting, especially with aggregators very active in our market. But we need to move away from this mindset to focus on quality – on continually making our product better and better – and we need to be confident in the value of what we offer. Think about it in terms of a restaurant business. If a restaurant resorts to discounting, its generally because it’s not very good and therefore not full. People will go to restaurants if they’re good. In the end, there will always be attrition in our sector. Life sometimes gets in the way. People move house. They fall off the wagon. But if you have a great product and you let them leave well, not enforcing harsh contracts, they’re
quality over quantity, with a limited number of signature programmes all led by fewer, better, mostly fully- employed instructors to build strong communities. Clubs within clubs further enhance our sense of community: a Brazilian jiu-jitsu club where you can get your belts and grading, a Strava club for cycling events, a Hyrox club where people train together and then compete. We’re focused on ensuring our spaces can cater for all of these. What’s the industry-wide picture? Going back to my earlier point about landlords seeing fitness as a must-have, this is beneficial for the whole industry. Third Space won’t be the right fit for every development: depending on the target audience, a boutique or a low-cost gym might work better. The point is – especially with many large retail tenants no longer around – our sector is in a strong position to achieve good real estate. Our sector has also benefited from the way boutiques encouraged people to reconsider what good fitness should cost. When combined with the tailwinds across the sector – the experience economy, a wearables-driven awareness of health, a prioritisation of time as well as money to fitness and wellbeing – we’re in a stronger position than ever.
likely to return; 80 per cent of those leaving Third Space say they will consider coming back. Crucially, making the product better is about delivering what consumers want. And increasingly, they don’t want body transformation. They want health and happiness. So it’s frustrating to see elements of our industry still pushing weight loss, particularly when even the media is now promoting the broader benefits of being active. As a sector, we have to change our language and our imagery. We have to speak the language of the consumer. The return, with consumers now committed to spending more on their wellbeing, will be additional margin to reinvest in our products and facilities, so we can keep pace with the market and keep improving the quality of our offering.
We’ve seen lots of closures over the past few years, but for the most part these clubs weren’t the strongest. Some are now in the hands of better-run, better-funded operators. And overall, the UK’s fitness supply base is leaner and fresher than ever – cleaner, clearer, better defined and differentiated to give consumers more choice. From the figures I’ve seen from other businesses, it feels like everyone is having a pretty good time of it.
Third Space didn’t run any soundbath classes pre-lockdown. Now it has 200 a month across its estate, at 85% occupancy
Making the product better is about delivering what consumers want. And increasingly, they want health and happiness.
The UK’s fitness supply base is leaner and fresher than ever – clearer, better defined and differentiated
People’s triggers are changing, too, with mental health the new motivation. And the media is now full of wellness, with headlines telling us that pretty much whatever our problem, exercise will help. This is the very helpful consumer context within which we find ourselves. It’s a stark contrast to a couple of years ago when, faced with a cost of living crisis, the media was as usual predicting mass gym cancellations. As always, they were proved wrong. Just imagine what’s therefore possible when the cost of living is behind us – especially given the process of creative destruction the fitness supply base has been through.
Members now come to Third Space for recovery as well as intensity, which means they come more often
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STATE OF THE UK FITNESS INDUSTRY REPORT 2024
STATE OF THE UK FITNESS INDUSTRY REPORT 2024
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