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Mon 19 Nov 2007 04:59 PM

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Watch and learn

The International Health, Racquet & Sportsclub Association's 2007 Global Report reveals a fitness industry at varying levels of maturity. So what can operators in the Middle East learn from the findings?

The global health club industry is represented by more than 98,000 facilities, 107 million members and revenues of US $55.7 billion across 45 countries worldwide.

Impressive figures, until you consider the fact that, according to the World Health Organisation, one billion people across the globe are obese, with at least 300 million of these individuals considered to be clinically obese. This means that, for the first time, the number of overweight people is greater than the number of those who are malnourished.

Operators need to show they are aware of trends across the industry globally.

Add to this the relatively low penetration rates still suffered by the industry, ranging from 17.6 % of the population participating in fitness in the Netherlands to just 0.01 % in India, and the growth potential is clear.

"Within these challenges lies a tremendous opportunity for the global fitness industry," says Kathleen Rollauer, senior manager research at the International Health, Racquets & Sportsclub Association (IHRSA). This is particularly true for the industry in the Middle East, which - though experiencing a shift away from exclusive hotel gyms with the entrance of international health club chains such as Fitness First and Gold's Gym International - is still very much in its infancy.

As a result, the region is yet to be included in the 2007 IHRSA Global report. Turkey, however, does feature as part of research into the European market, as do neighbouring Asian countries such as India, China, Thailand, Malaysia, Japan and Indonesia, which were included for the first time this year in an Asia-Pacific report conducted for IHRSA by Deloitte & Touche GmbH. South Africa was also included for the first time in the Global Report.

Cathy McNeil, vice president of international operations for IHRSA, explains: "While Turkey is included in the Global Report, the club market in the Middle East is relatively undeveloped in comparison with other countries throughout the world. Our European Market Report itself is only in its third year of publication.

"As an organisation, our international publication efforts have to date been concentrated primarily on Europe and the Asia Pacific region. While we do have member clubs in the Middle East, we have not yet expanded our research to that area, and it does remain to be seen when that may come to fruition."

As the market begins to develop here, it is therefore important for operators and suppliers in the region to look at the state of the industry in the countries closest.

Looking at the detail

In India, there are 970 fitness clubs and a total of 1.07 million members paying an average monthly membership fee of US $30-40, resulting in an estimated market size of US $450 million (including secondary spend.) This needs to be compared to figures for the industry leaders such as the United States and United Kingdom, which report total industry revenues of US $17.6 billion and US $5.8 billion respectively.

Vikram Bhatia, managing director for Fitness First India, says one of the challenges in growing the Indian market is a lack of public awareness about the benefits of exercise.

"In India, there are inadequate organised initiatives or investment in educating the public about the benefits of exercise, which affects the interest in fitness," he says. "Fitness is considered a necessity only if an individual plays a sport; it is not considered to be a necessary part of a healthy lifestyle."

The need to educate and engage the public is widespread across the fitness industry, and operators in the Middle East need to rank it as being as important as developing new facilities.

Dave Pickering, founder and CEO of US-based Preventure, advises: "One of the single greatest opportunities that club operators are missing is that they are marketing fitness instead of marketing solutions to specific diseases and illnesses."

Even in Japan, which is leading the Asian market with US$3.6 billion in total industry revenues and 2000 clubs, only 2.7% of the population are members of a health club.

Tomoko Iwai, vice president of Club Business Japan, says: "The rise in rents because of competition in some areas, the need for quality health club personnel and the recovery of the economy are all factors which will determine if we can increase that penetration rate."

Finding qualified staff is also a challenge in China, and one that will be familiar to operators across the Middle East. Kenny Wong, president of the Asian Academy for Sports &Fitness Professionals, says: "It is a challenge in China to find qualified and professional personnel to supply the demand from the fast growing industry."

According to the IHRSA Global Report, China has 1.01 million members across 800 clubs and total revenues of US $364. However, it has a penetration rate of just 0.11%.

Moving closer to home, the report reveals the following statistics for the market in Turkey: industry revenue of US $237; 1,300 health clubs; 350,000 members; and a penetration rate of 1.7%, which compares favourably to the country's Asian neighbours.

Operators across the region, therefore, need to follow this example, and focus on attracting members to the industry and the new clubs being built in the Middle East . These facilities may come from both home grown companies and abroad.

Indeed, as some markets in Europe and US near saturation in terms of the number of clubs, many international operators may focus their growth efforts on the region - hence the introduction of Fitness First and Gold's. Operators need to show they are aware of research, trends and issues across the industry globally and demonstrate that they're ready to embrace them here.

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