Prior to the COVID-19 outbreak, businesses in the Gyms and Fitness Centres industry in Australia thrived, due to an increased concern about health conscious and active lifestyles over the past five years. However, numerous factors have contributed to a harsh decline in the industry’s revenue as a result of the COVID-19 pandemic, with revenue expected to fall by 5.8% in 2020-21. Despite this drastic fall, major players within the industry have thrived in previous years, and the outlook for Australia’s health and fitness sector is promising as the country begins its recovery from the COVID-19 outbreak.
Difficult operating conditions
The Gyms and Fitness Centres industry within Australia industry is composed of health clubs, fitness centres and gymnasiums – all businesses that suffered significantly due to mandated lockdown periods. During Australia’s fight against the COVID-19 pandemic, stringent lockdown measures included:
- Reduction in trading hours
- Certain months requiring gyms and fitness centres to close completely
- Limitations on number of patrons allowed in establishments
Although operating restrictions on businesses have gradually eased, other factors have also negatively affected the industry. The Government’s JobKeeper and JobSeeker support schemes boosted discretionary income levels in 2019-20. However, negative consumer sentiment and economic uncertainty contributed to limited household spending on non-essential items, including gym memberships, which typically account for 57.3% of industry revenue. With the end of the government schemes in March 2021, the national unemployment rate is anticipated to rise, further limiting industry demand.
Industry participation
Despite poor overall industry performance over the past five years, major players have outperformed the industry over the same period. Anytime Australia Pty Ltd is the ultimate holding company to Anytime Fitness, a multinational budget gym franchise that is expected to grow steadily at an annualised 3.0% over the five years through 2020-21. The company has been one of the fastest growing franchises Australia wide, despite a fall of 17.6% in revenue during 2019-20 attributable to the COVID-19 outbreak. Additionally, F45 Aus Hold Co Pty Ltd, which makes up 9.1% of the industry’s market share, has also reported strong performance growth, with revenue expected to rise at an annualised 5.6% over the five years through 2020-21. The company focuses on high intensity 45-minute interval training and operates in over 550 locations in Australia.
Rebuilding
As COVID-19 restrictions are fully lifted and the Australian economy recovers over the coming years, the Gym and Fitness Centres industry is forecast to grow at an annualised 5.9% over the five years through 2025-26, to $3.0 billion. This trend will likely be supported by membership numbers increasing, as population growth and continued health consciousness among Australians boost demand for Gyms and Fitness centres nationwide.
IBISWORLD industry reports mentioned in this release:
