| KN92054 |
| KEY NOTE Market Report : Health Clubs and Leisure Centres : January 2004 |
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This report covers: Health Clubs and Leisure Centres
| Executive Summary 1 |
| 1. Market Definition 2 |
| REPORT COVERAGE |
| MARKET SECTORS |
| Public Leisure Centres |
| Private Health Clubs |
| Other Fitness and Sports Facilities |
| MARKET TRENDS |
| Improving Health and Tax Incentives |
| Differentiation Between Public Centres and Private Clubs |
| Market Saturation and Consolidation of the Sector |
| Leaving the Stock Market for Private Equity |
| ECONOMIC TRENDS |
| Population |
| Table 1: UK Resident Population Estimates by Sex (000 and %), Mid-Years 1998-2002 |
| Gross Domestic Product |
| Table 2: UK Gross Domestic Product at Current and Constant 1995 Prices (£m and %), 1998-2002 |
| Inflation |
| Table 3: UK Rate of Inflation (%), 1998-2002 |
| Unemployment |
| Table 4: Actual Number of Unemployed Persons (million and %), 1998-2002 |
| Household Disposable Income |
| Table 5: Household Disposable Income (£ and %), 1998-2002 |
| MARKET POSITION |
| The Domestic Market |
| The International Market |
| 2. Market Size 12 |
| MARKET SIZING METHODS |
| The TOTAL MARKET |
| By Revenue |
| Table 6: The Total UK Revenue for the Health Clubs Market by Different Revenue Streams (%), 2000 and 2001 |
| Table 7: Total UK Consumer Expenditure for the Health Club Market by Value (£m and %), 1999-2003 |
| By Membership |
| Health Clubs |
| Leisure Centres |
| Health Clubs and Leisure Centres |
| By Number of Sites |
| By Capacity |
| BY MARKET SECTOR |
| Private Health Clubs |
| By Policies of Market Leaders |
| By Size |
| By Price |
| Public Leisure Centres |
| By Use |
| Types of Exerciser and Equipment |
| Table 8: Reasons for Health Club Membership (%), 2002 |
| By Participation |
| Table 9: Participation in Sports and Leisure Activities by Sex (% of adults), 2003 |
| 3. Industry Background 21 |
| RECENT HISTORY |
| NUMBER OF companies |
| Table 10: Health Clubs and Leisure Centres Opened (number of openings), 1999-2004 |
| EMPLOYMENT |
| Table 11: Average Salaries in the Private Health Club Sector by Job Title (£m and %), 2001 and 2002 |
| REGIONAL VARIATIONS IN THE MARKETPLACE |
| How ROBUST IS THE MARKET? |
| LEGISLATION |
| Table 12: Leisure Management Contracts Managed Privately by Market Share (%), 1992, 1996, 2000 and 2003 |
| KEY TRADE ASSOCIATIONS |
| Fitness Industry Association |
| Institute of Leisure and Amenities Management |
| International Health, Racquet & Sportsclub Association |
| Local Government Association |
| 4. Competitor Analysis 29 |
| THE MARKETPLACE |
| Private Health Clubs |
| Public Leisure Centres |
| Other Providers |
| MARKET LEADERS |
| Public Leisure Centres |
| Table 13: Leisure Management Contractors Association Members by Size and Sites (number of members and sites), 2002-2004 |
| Private Health Clubs |
| Table 14: Leading Private Health Clubs by Membership (number of members), 2001 and 2003 |
| Table 15: Leading Private Health Clubs by Size (number of sites, overseas clubs and members) 2001 and 2003 |
| Cannons Group Ltd |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| Crown Sports PLC |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| De Vere Group PLC |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| Esporta Ltd |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| Fitness First Ltd |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| Hilton Group PLC |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| Holmes Place Holdings Ltd |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| LA Fitness PLC |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| Whitbread Group PLC |
| Company Structure |
| Current and Future Developments |
| Financial Results |
| OTHER COMPANIES |
| Key Standalone Operators |
| Bannatyne Fitness Ltd |
| Clubhaus PLC |
| JJB Sports Ltd |
| Next Generation Ltd |
| Peak Fitness PLC |
| Sona Ltd |
| Spirit Health Clubs |
| Springhealth Leisure PLC |
| The Fitness Exchange Ltd |
| Virgin Active Ltd |
| Hotel Club and Sports Club Operators |
| 3D Leisure Ltd |
| MacDonald Hotels |
| Ramada Hotels |
| Queens Moat |
| OUTSIDE SUPPLIERS |
| Marketing Activity |
| Table 16: Main Media Advertising Expenditure for the Health Clubs Market (£000), Year Ending September 2003 |
| 5. Strengths, Weaknesses, Opportunities and Threats 50 |
| STRENGTHS |
| WEAKNESSES |
| OPPORTUNITIES |
| THREATS |
| 6. Buying Behaviour 53 |
| Penetration of population who belong to a Health Club |
| Table 17: Penetration of Population Who Belong to Health Clubs, Gyms and Sports Clubs (% of adults), 2001-2003 |
| By Sex |
| Table 18: Penetration of Population Who are Health and Gym Club Members by Sex (% of adults), 2002 and 2003 |
| By Age |
| Table 19: Penetration of Population Who are Health and Gym Club Members by Age (% of adults), 2002 and 2003 |
| Table 20: Participation of Health Club Members by Age (% of adults), 2003 |
| By Social Grade |
| Table 21: Penetration of Population Who are Health and Gym Club Members by Social Grade (% of adults), 2002 and 2003 |
| By Region |
| Table 22: Penetration of Population Who are Health and Gym Club Members by Region (% of adults), 2002 and 2003 |
| 7. Current Issues 59 |
| MOVEMENT FROM PUBLIC TO PRIVATE EQUITY AND SALE-LEASEBACK CAPITAL |
| WELLNESS AND SPAS: FROM FITNESS TO HOLISTIC HEALTH |
| PUBLIC-SECTOR DEVELOPMENTS |
| 8. The Global Market 62 |
| INTRODUCTION |
| Table 23: Top Ten Firms† Ranked by Number of Sites Owned, September 2002 |
| Table 24: Top Ten Firms Ranked by Members and Revenue (£m), 2001 |
| THE US |
| Table 25: US Market Size by Membership and Number of Sites (million and number), 1998-2002 |
| EUROPE |
| Table 26: European Clubs Owned by UK Operators, 2003 |
| australia |
| japan |
| 9. Forecasts 70 |
| FORECASTS 2003 to 2008 |
| Table 27: Forecast UK Consumer Expenditure for the Health Club Market by Value (£m and %), 2004-2008 |
| FUTURE TRENDS |
| Demographic Trends and New Target Groups |
| Table 28: UK Demographic Forecast (million), 2003-2007 |
| New Health Clubs and Leisure Centres |
| The Impact of the Olympic Bid, Public-Private Partnerships and Private Finance Initiatives |
| Future Spatial Competition: A European Expansion Race |
| 10. Company Profiles 75 |
| David Lloyd Leisure Ltd |
| De Vere Group Plc |
| Esporta Ltd |
| Fitness First Ltd |
| Hilton Group Plc |
| Holmes Place Holdings LTd |
| LA Fitness Plc |
| 11. Further Sources 90 |
| Associations |
| Publications |
| Bonnier Information Sources |
| Understanding TGI Data 93 |
| Number, Profile, Penetration |
| Social Grade |
| Standard Region |
| Key Note Research 95 |
| The Key Note Range of Reports 96 |
| The UK market for health clubs and leisure centres was worth £3.19bn in 2003. This market is divided into public and private provision for health and sports services, with public leisure centres focused on cost-efficiency and private health clubs struggling to continue to operate successfully in tough market conditions. |
| In 2003, all the formerly listed standalone health club operators, except LA Fitness exited the equity markets. Since the economic downturn in 2001, demand for health club services has been outpaced by expansion in facilities, and operators in the past year have found it difficult to sustain the same levels of growth seen between 1998 and 2000. Share prices have fallen and many operators have been bought out at relatively low prices. Continued growth in the sector will now be more reliant on private equity and capital generated from sale and leaseback deals. |
| The key underlying drivers of demand — rising incomes and growing awareness of the importance of a healthy lifestyle — remain robust and the medium-term prospects for the sector remain optimistic. However, among public sector operators, the complexity of executing Private-Public Partnerships (PPPs) and Private Finance Initiative (PFI) deals has slowed the pace of development, while the numerous receiverships in 2002 and 2003 leave the UK market vulnerable to entry from a foreign competitor through the acquisition of sites at low prices. |
| European expansion slowed down in 2003, while many UK companies focus on consolidating their existing positions and try to improve operational control. Europe remains the key area for future growth as the number of prime sites in the UK diminishes and the relatively underdeveloped European market offers greater potential returns. Development in Europe is likely to be a two-way process, as operators learn more about the European spa and wellness culture and develop their UK offerings to offer a broader spectrum of value-added services. |
| Overall, prospects for the industry remain strong, despite the difficult trading conditions in 2003, with robust levels of site development planned for 2003 to 2004. |
| Forecasts for the market confirm that it is set to grow by 15.5% over the period 2004 to 2008, outpacing the growth in general consumer spending. Initially, forecasts for new site development are contrary to this view, suggesting that health club development will fall from 95 in 2003 to 59 in 2004 and new leisure centres will remain below trend at 49. However, a longer-term perspective, looking at forecast openings over the period 2004 to 2008, shows that there will be an increase in the number of new sites, with an especially strong rise in the private sector. |
Text © 2004 Key Note
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Last updated by Amanda Porteous 2004
