2008 The IHRSA
European Market Report: The size and scope of the health club industry
The IHRSA European Market Report 2008
In cooperation with
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EDITORS Jay M. Ablondi Executive VP of Global Products, IHRSA Katie Rollauer Senior Manager, Research, IHRSA Hans Muench Director of IHRSA Europe Melissa Rodriguez Manager, Research, IHRSA Stefan Ludwig Senior Manager, Deloitte & Touche, Leisure Cathy McNeil VP of International Operations, IHRSA Alison O’Kane Assistant VP of International Operations, IHRSA ©COPYRIGHT 2008 INTERNATIONAL HEALTH, RACQUET & SPORTSCLUB ASSOCIATION All rights reserved. No part of this publication may be reprinted, reproduced, stored in a retrieval system, or transmitted in any form or by any means—electronic, mechanical, or otherwise—without the express permission of IHRSA. To order copies of this publication or other IHRSA publications, contact: IHRSA 70 Fargo Street Boston, MA 02210 USA +1-617-951-0055 +1-617-951-0056 (FAX) http://www.ihrsa.org
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Table of Contents Acknowledgements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Abbreviations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Assumptions and Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Overview of European Fitness Market. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Europe vs. USA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Market Size. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Members. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Membership Penetration Rates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Market Share of Leading Players . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Average Commercial Club Monthly Membership. . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Market Potential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 GDP per capita. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Unemployment Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Fitness Chains in Europe. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 M&A Deal Activity in the European Health and Fitness Market. . . . . . . . . 22 Demographics: Who Joins Clubs?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 European Markets Austria. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 Belgium. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Denmark. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Finland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 France. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 Germany. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 Greece. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 Ireland. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 Italy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 Netherlands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 Norway. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 Portugal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 Spain. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 Sweden. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 Switzerland. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 United Kingdom. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Emerging European Markets Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 Market Profiles. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
About Deloitte. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 About IHRSA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
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Acknowledgements We would like to thank the following persons and organisations who offered us a sound foundation to develop this most up-to-date booklet about the European Health and Fitness Market:
Country Markets Paolo A. Adami (FIAF/Italy), Jesper B. Christensen (DFHO/Denmark), Donatas Cibulskis (Gfitness/Lithuania), Kilian Fisher (ILAM/Ireland), Kuznecovs Gints (Gfitness/Latvia), Anatoli Grigorenko (YLab/Sweden), Eve Hekanaho (SKY/Finland), Theo Hendriks (The Sports & Leisure Group/Netherlands), Jana Kallas (Planet Fitness/ Estonia), Ari Katajisto (Kuntosali & Fitness/Finland), Paul J. Kuebler (Gold’s Gym International/East Europe), Michal Lachowicz (Reinhold Lifestyle/Poland), Mikel Urdangarin Libaert (Fundación Estadio S.D./Spain), Sulev Lipp (Status Club/Estonia), Antonio Macias (AGAP/Portugal), David Minton (The Leisure Database Company/ UK), Daniel Müller (Face Czech/Czech Republic), Rune Nilsson (Fysiopartner/ Norway), Erik Odegard (Gold’s Gym/Norway), Kemal Ozdes (EKS/Turkey), Karol Pecze (MAXFIT Health & Fitness/Slovakia), Maria Angeles de Santiago Restoy (Sport Managers SSLL/Spain), Michel Rota (UFBS/France), Gerhard Span (Manhattan Fitness/Austria), Martin Steinhauer (SFCV/Switzerland), Cem Üner (Fitnessturk/Turkey), Stanley van Duykeren (Emotion Fitness/Hungary), John van Heel (EFAA/Netherlands), Eric Vandenabeele (De Fitness Organisatie/Belgium), Davide Venturi (Il Nuovo Club/Italy), Anastasia Yusina (STRATA Partners/Russia), Central Park Praha, Christophe Anderson (FHRSA), Fitness Solutions s.r.o., FitVak!, IFAD
Special thanks to Matrix Fitness Systems for their generous support of this research.
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Foreword IHRSA’s fourth annual European Market Report continues to serve as an indispensable resource for the health club industry and the investment community. With statistics and analysis on individual European Union markets, this report is also a useful resource for anyone interested in understanding the trends and drivers fueling the industry’s impressive growth in Europe. We are pleased to deliver this year’s report with additional analysis and commentary from earlier reports. This report features annual consumer tracking by GfK along with an analysis of consumer trend changes over the past three years. Deloitte provided analysis through individual articles on leading health club chains and notable business-to-business transactions. We are grateful to GfK and Deloitte for serving as our partners in European fitness market research, and to IHRSA’s many strategic partners and members in Europe who have contributed to this report. We also extend a special thanks to our sponsor, Matrix Fitness Systems. New to the 2008 report is detailed information on the individual fitness market and industry trends for each of the leading European countries. Also new is a detailed breakdown and analysis of the health club industry in Bulgaria, one of the emerging European markets. The European health club industry is poised for continued growth; nearly 38 million Europeans are already health club members. As this report shows, trends in consumer participation, a stable European economy, solid club-company development, and potential incentives from government and private insurers should facilitate growth and prosperity in upcoming years. We are confident that the 2008 IHRSA European Market Report will aid those working to grow their businesses, and the industry, in Europe. Further, this report demonstrates that the health and fitness industry is an important contributor to the European economy. In addition, our industry works to improve the health and wellness of millions of people each and every day—a fact we can all take pride in.
Jay Ablondi
Hans Muench
Katie Rollauer
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Abbreviations e
Euro currency
$
US dollar currency
AGAP
Associação de Empresas de Ginásios e Academias de Portugal
CAGR
Compound Average Growth Rate
CIA
Central Intelligence Agency
DFHO
Dansk Fitness & Helse Organisation
EIU
Economist Intelligence Unit
EU
European Union
EFAA
European Fitness and Aerobic Association
FHRSA
French Health, Racquet & Sportsclub Association
FIAF
Federazione Italiana Aerobica e Fitness
GDP
Gross Domestic Product
GfK
Gesellschaft für Konsumforschung
H&F
Health and Fitness
IHRSA
International Health, Racquet & Sportsclub Association
ILAM
Institute of Leisure and Amenity Management
incl.
Including
IPO
Initial Public Offering
M&A
Mergers and Acquisitions
mill. or m
Million
n/a
Information not available
OECD
Organisation for Economic Co-operation and Development
SFCV
Schweizerischer Fitnesscenterverband
SNELM Syndicat National des Entreprises exploitant les activités
physiques récréatives des Loisirs Marchands
4
sqm
Square meters
UFBS
Union patronale Fitness, Bien être et Santé
UK
United Kingdom
US
United States
VAT
Value Added Tax
Vs.
Versus
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Assumptions and Definitions Country Data
All data regarding the Country Profile has been provided through the CIA World Factbook website and Economist Intelligence Unit (EIU). GDP data for the individual countries was converted from Dollar ($) currency into Euro (i) currency with the exchange rate of December 31st, 2007.
Total employees
Numbers of total employees of the local fitness industries were provided by experts in the respective countries. The number relates to headcounts rather than full-time equivalents and accordingly are composed of permanent staff, trainees, instructors and trainers, and part-time employees.
VAT rate (fitness)
VAT rate for fitness is based on the general country VAT rate, except for Belgium with 6%, Finland with 8%, Netherlands with 6%, and Spain with 7%, respectively.
Corporate tax rate
Corporate tax rate means the average corporate tax rate of the respective country as per fiscal year 2007. The corporate tax rate can vary within a country due to special criteria such as legal form of the corporation, amount of income generated, industry in which the company is involved and specific payment conditions.
EU27
When talking about the European Union or the EU27 countries, this term describes the members of the European Union by 31 December 2007, including new members Bulgaria and Romania, which joined on 1 January 2007. The EU27 consists of Austria, Belgium, Bulgaria, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom + economic data but no fitness data from Cyprus, Luxembourg and Malta.
Total Europe
Total Europe describes the EU27 countries plus Norway, Switzerland, Turkey (twelve largest cities) and Russia (thirteen largest cities).
Fitness chain
A Fitness chain is defined as an operator of more than three fitness clubs with more than 5,000 members in total. continued
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Assumptions and Definitions
6
(continued)
Fitness club
A Fitness club is defined as a facility that contains a H&F room with resistance training and (optional) cardiovascular equipment. The facility must be open to the general public on either a pay per visit or membership basis.
Market Size
Market size of the local fitness industries was estimated by the following calculation: Average price incl. VAT per month x 12 x number of members. Secondary spending not included.
Member
A member is defined as a person that has a paid membership (monthly or annually) to a fitness club.
Penetration rate
Share of the total population of a country which is a member in a fitness studio. In case of Russia and Turkey only the population of major cities was used in the calculation to enhance comparability. The thirteen largest cities with more than one million inhabitants, totalling a population of 27.6 million was used for Russia, the numbers for Turkey were derived from the twelve largest cities with more than 500,000 inhabitants, totalling 19.7 million.
Secondary spending
Additional merchandise sales such as cosmetics, sportswear, food and beverages, etc. Secondary spending was calculated by market size x 10%. The 10% share was based on professional estimates received from industry specialists.
Leading Players
Selection and ranking based on the number of clubs the individual club chain operates.
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Overview of European Fitness Market
The following table compares the European and the US H&F markets. In order to compare the data—specifically the penetration rates—and to comment on the growth potential, the different infrastructure of public and commercial health clubs in these countries as a whole have to be taken into consideration. However, one major eye catcher seems to be the significant difference in memberships and penetration rate despite a similar number of fitness clubs in the two markets. This is another indicator for the further growth potential in Europe.
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Overview of European Fitness Market
Europeans’ health is a valuable asset and many people are willing to invest additional monies in their own health. According to an OECD study from 2007, the public and private health expenditures in Europe has significantly grown in the past ten years. Private spending in health products and services include preventive medicine, massage and physiotherapy, beauty treatments, nutrition and recreation. The health and fitness industry therefore competes within a large market for the disposable income of millions of people interested in a healthier lifestyle. Its market share however is still comparably low. In Germany, for example, the total health expenditure amounted to i239 billion in 2006 whereby i55 billion came from private consumption. Based on Deloitte research the German health and fitness (H&F) market has an estimated total size of approximately i2.9 billion, which is only 5% of the total private health expenditures. This is similar in many other countries in Europe. Consequently, the still highly heterogenous and fragmented European H&F market has further potential to grow by lobbying its services as a valuable contribution to people’s health. This lobbying needs to take place on a consumer level but also on the level of national and European regulation in order to improve the conditions and framework for the industry. The data collected in this year’s European report should be a good starting point.
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EU27*
USA
Population (million)
478.6
301.1
Population per km²
117.4
30.6
GDP per capita
$32,893***
$46,000
Unemployment rate
6.94%
5.7%
Fitness Clubs
34,873
29,357
Members (million)
37.37
41.5
Average per Club
1,081
1,414
Penetration rate
7.9%
14.6%**
General Information
Overview of European Fitness Market
Fitness Market
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Source: CIA World Factbook; Deloitte Analysis; IHRSA; Bureau of Labor Statistics
Note: * The individual data for Europe is in average terms, consisting of data that was gathered for the individual selected countries. The European Union statistics consists of the data of the countries that participated in this year’s report (= Austria, Belgium, Bulgaria, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Netherlands, Romania, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, UK + economic data but no fitness data from Cyprus, Luxembourg and Malta) ** U.S. penetration rate is based on population age 6 and over. *** Exchange rate 31 December 2007. Health Club membership in the U.S. experienced no significant change over the last year, while industry revenues increased by 5% to $18.5 billion.
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Market Size
(millions g)
Total Europe European Union 27 UK
e22,758 e20,516 e4,752
Spain
e3,600
Italy
e2,970
Germany
e2,903
France
e2,010
Russia
e1,440
Netherlands
e1,238
Sweden Greece
e370
Finland
e353
Portugal
e331
Belgium
e324
Norway
e323
Switzerland
e297
Ireland
e258
Austria
e222
Denmark
e216
Turkey
e189
Poland
e105
Hungary
e77
Czech Republic
e72
Lithuania
e18
Slovakia
e14
Latvia
e13
Estonia
e9
Slovenia
e3
Bulgaria
e2
Overview of European Fitness Market
e648
This graph illustrates an overview of market sizes of the Health and Fitness industry in the individual European countries. It has to be noted however that all numbers are estimates only, based on the industry data that has been obtained through market research and calculated as follows: (average price per month x number of members) x 12 (months). No secondary spending has been included. In order to compare the market size of one country to another (as illustrated in the graph), or to comment on the growth potential, the different geographic and economic structures of the individual countries have to be taken into consideration. Emerging Markets
Note: Finland average market size based on range of i343.20 - i363.00 million. Estonia average market size based on range of i8.37 - i9.60 million. IHRSA European Market Report © 2008 International Health, Racquet & Sportsclub Association
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Members
(millions) 40.7
Total
37.7
EU 27 7.5
Spain 7.2
UK 5.9
Germany
5.5
Italy 3.35
France
2.4
Overview of European Fitness Market
Netherlands Russia
1.5
Sweden
1.4
Greece
0.74
Portugal
0.6
Belgium
0.6
Norway
0.56
Switzerland
0.55
Finland
0.54
Denmark Ireland (Republic of) Austria
0.48 0.43 0.41
Turkey
0.35
Poland
0.25
Hungary
0.20
Czech Republic
0.15
Lithuania
0.035
Latvia
0.035
Slovakia
0.035
Estonia
0.0158
Slovenia
0.009
Bulgaria
0.004
Emerging Markets
Source: Deloitte Analysis
Note: Estonia: average number of members based on 0.0155m-0.016m Finland: average number of members based on 0.52m-0.55m; averaged commercial clubs based on 440-470 clubs
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Membership Penetration Rates 7.9%
EU 27 Average
16.6%
Spain Sweden
14.7%
Netherlands
14.5%
Norway
11.9%
UK
11.9%
Ireland (Republic of)
10% 9.5%
Italy
8.9%
Denmark 7.2%
Switzerland
7.1%
Germany
6.7%
Greece Belgium
5.7%
Portugal
5.7%
France
5.4%
Russia*
5.4%
Austria
Overview of European Fitness Market
10.5%
Finland
5.0%
Note: Russia: only the 13 largest cities included. IHRSA European Market Report © 2008 International Health, Racquet & Sportsclub Association
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Market Share of Leading Players (number of clubs) 27.79%
Norway
25.79%
Denmark 19.41%
Sweden Finland
18.93%
Ireland (Republic of)
18.60% 12.00%
Overview of European Fitness Market
Switzerland
11.14%
Belgium Netherlands
9.74%
Austria
9.60%
France
9.05% 8.67%
Germany
7.78%
UK 4.90%
Russia
3.55%
Spain Portugal Italy Greece
3.21% 1.45% n/a
Note: Finland: average market share of leading players based on 18.3% - 19.55%
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Average Commercial Club Monthly Membership (gross) e80
Russia UK
e55
Finland
e55
France
e50
Ireland (Republic of)
e50
Overview of European Fitness Market
e48
Norway Portugal
e46
Austria
e45
Belgium
e45
Italy
e45
Switzerland
e45
Netherlands
e43
Greece
e42
Germany
e41
Sweden
e40
Spain
e40 e37.5
Denmark
Note: Russia: only the 13 largest cities included. IHRSA European Market Report © 2008 International Health, Racquet & Sportsclub Association
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Market Potential
Overview of European Fitness Market
Penetration Rates vs. EU Average Spain
16.6%
Sweden
14.7%
Netherlands
14.5%
Norway
11.9%
4.0%
UK
11.9%
4.0%
Finland
10.5%
Ireland (Republic of)
10.0%
8.7% 6.8% 6.6%
2.6% 2.1%
Italy
9.5%
Denmark
8.9%
EU 27 Average
7.9%
Switzerland
7.2%
-0.7%
Germany
7.1%
-0.8%
Greece
6.7%
-1.2%
Belgium
5.7%
-2.2%
Portugal
5.7%
-2.2%
Russia
5.4%
-2.5%
France
5.4%
-2.5%
Austria
5.0%
-2.9%
■ EU27 Average
■ Penetration Rate
1.6% 1.0%
■ Penetration Market Potential
■ Above Market Average
Note: Russia: Only the 13 largest cities included.
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Country
Additional Membership Potential
Belgium
235,495
e127.17
Switzerland
Additional Market Size Potential (millions)
49,034
e26.48
Greece
132,023
e66.54
Germany
610,555
e300.39
Portugal
235,495
e129.99
Russia
675,440
e648.42
Austria
242,208
e130.79
France Total
1,505,329
e903.20
3,685,579
e2,332.98
Because of its low penetration rate, France shows the greatest additional market potential of all European countries. Russian figures are based on the 13 largest cities only.
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Overview of European Fitness Market
Further growth potential is estimated for countries with penetration rates below European average. Based on the assumption that these countries can reach the European average penetration (EU 27) rate of 7.9%, additional market potential is calculated. This estimated market potential is based on average membership fees in 2007.
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GDP per capita e22,333
EU 27 Ireland (Republic of)
e44,558 e42,120
Denmark e35,935
Sweden
e34,970
Netherlands
e34,231
Finland
e31,094
Belgium
e30,325
Overview of European Fitness Market
France Germany
e29,346
Austria
e29,084
Italy
e26,403
UK
e26,337 e23,230
Spain
e20,091
Greece e15,189
Portugal
e16,700
Slovenia Czech Republic
e13,196 e11,946
Estonia Slovakia
e10,043
Hungary
e9,798
Latvia
e8,690
Poland
e8,536 e8,020
Lithuania Bulgaria
e3,816
Emerging Markets
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Unemployment Rate 6.94%
EU 27
12.80%
Spain 9.00%
Germany Portugal
8.20%
Greece
8.10%
France
8.00% 7.50%
Belgium
6.90%
Finland
6.10%
Italy
6.00%
UK
5.40%
Ireland (Republic of)
5.30% 4.50%
Netherlands
4.30%
Austria
3.40%
Denmark
12.80%
Poland 8.40%
Slovakia Bulgaria
7.70%
Slovenia
7.70%
Overview of European Fitness Market
Sweden
7.30%
Hungary Czech Republic
6.60% 5.70%
Latvia 4.70%
Estonia 3.20%
Lithuania
Emerging Markets
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Fitness chains in Europe The major fitness chains are a key driver of the consolidation process in the European H&F market. This section of the report will give a more detailed overview of select fitness chains operating in Europe. We took a closer look at the development of memberships and number of clubs throughout the past three years as well as the positioning of the largest fitness chains in Europe. The number of people doing fitness in Europe slightly increased to 37.7 million in 2007 which corresponds to a rate of 7.9%. Selected fitness chains presented in the following table increased their market share in the total European H&F market and now hold around 3.3% of the clubs in Europe. Table 1: Development of selected chain operators
Chains in Europe
Operator
Memberships
Number of studios
Dec 05
Dec 06
Dec 07
Fitness First
812,243
883,487
930,294
340
370
McFit
301,000
416,000
550,000
54
Virgin Active
163,088
332,553
344,747
37
Kieser*
269,130
287,400
299,430
SATS
210,943
227,344
236,993
65,744
161,310
Health City Injoy*
Dec 05 Dec 06 Dec 07
Variance 06/07 members
studios
381
5.3%
3.0%
68
89
32.2%
30.9%
86
87
3.7%
1.2%
145
145
148
4.2%
2.1%
95
100
105
4.2%
5.0%
200,435
28
75
100
24.3%
33.3%
157,870
169,620
180,170
148
164
180
6.2%
9.8%
Hebe/Moving
80,000
100,000
120,000
66
82
100
20.0%
22.0%
Holmes Place Iberia
85,000
89,000
97,000
17
21
27
9.0%
28.6%
Fitnessdk
47,000
85,000
95,000
23
34
35
11.8%
2.9%
104,600
98,850
91,600
32
30
27**
(7.3)%
(10.0)%
52,000
60,000
80,000
18
21
29
33.3%
38.1%
Fizkult
n/a
17,000
28,000
n/a
5
10
64.7%
100.0%
Aspria
15,500
18,500
21,000
5
5
5
13.5%
0.0%
2,946,064 3,274,669 1,008
1,206
1,323
11.2%
9.7%
Elixia World Class
Total Members per club
2,364,118 2,345
2,443
2,475
Source: Unaudited company data Deloitte-Analysis.
Note: *Franchise **Without Elixia Nordic AS
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British based club chain Fitness First, which operates 381 clubs throughout Europe with more than 930,000 members, is the largest European chain. German budget provider McFit Fitness is second in membership numbers, having increased its strong position with 550,000 members. This operator, whose philosophy is “focusing on quality and the essential”, was the fastest growing company in Europe in 2007. McFit opened/acquired 21 new studios and gained more than 130,000 new members in the last year, resulting in a membership growth rate of over 32%. With 180 franchise clubs, INJOY, part of the Inline Consulting company, in Germany, has the second highest number of clubs in Europe after Fitness First. In 2007, INJOY, whose mission statement includes the high qualification standards for personnel as well as the atmosphere with “human touch”, added 16 franchises and increased membership by more than 10,000; this corresponds to a growth rate of 6% in memberships and nearly 10% in number of clubs. Fitness dk, the largest Danish chain operator, following its goal to “get more Danes active”, increased its number of memberships to 95,000 by the end of 2007, and is now operating 27 clubs in a non-franchise system in Denmark.
In contrast, Elixia has seen a member decline of over 7%, primarily due to the closing of clubs in Germany. It now operates 27 clubs in Austria, France and Germany. Although they are separate entities, Elixia still cooperates with Elixia Nordic in Scandinavia.
Chains in Europe
Aspria, a premium provider founded in 2000, operated two clubs in Germany and three in Belgium in 2007. Two more locations are planned to be opened soon. The combination of “quality and value for money” is attracting a following, as the number of memberships has increased constantly in the past three years to 21,000 in 2007.
World Class is an indicator of the growth potential of the Russian market. The company increased its number of clubs and memberships by approximately 60% within the last three years. A glance at the positioning of selected European fitness chains in context to the compound average growth rate (CAGR) of clubs and members from 2005 to 2007 is shown in the following chart. As the size of the bubbles illustrates the number of members in each fitness chain dated December 2007, the leadership of Fitness First in terms of members is undeniable. But with regard to the largest average annual growth rate, budget provider McFit Fitness is characterised by an increase of more than 35% as well as 28% in new clubs. Compared to other European fitness chains shown in the graphic, McFit Fitness is one of the few operating in the budget segment.
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Chart 1: Member development of selected chain operators in relation to the compound average growth rate (CAGR) of clubs and members from 2005 to 2007 100%
Health City
CAGR 05-07 Members
80%
60%
40%
Fitnessdk McFit
Virgin Active
20% Aspria
Chains in Europe
Injoy Kieser (20)%
0%
FItness First
Holmes Place 20%
40%
60%
80%
100%
Elixia (20)%
CAGR 05-07 Clubs
Source: Unaudited company data Deloitte-Analysis.
Note: The size of the bubbles presents the number of members dated 31 December 2007.
Nonetheless, the medium segment dominates the European H&F market as Fitness First, Virgin Active, Health City as well as the Swiss fitness chain Kieser Training command a major portion of all members in 2007. At least for Virgin Active and Health City, this fact is due to intense membership growth in the past three years. Health City realized an average membership growth of nearly 75%, causing its market positioning (in terms of memberships among the other fitness chains) to improve from 10th place in 2006 to the sixth place by the end of 2007. Part of this success is found in the strong ‘Buy and Build’ strategy of the company, which is illustrated by a large increase in clubs of 89% (Health City). This represents the highest average annual growth rate of all European chains. Virgin Active, with a growth of clubs of 53%, strongly benefited from its acquisition of Holmes Place UK in 2006. The Lady fitness chain Curves has been included in this year’s report for the first time. Throughout Europe, Curves operates 694 small clubs in the “micro club” segment and increased its number of memberships to almost 186,000 in 2007. Curves is characterized by a low number of average members per club (268) compared to McFit Fitness (6,180), Virgin Active (3,963) or Holmes Place Iberia (3,593). There are also other operators in the lady fitness segment trading under various names (e.g. Vivafit, Mrs.Sporty and CaloryCoach). 20
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Also included in this year’s list of leading players is SATS, which operates 105 clubs in the Scandinavian countries Finland, Sweden, Norway and Denmark. SATS states that they “will help more people to work out on a regular basis”, something they already were doing for 237,000 members by the end of 2007. In this year’s report, SATS is ranked in 5th place. Chart 2: Top 10 Operators in Europe Members Clubs Average per club
930,294 381 2,442
550,000 344,747 89 87 6,180 3,963
299,430 236,993 148 105 2,023 2,257
200,435 100 2,004
185,705 180,170 694 180 268 1,001
120,000 100 1,200
97,000 27 3,593
Members Clubs Average members per club
Chains in Europe
Fitness First
McFit Fitness
Virgin Active
Kieser
SATS
Health City
Curves
Injoy
Moving
Holmes Place Iberia
Source: Unaudited company data Deloitte-Analysis.
Similar to last year, Kieser Training stabilized its 4th rank among the leading players in Europe. With nearly 300,000 members and 148 franchise clubs mainly operated in Germany and Switzerland, the fitness provider focusing on “preventive and medical strength training” grew by 4.2% in terms of number of members in 2007. In 2008, special focus has to be set on the budget segment which is forecast to grow in the following years. A vivid example of this trend is the German H&F market whose structure is developing to higher market share of budget and premium provider at the expense of the medium segment that in 2007 lost further 3.5% in terms of members. The fast growing chain McFit Fitness who is planning to extend its activities to other European countries and to increase its number of memberships to 1,000,000 by the end of 2009 further accelerates this process. If the chains can reduce their attrition rate that ranges between 9% and 52%, they will be able to further increase their market share in the overall European H&F market in 2009.
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M&A Deal Activity in the European Health and Fitness Market
M&A Deal Activity
The number of transactions executed by private equity firms in the leisure industry, including sports, health & fitness, gaming & betting and tourism & hospitality, has increased significantly during the last few years. However, the importance of other transaction types such as acquisitions from investors of another industry as well as Management Buy-Out’s (MBO) or Management Buy-In’s (MBI) is growing as these investors are attracted by the growth rates experienced by operators and the profit improvement opportunities through the enhancement of management, structural organisation and operational efficiency. The accompanying table gives an extract of selected recent financial transactions dating back to the beginning of 2007 (table continues on next page). Bidder
Bidder Country
Health Club UK Investments Group Ltd; UK based parent company of Cannons Health & Fitness
Nuffield Hospitals
UK
n/a
2
Aug-07 TTS Space Limited UK (formerly known as The Third Space Group Limited)
Graphite Capital Management LLP (Foreign&Colonial Ventures)
UK
32.4
3
Aug-07 David Lloyd Leisure Limited
UK
Versailles Bidco Limited
UK
1,363.9
2
Jul-07
R-Fitness
Russia
World Class/Alfa Capital Partners
Russia
n/a
1/3
Jun-07
Fit24 (10 of 23 studios)
Germany
McFit Fitness GmbH
Germany
n/a
1
Date
Target
Dec-07
Target Country
Deal Value Transaction* (e m) Type
* Legend referring to type of transaction: 1: Market Consolidation 2: Investor outside the industry 3: Private Equity investment
4: Management Buy-Out or Buy-In 5: Sale and Lease Back 6: Others
Source: Mergermarket, Leisure Opportunities.
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Other industries show growing interest in the European H&F market In the last years, investors operating in other industries have intensified their involvement in the health & fitness industry as they see an opportunity to diversify their existing portfolio of products and services often from a related industry. An example of such a transaction is Nuffield Hospitals, the UK based provider of healthcare services, who acquired Health Club Investments Group Ltd. from PPM Capital Limited, a UK based private equity firm. Health Club Investments is the parent company of Cannons Health and Fitness, and it operates commercial health and fitness clubs. The acquisition enhanced Nuffield Hospitals to widen its healthcare group by serving a broad variety of services. Now, Nuffield Hospitals meet the health and fitness needs of approximately 300,000 people in more than 170 locations. The combined turnover of Cannons and Nuffield for 2006 was approximately GBP 600m. M&A Deal Activity
Another example, in August 2007, Versailles Bidco Limited, the UK based company owned by London & Regional Holdings Limited and Bank of Scotland Corporate, agreed to acquire David Lloyd Leisure Limited, the UK based health and fitness club group, from Whitbread PLC, the listed UK based hospitality company, for a cash consideration of GBP 925m. Date
Target
Target Country
Bidder
Bidder Country
Deal Value Transaction* (e m) Type
May-07 The Queen’s Club Limited
UK
The Queen’s Club UK Limited (members)
45.5
6
Apr-07
MeridianSpa GmbH
Germany
MeridianSpa (MBO vehicle)
Germany
n/a
4
Apr-07
AcitvFitness AG
Switzerland MigrosGenossenschaftsBund (MGB)
Switzerland
n/a
2
Mar-07
Sportopolis
Belgium
HealthCity Netherlands International B.V./ Waterland Private Equity Investments B.V.
n/a
1/3
Feb-07
Impuls Fitness Group
Germany
Germany HealthCity International B.V./ Waterland Private Equity Investments B.V.
6
1/3
Feb-07
Sports Club AS
Norway
Elixia Holdings AS
n/a
1
Norway
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The agreement was structured as a direct sale of the entire issued share capital of David Lloyd Leisure Ltd, David Lloyd Leisure Espana I S.L. and David Lloyd Leisure Espana II S.L, the Spain based health and fitness clubs, together with those shares of DLL S.A. which are registered in the name of Whitbread Group.
Private Equity vs. Management Buy-Out (MBO) However, despite the growing importance of investors outside the core market, Private Equity firms are still the major investors in the fitness industry. But also other forms of transactions, namely Management Buy-Out´s (MBO) and Management Buy-In´s (MBI), become more and more common in the fitness industry.
M&A Deal Activity
A vivid example for both types of transactions is the acquisition of The Third Space Group Limited, the UK based luxury health club, by the management team led by Eric Dunmore, Joel Cadbury and Ollie Vigors in August 2007. This MBO transaction was backed by Graphite Capital Management LLP, the UK based mid market private equity firm, from The Longshot Group, the UK based owner of Health and Fitness clubs, for a consideration of GBP 22m. Eric Dunmore, the former Chief Executive Director of the company has acquired significant equity stake in the company. The acquisition is in line with Graphite’s strategy of growing and expanding the business internationally. This in turn will allow Third Space to increase its club capacity which will help them in building new clubs. Third Space is expected to benefit from the financial resources and professional expertise provided by Graphite Capital. The transaction was funded by Lloyds TSB Group plc, the listed UK based financial services group.
Conclusion The industry is still in the focus of investors and may see many more transactions in the future. The above examples give a flavour of the different strategies of both the buyers and sellers involved in such transactions. With the continuing increase in consumer expenditures in health products and services and the changing of demographics, the fitness industry has the opportunity to expand its market volume. Both strategic and financial investors will closely follow the developments and will particularly target those operators which are well positioned in the market place. One of the key trends, which has also attracted the interest of many potential investors, is discount or budget fitness. The key player in this segment is the German based operator McFit Fitness. So far the company, owned by its founder Rainer Schaller, has been resistant to any external investor, but have been active themselves in the M&A business by acquiring Fit24 in 2007. In addition they have announced their international expansion plans. We are keen to see what will be the future strategy and reasoning behind financial transactions in the European H&F industry.
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M&A Deal Activity
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Demographics: Who Joins Clubs? In 2007, as part of an annual tracking study, GfK examined fitness and health club participation in six major European countries: the United Kingdom, Germany, France, Italy, Spain, and the Netherlands. The study observes differences in health club membership among the six countries according to age, education, and activity participation. Nearly half (47%) of European exercisers participate in cardio fitness activities, while strength training and group exercisers total 31% and 22%, respectively, of total fitness participants. Throughout Europe, 42% of total fitness participants visit the club at least twice a week.
Consumer Research
fitness activity participation in six major European countries
club attendance of fitness participants in six major european countries
22%
18%
31%
40%
20% 47%
22% Group Excercise
Cardio Fitness
Strength Training
Never One time or less per week
Twice per week Three or more per week
Health club membership varies throughout the countries according to age, but the age group with the lowest penetration for all European countries is the segment between 14-17 years of age. The groups with the most presence are people between the ages of 18-34 (38%) and 35-54 (35%). As in the previous years, higher levels of education are often correlated with membership with 43% of total membership having completed higher education or above.
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Netherlands For three consecutive years, the Netherlands has reported the highest penetration rate out of the six major European countries. Most participants in fitness frequent the club at least twice a week (58%), which is comparable to the number of club visits in 2006. Most members are women, representing 58% of total membership, which is similar to gender numbers from previous years. Age demographics are also similar to 2006 numbers with 39% of members between 35-54 years of age. This age group became the largest segment last year, and for a second straight year, the 18-34 age group was the second largest segment with 35% of the age market. The majority of club members reported a higher level of education at 61% of total membership, up from 51% in 2006 and 48% in 2005. Netherlands: Health Club Membership—Age
Netherlands: Health Club Membership—education
6%
10%
16%
33% 61%
40%
14-17
35-54
18-34
55+
Lower level
Medium level
Higher level
Consumer Research
35%
In the Netherlands, cardio fitness is the most popular health club activity with 71% of member participants. Gender demographics pertaining to activity participation have been steady through the past three years with females making up the majority of participants in cardio fitness and group exercise at 55% and 79%, respectively. Strength training exercisers are typically male at 56% of total participants. Male Female
21%
Group Exercise
79% 45%
Cardio Fitness
55% 56%
Strength Training
44%
0
20
40
60
80
100
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Spain Spain has the second highest penetration rate at 16.6%. In 2007, 53% of total members were male, while the majority of members were females in 2006 and 2005. This change may signal a swing in memberships by gender or it might be an anomaly in the data set. Results from 2008 research will help to clarify. For the third consecutive year, the largest age group was between 18-34 years of age at 44% of total membership with members between the ages of 35-54 characterizing the next largest group at 33% of total members. A reported 56% have a secondary education, 32% have a university degree. Of all fitness participants who utilize clubs, the majority visit at least twice a week, with 32% frequenting at least three times a week. Spain: Health Club Membership—Age
Spain: Health Club Membership—education
5%
Consumer Research
3%
16%
18%
9%
16%
44%
23%
33%
33% 14-17
35-54
18-34
55+
Primary (not finished) Primary (up to 11-12 yrs old)
Secondary (12-16 yrs old) Secondary (16-18 yrs old)
University Degree (3 years) University Degree (5 years)
Cardio fitness is the most popular form of exercise, with strength training a close second. Male members consist of the largest group of participants in strength training at 66% of total participants, while seven out of 10 group exercise participants are female. Male Female
30%
Group Exercise
70% 54%
Cardio Fitness
46% 66%
Strength Training
34%
0
20
40
60
80
100
Percentage
28
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United Kingdom The United Kingdom’s penetration rate is 11.9%, third among the six major European markets. An estimated 40% of fitness participants attend the club at least twice a week and 29% visit once a week. In 2007, 53% of all members were male, a 7% change from 2006 when most members were women. Also a change from the previous year, the largest age group was between the ages of 18-34 at 41%, with 37% of the market belonging to the 35-54 age group. Similar to 2006, 68% have an A level education or higher. UK: Health Club Membership—Age
UK: Health Club Membership—education
8%
14%
9% 47%
23%
41% 37%
Consumer Research
21% 14-17
35-54
18-34
55+
Primary Secondary
A level University & above
Cardio fitness is the most popular club activity with 92% of club member participants. Nearly seven out of ten strength training participants are men, while almost eight out of ten group exercise participants are females. Male Female
22%
Group Exercise
78% 54%
Cardio Fitness
46% 69%
Strength Training
31%
0
20
40
60
80
100
Percentage
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Germany In 2007, 52% of the German health club members were female, whereas in 2006 and 2005, the majority of members were male (2006 Females: 41%; 2005 Females: 46%). The 18-34 years of age group was still the largest, but at 33% of total membership the segment ranging from 35-54 years of age continues to grow and is a close second. Similar to findings from previous years, roughly four in 10 members have a secondary education with another 4 in 10 having completed higher education. Germany— Health Club Membership—Age
Germany— Health Club Membership—education
5%
1%
5%
26%
41%
32%
Consumer Research
33% 35%
11% 14-17
35-54
18-34
55+
10%
Primary without apprenticeship Primary with apprenticeship
Secondary Higher University Degree No Answer
Strength training and cardio fitness are the most popular club activities. Equal numbers of males and females participate in cardio fitness, while 63% of strength training participants are male and 74% of group exercisers are female. Male Female
26%
Group Exercise
74% 50%
Cardio Fitness
50% 63%
Strength Training
37%
0
20
40
60
80
100
Percentage
30
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France Nearly three-quarters of the French health club members are females (73%), having grown from 66% in 2007. Similar to previous years, the majority of health club members have at least a higher education at 57% of total membership. In terms of age groups, members between 35-54 years of age make up 37% of membership, while the 18-34 segment hold 31% of the market. france— Health Club Membership—Age
france— Health Club Membership—education
4%
1% 4% 10%
27%
33% 31%
28%
24% 14-17
35-54
Pre-Primary
Secondary
18-34
55+
Primary
Higher
University Degree No Answer
Cardio fitness and group exercise are the most popular health club activities. This may be attributed to the predominance of females as health club members. Nearly 9 out of 10 group exercise participants are females (87%), while men and women participate in cardio fitness in equal proportions. Male Female
13%
Group Exercise
Consumer Research
37%
87% 50%
Cardio Fitness
50% 64%
Strength Training
36%
0
20
40
60
80
100
Percentage
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Italy The Italian health club market accounts for 9.5% of the total population. Most health club members are female at 54% of total membership, and 45% of members are between the ages of 18-34. Over half of club members have a senior high school diploma or a university degree. italy— Health Club Membership—Age
italy— Health Club Membership—education
6%
7%
19%
17%
45%
16%
6%
18%
31%
Consumer Research
35% 14-17
35-54
18-34
55+
Elementary Senior high school without diploma
Junior high school without diploma Senior high school with diploma
Junior high school with diploma Degree
Over seven out of 10 strength training participants are male while more than six out of 10 group exercise participants are female. Cardio fitness participants are typically female with 56% of total exercisers. Male Female
36%
Group Exercise
64% 44%
Cardio Fitness
56% 74%
Strength Training
26%
0
20
40
60
80
100
Percentage
32
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Research Methodology During November/December 2007, consumer fitness research was collected from six European countries (France, Germany, Italy, Netherlands, Spain, and United Kingdom). In every country a representative sample of the population were asked the same three questions. These questions were asked as part of a larger omnibus survey. The sample size in each country consisted of 1,000 persons aged 14/15/16 years and older, for a total of 6,000 survey participants. These participants were reached by telephone through a randomly dialed system. It is important to note that the majority of the calls placed and accepted may have occurred in highly populated areas and it is possible the results might be skewed. The three questions related to fitness participation, health club membership, and attendance at the health club. Responses included members and non-members of all types of health clubs (commercial and not-for-profit). The results from the research have been projected on to each country’s total population. This research is part of an annual consumer tracking survey and was sponsored by IHRSA and conducted by GfK.
Consumer Research
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AUSTRIA SWEDEN FINLAND Gulf of Bothnia
NORWAY
Country Profile Capital
Vienna
Area (km²)
83,870
Population (million)
8.3
Population per km²
98.96
GDP per capita, current prices in e
29,084 e
Inflation rate (%)
2.23%
Unemployment rate (%)
4.30%
NorthSea
Baltic Sea
DENMARK IRELAND
U. K. NETHERLANDS
POLAND
BELGIUM
English Channel
GERMANY LUX. CZECH SLOVAKIA
FRANCE
AUSTRIA SWITZERLAND
Bay of Biscay
HUNGARY
SLOVENIA CROATIA BOSNIA SERBIA ANDORRA
ITALY
PORTUGAL SPAIN
BULGARIA
MONTENEGRO
Adriatic Tyrrhenian Sea
MACEDONIA ALBANIA
Aegean GREECE
AUSTRIA
Fitness in General
Mediterranean Sea
Ionian Sea
Fitness Clubs (public)
n/a
Fitness Clubs (commercial)
500
Members (million)
0.412
Average members per club
824
Leading Players
Penetration rate
4.96%
INJOY (Franchise)
Average gross price per month
45.00 e
John Harris
7
Market Share Leading Players (Number of Clubs) only commercial
9.60%
Kieser (Franchise)
5
Holmes Place
4
Elixia
2
Manhattan
2
Fitness & Economy
Location Central Europe, north of Italy and Slovenia.
Total
Estimated market size (sales in millions)
222.48 e
Estimated market size incl. secondary spending (sales in millions)
244.73 e
28
48
International Players Elixia Holmes Place
Estimated total employees
7,900
INJOY (Franchise)
Corporate tax rate
25%
Kieser (Franchise)
VAT rate (general)
20%
Source: Unaudited company data; Deloitte Analysis; CIA World Factbook; EIU; Manhattan Fitness; Austrian Club Leaders Meeting (July 1, 2008)
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Fitness Market During last year’s “7 Days for Fitness” event in October 2007, a national campaign for health clubs supported by the government and organized by fitness.at, to promote fitness to the population, reported 84,000 trial memberships were downloaded, an increase of 25% over 2006. The event which takes place in October 2008 is expected to have 100,000 trial memberships downloaded. The Austrian health and fitness market experienced growth in 2007 with a reported 500 clubs and 412,000 members. With an average membership fee of i45.00 per month and a penetration rate of almost 5%, the Austrian market totals i222 million in annual revenue. Experts expect a slight increase in membership by 3% in 2008. The market share for leading players decreased slightly in Austria from 10.5% in 2006 to 9.6% in 2007. As a leading player, the franchise chain and leading operator INJOY acquired one new club and remained the largest player by far in terms of market share with 28 clubs. John Harris is second with 7 units.
Country Trends
Economic Outlook In 2007 the Austrian nominal GDP grew by an estimated 5.81% in 2007. In the future economic activity is forecasted to slow to an average of 3.99% in 2008-09. Private consumption growth is projected to fall to 1.4% in 2008, restrained by higher inflation, before accelerating slightly to 1.6% in 2009. The outlook for inflation in Austria remains fairly benign, given the sluggish rate of earnings growth and the modest pace of consumer spending.
AUSTRIA
Austria’s great outdoor landscape and ski slopes make for a natural competition to health clubs, since most Austrians ski and hike regularly. However, this regular outdoor sports activity creates an opportunity for specialized fitness instruction. Other growing trends within the Austrian H & F market include group fitness, particularly for Pilates and yoga. As the older generation becomes more active in fitness, these soft fitness programs will increase in popularity.
Associations/Federations Verband der gesundheitsorientierten Fitnessanlagen (VGF; www.vgf.at) ÖABBV-IFBB/Austria Österreichischer Amateur Bodybuilding und Fitness Verband
Trade Show Messe Gesund & Wellness
Gesund Leben
Messe Wien 7-9 November, 2008 www.gesundundwellness.at
Messe Wels 14-16 November, 2008 www.gesundheitsmesse.at
Source: Economic Intelligence Unit (EIU) IHRSA European Market Report © 2008 International Health, Racquet & Sportsclub Association
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BELGIUM SWEDEN FINLAND Gulf of Bothnia
NORWAY
Country Profile Capital
Brussels
Area (km²)
30,528
Population (million)
10.6
Population per km²
347.22
GDP per capita, current prices in e
31,094 e
Inflation rate (%)
1.80%
Unemployment rate (%)
7.50%
NorthSea
Baltic Sea
DENMARK IRELAND
U. K. NETHERLANDS
POLAND English Channel
GERMANY
BELGIUM
LUX. CZECH SLOVAKIA
FRANCE
AUSTRIA SWITZERLAND
Bay of Biscay
HUNGARY
SLOVENIA CROATIA BOSNIA SERBIA ANDORRA
ITALY
PORTUGAL SPAIN
BULGARIA
MONTENEGRO
Adriatic Tyrrhenian Sea
MACEDONIA ALBANIA
Aegean GREECE
BELGIUM
Fitness in General
Mediterranean Sea
Ionian Sea
Fitness Clubs (public)
n/a
Fitness Clubs (commercial)
817
Members (million)
0.6
Average members per club
734
Penetration rate
5.7%
Leading Players
Average gross price per month
45.00 e
HealthCity
29
Passage Fitness First
27
Market Share Leading Players (Number of Clubs) only commercial
11.14%
Fit Class*
17
Go Fit
13
Location Western Europe, bordering the North Sea, between France and the Netherlands.
Lifestyle Quality Total
Fitness & Economy Estimated market size (sales in millions)
324.00 e
Estimated market size incl. secondary spending (sales in millions)
356.40 e
Estimated total employees
2,800
Corporate tax rate
33.99%
VAT rate (general)
21%
VAT rate (fitness)
6%
5 91
International Players Aspria David Lloyd* Family Fitness Fitness First Health City
*Both franchise and non franchise operated clubs. Source: Unaudited company data; Deloitte Analysis; CIA World Factbook; EIU; DFO
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Fitness Market Although the number of commercial clubs decreased from 842 in 2006 to 817 in 2007, membership grew from 500,000 to 600,000 members. These changes have led to a slight increase in the penetration rate from 4.8% to 5.7%. Average monthly membership prices also increased from i42 to i45. Among leading players, Dutch-based fitness operator Health City increased the number of clubs from 24 in 2006 to 29 in 2007. Fitness First and Fit Class have 27 and 17 clubs, respectively.
Country Trends The growing Belgian market has attracted international players such as Health City and Fitness First. Health City has acquired and re-branded Belgian clubs including Sportopolis, positioning the expanded club company as a multi-purpose facility with programs for families and members of all ages. Industry-wide, club location and membership are each expected to increase by 5-10%.
Economic Outlook BELGIUM
Nominal GDP growth is expected to slow down further after 3.9% in 2007 to an average of 3.1% between 2008 and 2009. Although slowing, private consumption, fixed investment and export growth will all remain robust. Despite the fact that private consumption will remain fairly strong at an average of 1.6%, it will be restrained by more modest employment growth, low real wage increases and low consumer confidence. Furthermore the average inflation is expected to rise from 1.8% in 2007 to 2.8% in 2008, before falling again to 1.9% in 2009.
Associations/Federations De Fitness Organisatie (DFO; www.fitnessorg.com) fitatleet
Trade Show Life² 13-15 March, 2009 Brussels Expo www.life2.be
Source: Economic Intelligence Unit (EIU) IHRSA European Market Report © 2008 International Health, Racquet & Sportsclub Association
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Denmark SWEDEN FINLAND Gulf of Bothnia
NORWAY
Country Profile Capital
Copenhagen
Area (km²)
43,094
Population (million)
5.4
Population per km²
125.31
GDP per capita, current prices in e
42,120 e
Inflation rate (%)
1.70%
Unemployment rate (%)
3.40%
NorthSea
Baltic Sea
DENMARK IRELAND
U. K. NETHERLANDS
POLAND
BELGIUM
English Channel
GERMANY LUX. CZECH SLOVAKIA
FRANCE
AUSTRIA SWITZERLAND
Bay of Biscay
HUNGARY
SLOVENIA CROATIA BOSNIA SERBIA ANDORRA
ITALY
PORTUGAL SPAIN
BULGARIA
MONTENEGRO
Adriatic Tyrrhenian Sea
MACEDONIA ALBANIA
Aegean GREECE
denmark
Fitness in General
Mediterranean Sea
Ionian Sea
Fitness Clubs (public)
307
Fitness Clubs (commercial)
380
Members (million)
0.48
Average members per club
699
Penetration rate
8.89%
Leading Players
Average gross price per month
37.50 e
Fitness dk
35
SATS
18
Market Share Leading Players (Number of Clubs) only commercial
25.79%
Equinox
16
Fitness & Economy Estimated market size (sales in millions)
216.00 e
Estimated market size incl. secondary spending (sales in millions)
237.60 e
Estimated total employees
7,400
Corporate tax rate
28%
VAT rate (general)
25%
Location Northern Europe, bordering the Baltic Sea and the North Sea, north of Germany.
Fitness World
15
Motion & Trivsel*
14
Total
98
International Players Curves (Franchise) Friskis & Svettis SATS
Source: Unaudited company data; Deloitte Analysis; CIA World Factbook; EIU; DHFO
*Both franchise and non franchise operated clubs.
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Fitness Market The Danish Fitness market’s number of clubs has grown in both the public and commercial sectors, by 24% and 14%, respectively from 2006-2007. According to Danish experts, public clubs consist of a single room for basic training as a supplement to another sport. Club membership to public clubs is more exclusive than commercial clubs due to their sport-specific focus. With an average membership fee of i37.50, 480,000 memberships and a penetration rate of 8.9%, the Danish H&F market is worth about i216 million. Although the five leading players in the Danish market were exposed to a slight decrease in market share from 26.4% in 2006 to 25.8% in 2007, their level of market share remains the second highest throughout Europe. The leading operator Fitness dk improved its leading position by adding five new clubs in 2007 for a total of 35 locations.
Country Trends The Danish market is considerably exposed to downward pressure on pricing: as club units increase, membership prices are expected to decrease. In response, some chains are developing niches specific to consumers over 30 years of age because of this group’s spending power. Additionally, future health insurance policies may include an incentive for fitness activity participation.
Economic Outlook DENMARK
After totalling 3.3% in 2007 nominal GDP growth is expected to expand to 6.8% in 2008 before decelerating again to 3.9% in 2009. Given an extremely tight labour market there is a risk that a wage-price spiral will take hold, resulting in a further loss of competitiveness, lower than expected export growth and a more prolonged economic slowdown. Private consumption growth is expected to be much weaker in 2008-09, as higher interest rates erode the disposable income of heavily indebted households and employment falls. Although the unemployment rate will remain low, domestic demand growth is expected to fall from 3% in 2007 to 2.4% in 2008 and 1.7% in 2009, respectively. The rate of inflation (EU harmonised measure) averaged only 1.7% in 2007 and is expected to average 2.8% in 2008 before falling back to 2.3% in 2009 on the assumption that oil prices ease and wage growth moderates.
Associations/Federations Dansk Fitness & Helse Organisation (DFHO; www.dfho.dk)
Source: Economic Intelligence Unit (EIU) IHRSA European Market Report © 2008 International Health, Racquet & Sportsclub Association
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FINLAND SWEDEN FINLAND Gulf of Bothnia
NORWAY
Country Profile Capital
Helsinki
Area (km²)
338,145
Population (million)
5.2
Population per km²
15.38
GDP per capita, current prices in e
34,231 e
Inflation rate (%)
2.50%
Unemployment rate (%)
6.90%
NorthSea
Baltic Sea
DENMARK IRELAND
U. K. NETHERLANDS
POLAND
BELGIUM
English Channel
GERMANY LUX. CZECH SLOVAKIA
FRANCE
AUSTRIA SWITZERLAND
Bay of Biscay
HUNGARY
SLOVENIA CROATIA BOSNIA SERBIA ANDORRA
ITALY
PORTUGAL SPAIN
BULGARIA
MONTENEGRO
Adriatic Tyrrhenian Sea
MACEDONIA ALBANIA
Aegean GREECE
Fitness in General Fitness Clubs (public)
Mediterranean Sea
170
FINLAND
Fitness Clubs (commercial) 440-470 Members (million)
0.52-0.55
Average members per club
858
Penetration rate
10.50%
Average gross price per month
55.00 e
Market Share Leading Players (Number of Clubs) only commercial
18.90%
Ionian Sea
Location Northern Europe, bordering the Baltic Sea, Gulf of Bothnia and Gulf of Finland, between Sweden and Russia. Leading Players CMS Finland (Franchise)
33
Lady Line (Franchise)
23
Finnbody
14
SATS
8
Fitness & Economy
Elixia
8
Estimated market size (sales in millions)
353.10 e
Motivus
7
Estimated market size incl. secondary spending (sales in millions)
388.41 e
Estimated total employees
5,600-5,800
Corporate tax rate
26%
VAT rate (general)
22%
VAT rate (fitness)
8%
Total
93
International Players Elixia SATS
Source: Unaudited company data; Deloitte Analysis; CIA World Factbook; EIU; SKY; K&F Magazines
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Fitness Market According to several Finnish experts, health club memberships in Finland grew throughout the year 2007. An estimated range of 520,000 to 550,000 Finnish residents are health club members, resulting in a penetration rate of approximately 10%. With a relatively high average monthly membership fee of i55.00, the Finnish H&F market size amounts to i353.1 million. CMS Finland is the leading operator, managing 33 clubs, while the women’s only Lady Line franchise operates 23 clubs in Finland. The multi-purpose chain Finn Body has 14 units.
Country Trends Regarding general trends in the Finnish H&F market, a survey conducted by the association Kunto shows increasing demand for services targeting the middle-aged and elderly population. Low budget clubs are expected to increase their presence with Tampere opening its first location in 2008, which may put downward pressure on pricing. Another opportunity for club growth exists to cater to the young and de-conditioned segment of the population, as researchers in Finland recommend that children spend 1-2 hours daily in fitness activity.
Economic Outlook
FINLAND
Finland’s nominal GDP growth is forecasted to slow from an estimated 6.6% in 2007 to 3.9% in 2008 and 3.8% in 2009, as both foreign and domestic demand growth ease. Consumer demand will continue to benefit from strong, if slowing, employment growth (with an unemployment rate of 6.5% in 2008 and 5.9% in 2009), wage increases from new pay settlements agreed in the second half of 2007 and reductions in income tax in both 2008 and 2009. Consumer price increases (national measure) are expected to average 2% in both 2008 and 2009. After totalling 1.6% in 2006 inflation has increased to 2.5% in 2007. Due to the expectation that GDP growth will decelerate in 2008 and 2009, inflation pressures are predicted to remain moderate.
Associations/Federations Suomen Kuntoliikuntaliitto ry (www.kunto.fi)
Trade Show Gymtec
Health + Wellness 2008
Kunto 2009
26-27 March, 2009 Tampere Fair Centre www.finnexpo.fi
10-12 October, 2008 Helsinki Fair Centre www.finnexpo.fi
13-15 March, 2009 Helsinki Fair Centre www.finnexpo.fi
Source: Economic Intelligence Unit (EIU) IHRSA European Market Report © 2008 International Health, Racquet & Sportsclub Association
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FRANCE SWEDEN FINLAND Gulf of Bothnia
NORWAY
Country Profile Capital
Paris
Area (km²)
547,030
Population (million)
61.6
Population per km²
112.61
GDP per capita, current prices in e
30,325 e
Inflation rate (%)
1.60%
Unemployment rate (%)
8.00%
NorthSea
Baltic Sea
DENMARK IRELAND
U. K. NETHERLANDS
POLAND
BELGIUM
English Channel
GERMANY LUX. CZECH SLOVAKIA
FRANCE
AUSTRIA SWITZERLAND
Bay of Biscay
HUNGARY
SLOVENIA CROATIA BOSNIA SERBIA ANDORRA
ITALY
PORTUGAL SPAIN
BULGARIA
MONTENEGRO
Adriatic Tyrrhenian Sea
MACEDONIA ALBANIA
Aegean GREECE
Fitness in General Fitness Clubs (public)
Mediterranean Sea
600
FRANCE
Fitness Clubs (commercial) 2,695 Members (million)
3.35
Average members per club
1,017
Penetration rate
5.44%
Average gross price per month
50.00 e
Market Share Leading Players (Number of Clubs) only commercial
9.05%
Ionian Sea
Location Western Europe, between Belgium and Spain, southeast of the UK and between Italy and Spain. Leading Players Groupe HEBE (Franchise)
100
Amazonia
60
Curves (Franchise)
52
Keep Cool
27
Fitness & Economy
Club Med Gym
22
Estimated market size (sales in millions)
2,010.00 e
Fitness First
12
Forest Hill
12
Estimated market size incl. secondary spending (sales in millions)
2,211.00 e
Vit`Halles
10
Estimated total employees
9,630
Corporate tax rate
33.33%
VAT rate (general)
19.60%
Total
295
International Players Curves Fitness First Silhouette
Source: Unaudited company data; Deloitte Analysis; FHRSA; CIA World Factbook; EIU
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Fitness Market In comparison to its neighbouring countries and the European average of 7.9%, France has a fairly low penetration rate of 5.4%. Nonetheless, with a high average monthly membership fee of i50.00, the market size of the French H&F market is estimated to be worth i2 billion, which makes France the fifth largest market in Europe. Groupe HEBE, a franchise company that consolidated three club brands, is the largest player in France with 100 locations. Curves has 52 clubs.
Country Trends Club Med announced in June 2008 that it wanted to sell 80% of Club Med Gyms, one of the leading chains in France, in order to enable the chain operator to achieve its future growth plans. As of September 2008, it appears that Club Med has found a buyer, 21 Centrale Partners. 21 Centrale Partners is a French private equity firm and has purchased 80% of Club Med gyms for i74 million. Franchising is also the preferred method of expansion, which is evident by the leading players: Groupe HEBE and Curves. The older population in France is significant as is the need for specialized fitness programs. According to experts, overall demographic trends have a positive impact and governmental health policies have a negative influence on the business climate.
Economic Outlook
FRANCE
Nominal GDP growth amounted to 4.1% in 2007 and is expected to decelerate from 3.9% in 2008 to 3.7% in 2009, because the twin motors of France’s recent expansion— private consumption and gross fixed investment—are both expected to slow in 2008. The surge in consumer confidence following the presidential election in May 2007 has evaporated, as the recent housing boom has faded and employment growth begins to slow. Although disposable income is likely to pick up in 2008 because of higher wage growth, this will be partly offset by higher inflation. The annual rate of inflation in 2007 was at 1.6%, which is well below the Euro zone average (2.1%). Overall, annual average inflation is expected to increase to 2.4% in 2008, before falling back to 1.8% in 2009.
Associations/Federations French Health, Racquet & Sportsclub Association (FHRSA) 1 Boulevard Charrier, 13100 Aix on Provence, France Phone: (33) 6-6293-9362 Fax: (33) 6-6034-8677
[email protected]
Trade Show Mondial Spa & Beauty 20-22 March, 2009 Paris, France www.mondialspaetbeaute.com
Source: Economic Intelligence Unit (EIU) IHRSA European Market Report © 2008 International Health, Racquet & Sportsclub Association
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GERMANY SWEDEN FINLAND Gulf of Bothnia
NORWAY
Country Profile Capital
Berlin
Area (km²)
357,021
Population (million)
82.6
Population per km²
231.36
GDP per capita, current prices in e
29,346 e
Inflation rate (%)
2.20%
Unemployment rate (%)
9.00%
NorthSea
Baltic Sea
DENMARK IRELAND
U. K. NETHERLANDS
POLAND
BELGIUM
English Channel
GERMANY LUX. CZECH SLOVAKIA
FRANCE
AUSTRIA SWITZERLAND
Bay of Biscay
HUNGARY
SLOVENIA CROATIA BOSNIA SERBIA ANDORRA
ITALY
PORTUGAL SPAIN
BULGARIA
MONTENEGRO
Adriatic Tyrrhenian Sea
MACEDONIA ALBANIA
Aegean GREECE
Fitness in General Fitness Clubs (public)
Mediterranean Sea
500
GERMANY
Fitness Clubs (commercial) 5,574 Members (million)
5.9
Average members per club
975
Penetration rate
7.14%
Average gross price per month
41.00 e
Market Share Leading Players (Number of Clubs) only commercial
8.67%
Fitness & Economy Estimated market size (sales in millions)
2,902.80 e
Estimated market size incl. secondary spending (sales in millions)
3,193.08 e
Estimated total employees
70,000
Corporate tax rate
38.36%
VAT rate (general)
19.00%
Ionian Sea
Location Central Europe, bordering the Baltic Sea and the North Sea, between the Netherlands and Poland, south of Denmark. Leading Players Mrs. Sporty
180
INJOY (Franchise)
144
Kieser Training (Franchise)
120
Fitness Company (Fitness First)
107
McFit Fitness Health City Total
89 23 483
International Players Aspria Elixia Fitness First HealthCity Holmes Place Kieser Swiss Training
Source: Unaudited company data; Deloitte Analysis; CIA World Factbook; EIU
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Fitness Market According to the annual German Deloitte Health and Fitness report, commercial health club membership grew by 6% in 2007. With an average gross price per month of i41.00 in 2007 and approximately 5.9 million members in over 6,000 fitness clubs (including 500 public clubs), the German H&F market is worth i2.9 billion, making Germany the fourth largest H&F market in Europe. This results in a penetration rate of 7.1% (6.6% commercial club only). The women’s only circuit-training chain Mrs. Sporty has the largest number of clubs with 180 units. INJOY has 144 locations and Kieser Training has 120 clubs. The low budget chain McFit Fitness maintained its position as the market leader in membership numbers with 550,000 members. Low budget chains hold a share of 22.8% of traditional fitness clubs (excluding Mrs. Sporty), while medium budget clubs lost 3.5% of market share.
Country Trends Despite the popularity of low-budget clubs and decline of medium budget chains, premium facilities can distinguish themselves from clubs offering basic services by providing high quality wellness programs and specialized fitness services. The National Register was established recently in Germany for consumer and health insurer usage. Through the Register, consumers can search for clubs employing trainers with specific certifications and expertise and health insurers can look for clubs to partner within wellness initiatives. GERMANY
Economic Outlook Germany’s nominal GDP expanded by 4.4% in 2007 but growth is forecasted to decelerate to 1.0% in 2008 before rebounding to 2.1% in 2009. The slowdown will take place in fixed investment and exports, both of which have recently been buoyant. In contrast, private consumption growth will pick up after a protracted period of stagnation, underpinned by strong employment creation. An upturn in inflation in recent months has been caused mostly by volatile food and energy prices, but has continued to have an effect in the early part of 2008. After 1.7% in 2006 inflation grew to 2.2% in 2007.
Associations/Federations Deutscher Industrieverband für Fitness und Wellness e.V. (DIFW; www.difw.de) Deutscher Sportstudio Verband e.V. (DSSV; www.dssv.de) Verband Deutscher Freizeit- und Fitnessunternehmen e.V. (VDF; www.fitnessundwellnessverband.de)
Trade Show FIBO 2009 23-26 April, 2009 Essen www.fibo.de
Source: Economic Intelligence Unit (EIU) IHRSA European Market Report © 2008 International Health, Racquet & Sportsclub Association
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GREECE SWEDEN FINLAND Gulf of Bothnia
NORWAY
Country Profile Capital
Athens
Area (km²)
131,940
Population (million)
11
Population per km²
83.37
GDP per capita, current prices in e
20,091 e
Inflation rate (%)
3.20%
Unemployment rate (%)
8.10%
NorthSea
Baltic Sea
DENMARK IRELAND
U. K. NETHERLANDS
POLAND
BELGIUM
English Channel
GERMANY LUX. CZECH SLOVAKIA
FRANCE
AUSTRIA SWITZERLAND
Bay of Biscay
HUNGARY
SLOVENIA CROATIA BOSNIA SERBIA ANDORRA
ITALY
PORTUGAL SPAIN
Fitness in General Fitness Clubs (public)
Mediterranean Sea
n/a
Fitness Clubs (commercial) 1,470
GREECE
Tyrrhenian Sea
Members (million)
0.735
Average members per club
500
Penetration rate
6.68%
Average gross price per month
42.00 e
BULGARIA
MONTENEGRO
Adriatic
MACEDONIA ALBANIA
Aegean Ionian Sea
GREECE
Location Southern Europe, bordering the Aegean Sea, Ionian Sea and the Meditteranean Sea, between Albania and Turkey.
Fitness & Economy Estimated market size (sales in millions)
370.44 e
Estimated market size incl. secondary spending (sales in millions)
407.484 e
Estimated total employees
17,640
Corporate tax rate
20% / 25%
VAT rate (general)
19%
Source: Unaudited company data; Deloitte Analysis; CIA World Factbook; EIU
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Fitness Market Figures for Greece are based on 2006 estimates due to a lack of reliable data for 2007. The Greece Fitness Market is still in a period of stagnation with players exiting the market. Growth was modest, attaining a market size of about i370 million with the presence of about 1,500 clubs. The penetration rate is slightly below 7%. Monthly membership fees are a mean of i42.00.
Country Trends With the highest obesity rate in Europe, Greece remains a young market with opportunity for growth. Clubs offering weight loss and management programs could address this niche.
Economic Outlook
GREECE
The nominal GDP growth of Greece totalled 3.3% in 2007 and is forecasted to expand to 4.1% in 2008 and to 7.4% in 2009, but with regard to the influence of inflationary aspects on these figures they appear in another light. After decelerating to 3.9% in 2007, real GDP growth is expected to decrease to 2.4% in 2008 and only to slightly recover to 2.6% in 2009. The slowdown will mainly result from an easing of private consumption growth as a result of the costs of servicing household debt, which has been rapidly increasing, and a slowdown in the rate of credit growth. Although these GDP growth rates are below government expectations, they are still above expected EU averages of 1.9% in 2008. The annual inflation of 3.2% in Greece for 2007 remained well above the average for the Euro area (2.1%) and is expected to average 3.3% in 2008 before slowing to 2.8% in 2009.
Associations/Federations Hellenic Bodybuilding and Fitness Federation (www.bodybuilding-eosd.gr)
Trade Show Sports Show 28 September-2 October, 2008 West Hellenic Airport, Greece www.sportshow.gr
Source: Economic Intelligence Unit (EIU) IHRSA European Market Report © 2008 International Health, Racquet & Sportsclub Association
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IRELAND (republic of) SWEDEN FINLAND Gulf of Bothnia
NORWAY
Country Profile Capital
Dublin
Area (km²)
70,280
Population (million)
4.3
Population per km²
61.18
GDP per capita, current prices in e
44,558 e
Inflation rate (%)
4.90%
Unemployment rate (%)
5.30%
NorthSea
Baltic Sea
DENMARK IRELAND
U. K. NETHERLANDS
POLAND
BELGIUM
English Channel
GERMANY LUX. CZECH SLOVAKIA
FRANCE
AUSTRIA SWITZERLAND
Bay of Biscay
HUNGARY
SLOVENIA CROATIA BOSNIA SERBIA ANDORRA
ITALY
PORTUGAL SPAIN
BULGARIA
MONTENEGRO
Adriatic Tyrrhenian Sea
MACEDONIA ALBANIA
Aegean GREECE
Fitness in General Fitness Clubs (public)
Mediterranean Sea
110
IRELAND
Fitness Clubs (commercial) 570 Members (million)
0.43
Average members per club
632
Penetration rate
10.00%
Average gross price per month
50.00 e
Market Share Leading Players (Number of Clubs) only commercial
18.60%
Location Western Europe, occupying five-sixths of the island of Ireland in the North Atlantic Ocean, west of Great Britain. Leading Players Curves (Franchise)
Fitness & Economy
Ionian Sea
80
Jackie Skellys
9
Kingfisher
6
Crunch Fitness (Franchise)
5
McEniff Hotels
3
Westwood
3
Estimated market size (sales in millions)
258.00 e
Estimated market size incl. secondary spending (sales in millions)
283.80 e
Estimated total employees
10,000
David Lloyd
Corporate tax rate
12.5%
LA Fitness
VAT rate (general)
21%
Total
106
International Players
Source: Unaudited company data; Deloitte Analysis; CIA World Factbook; EIU; ILAM
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Fitness Market In 2007, the Irish H&F market experienced a 7.5% growth in membership. The number of clubs, however, stayed roughly the same with only an increase of 15 total units. The penetration rate amounted to nearly 10%, and the average monthly membership fee increased from i42.00 to i50.00. According to experts, the Lady fitness franchise chain Curves was the leading player in the Irish market with 80 clubs in operation, followed by Irish-based operator Jackie Skellys with 9 clubs and Kingfisher with 6 clubs. The leading players have 18.6% of the commercial club market share.
Country Trends In Ireland, nearly 40% of clubs coexist with hotel businesses. Another 40% are stand-alone clubs, which include fitness-only and multi-purpose facilities, while 20% of the market consists of community fitness centers. Spa and wellness programs are prevalent in hotel-affiliated clubs, and circuit training clubs are growing within the private, stand-alone sector. Governmental incentives to joining clubs are in development.
Economic Outlook
IRELAND
In 2007 the nominal Irish GDP is estimated to have totalled 9.7%. This strong growth is forecasted to decrease considerably to 6.3% in 2008. There are several reasons for this anticipated slowdown of the Irish economy, ranging from a weaker domestic demand growth over a decline of construction activity to an expected increase in unemployment (from 5.3% in 2007 to 7.0% in 2008). All in all these developments are clear indicators for an overall economic slowdown after several years of a remarkable performance. In 2008 a sharp slowdown in domestic demand will cause the elimination of the inflation gap with the rest of the Euro zone, but this is expected to re-emerge in 2009 as price pressures in the bloc ease more than in Ireland.
Associations/Federations Institute of Leisure and Amenity Management Ireland Ltd. (ILAM; www.ilam.ie)
Trade Show ILAM Ireland Annual Conference & Exhibition 15-16 October, 2008 The Hilton Hotel, Ennis Road, Limerick www.ilam.ie
Source: Economic Intelligence Unit (EIU) IHRSA European Market Report © 2008 International Health, Racquet & Sportsclub Association
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ITALY SWEDEN FINLAND Gulf of Bothnia
NORWAY
Country Profile Capital
Rome
Area (km²)
301,230
Population (million)
58.1
Population per km²
192.88
GDP per capita, current prices in e
26,403 e
Inflation rate (%)
2.00%
Unemployment rate (%)
6.00%
NorthSea
Baltic Sea
DENMARK IRELAND
U. K. NETHERLANDS
POLAND
BELGIUM
English Channel
GERMANY LUX. CZECH SLOVAKIA
FRANCE
AUSTRIA SWITZERLAND
Bay of Biscay
HUNGARY
SLOVENIA CROATIA BOSNIA SERBIA ANDORRA
ITALY
PORTUGAL SPAIN
BULGARIA
MONTENEGRO
Adriatic Tyrrhenian Sea
MACEDONIA ALBANIA
Aegean GREECE
Fitness in General Fitness Clubs (public)
Mediterranean Sea
2,300
ITALY
Fitness Clubs (commercial) 6,500 Members (million)
5.50
Average members per club
625
Penetration rate
9.47%
Average gross price per month
50.00 e
Market Share Leading Players (Number of Clubs) only commercial
1.45%
Ionian Sea
Location Southern Europe, a peninsula extending into the central Mediterranean Sea, southeast of France. Leading Players 20 hours
24
Fitness First
18
Caroli Health Club
14
Curves
13
Fitness & Economy
Get Fit Italien
13
Estimated market size (sales in millions)
2,970.00 e
Dabliù
12
Total
94
Estimated market size incl. secondary spending (sales in millions)
3,267.00 e
Estimated total employees
80,000
Corporate tax rate
37.3%
VAT rate (general)
20%
International Players Fitness First Curves Virgin Active Body Factory Fitness Place
Source: Unaudited company data; Deloitte Analysis; CIA World Factbook; EIU; Il Nuovo Club; Fit at Work
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Fitness Market In 2007 the number of memberships in Italy decreased, although the total number of commercial fitness clubs increased by 500. The penetration rate in Italy remained steady at 9.5%. 20 Hours and Fitness First are the leading players with 24 and 18 club units, respectively. Desite posting double digit units, the leading five players only account for 1.45% of the market, which is composed of 6,500 commercial clubs in total.
Country Trends The commercial Fitness Market in Italy is very fragmented due to the fact that it is made up of many small and independent clubs. Leading players account for less than 2% of total market share. Since the population has remained relatively the same in Italy, the older population continues to grow, calling for the need of more soft fitness programs such as flexibility, yoga, Pilates, and low-impact aerobics. Quality and specialization in services will be of more importance to these club members than price and standard offerings. Although a rising topic of discussion, no defined incentive has been established from the government or health insurers to join fitness clubs.
Economic Outlook
ITALY
Although the Italian nominal GDP is expected to increase from 3.8% in 2007 to 6% in 2008, real GDP growth is forecasted to decelerate from 1.5% in 2007 to 0.7% in 2008, before rising again in 2009 to 1.2%. This difference has its cause in the effects of the Italian inflation on the nominal GDP. Furthermore, leading business and consumer confidence indicators were depressed in the final months of 2007 and in early 2008, suggesting that the current weakness of the Italian economy will be more prolonged than previously forecasted. Inflation (EU harmonised measure) will rise from 2% in 2007 to 2.6% in 2008. In 2009 it is expected to ease again, to 1.7%.
Associations/Federations Eurowellness A.N.I.F. (www.eurowellness.it) Federazione Italiana Aerobicana e Fitness FIAF (www.fiaf.it) Federazione Italiana Fitness FIF (www.fif.it)
Trade Show Rimini Wellness
Forum Il Nuovo Club
15-18 May, 2008 Rimini www.riminiwellness.com
20-22 February, 2009 Verona www.ncforum.com
Source: Economic Intelligence Unit (EIU) IHRSA European Market Report © 2008 International Health, Racquet & Sportsclub Association
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NETHERLANDS SWEDEN FINLAND Gulf of Bothnia
NORWAY
Country Profile Capital
Amsterdam
Area (km²)
41,526
Population (million)
16.5
Population per km²
397.34
GDP per capita, current prices in e
34,970 e
Inflation rate (%)
1.60%
Unemployment rate (%)
4.50%
NorthSea
Baltic Sea
DENMARK IRELAND
U. K.
NETHERLANDS
POLAND
BELGIUM
English Channel
GERMANY LUX. CZECH SLOVAKIA
FRANCE
AUSTRIA SWITZERLAND
Bay of Biscay
HUNGARY
SLOVENIA CROATIA BOSNIA SERBIA ANDORRA
ITALY
PORTUGAL SPAIN
BULGARIA
MONTENEGRO
Adriatic Tyrrhenian Sea
MACEDONIA ALBANIA
Aegean GREECE
Fitness in General Fitness Clubs (public)
Mediterranean Sea
100
NETHERLANDS
Fitness Clubs (commercial) 1,930
Location Western Europe, bordering the North Sea, between Belgium and Germany.
Members (million)
2.4
Average members per club
1,429
Penetration rate
14.55%
Leading Players
Average gross price per month
43.00 e
Health City
Market Share Leading Players (Number of Clubs) only commercial
9.74%
Fitness & Economy
Ionian Sea
48
SLG/Bruve Beheer
44*
Laco
33
Achmea
28
Fitness First
23
Fitland
12
Estimated market size (sales in millions)
1,238.40 e
Total
Estimated market size incl. secondary spending (sales in millions)
1,362.24 e
International Players
Estimated total employees
26,300
Corporate tax rate
25.5%
VAT rate (general)
19%
VAT rate (Fitness)
6%
188
David Lloyd Fitness First
Source: Unaudited company data; Deloitte Analysis; CIA World Factbook; EIU; EFAA; SLG *Sports Leisure Group (SLG)/Bruve Beheer consists of different brands and entities whereby clubs are operated on a franchise and non-franchise basis.
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Fitness Market In 2007, research by the WJH Mulier Institute showed a total amount of approximately 2.9 million participants in the Dutch Health & Fitness market. Compared to the previous year this represents a moderate increase of 190,000 participants. Nevertheless one has to take into account that the total number of participants also includes activities that are performed outside of Health & Fitness clubs. The total health club membership number has been estimated at 2.4 million, yielding a penetration rate of 14.55%. The leading five players within the Dutch market account for about 10% of the entire market. Health City is the largest player, operating 48 clubs in the Netherlands. The Sports and Leisure Group (SLG), which manages several different brands, is a close second with 44 clubs. Laco operates 33 clubs.
Country Trends Over the past two years, there has been a focus on specialized programming in the Netherlands. In 2007, 14 club operators formed the Wellness Club network, enabling members to search for clubs offering wellness services online. Another growing area of specialized programming is youth fitness. UK-based Energie Group opened a third SHOKK fitness location, a franchise targeting the young market.
Economic Outlook
In contrast the Dutch private consumption rose by an estimated 2.1% in 2007, mainly due to the stable employment situation, and is even forecasted to be more or less maintained in 2008 and 2009.
NETHERLANDS
Nominal GDP growth of the Netherlands added up to 8.1% in 2007 but is expected to decelerate in 2008 to 5.4% and again to 4.9% in 2009. This decline mainly occurs as a result of the expected slowdown of export markets and the strong Euro holding down trade competitiveness.
The average annual inflation for 2007 of 1.6% is presumably going to slightly increase to a level of about 2.1% in 2008.
Associations/Federations Fit!Vak (www.fitvak.com)
Trade Show Fitnessvakdagen 31 October-2 November 2008 Utrecht, Netherlands
Source: Economic Intelligence Unit (EIU) IHRSA European Market Report © 2008 International Health, Racquet & Sportsclub Association
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Norway SWEDEN FINLAND Gulf of Bothnia
NORWAY
Country Profile Capital
Oslo
Area (km²)
324,220
Population (million)
4.7
Population per km²
14.50
GDP per capita, current prices in e
61,277 e
NorthSea
Baltic Sea
DENMARK IRELAND
U. K. NETHERLANDS
POLAND
BELGIUM
English Channel
GERMANY LUX. CZECH SLOVAKIA
FRANCE
Inflation rate (%)
0.80%
Unemployment rate (%)
2.50%
AUSTRIA SWITZERLAND
Bay of Biscay
HUNGARY
SLOVENIA CROATIA BOSNIA SERBIA ANDORRA
ITALY
PORTUGAL SPAIN
Fitness in General Fitness Clubs (public)
Tyrrhenian Sea
MACEDONIA ALBANIA
Aegean GREECE
Mediterranean Sea
n/a
Fitness Clubs (commercial) 475
NORWAY
BULGARIA
MONTENEGRO
Adriatic
Members (million)
0.56
Average members per club
1,179
Penetration rate
11.91%
Average gross price per month
48.00 e
Market Share Leading Players (Number of Clubs) only commercial
27.79%
Ionian Sea
Location Northern Europe, bordering the North Sea and the North Atlantic Ocean, west of Sweden. Leading Players SATS
38
Spenst
37
Elixia
27
Nautilus
17
Fitness & Economy
Friskhuset
Estimated market size (sales in millions)
322.56 e
Total
Estimated market size incl. secondary spending (sales in millions)
354.82 e
International Players
Estimated total employees
7,100
Corporate tax rate
28%
VAT rate (general)
25%
VAT rate (Fitness)
n/a
13 132
Gold’s Gym
Source: Unaudited company data; Deloitte Analysis; CIA World Factbook; EIU; Fysiopartner; Gold’s Gym
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Fitness Market In 2007, almost 12% of the Norwegian population were members of fitness facilities. Over half a million members pay an average membership fee of i48.00, resulting in total industry revenues of nearly i323 million. The Norwegian fitness market is dominated by a small number of fitness chains and the market share of leading players amounts to almost 27.8%, which is the highest value of all analyzed European countries. The market share of leading players amounts to almost 27.8%, which is the highest value of all analyzed countries. SATS is the largest club operator in Norway with 38 clubs followed by Spenst, the franchise license of Sweden’s SATS, with 37 clubs operated in Norway. The low budget segment does not play an important role in Norway and therefore is not expected to grow as much as in other European countries.
Country Trends The Norwegian Health & Fitness market is expected to increase, in spite of the lack of governmental tax policies. Like other countries, there is no tax incentive for employers to pay for club memberships and no subsidy provided by health insurers. According to experts, the lack of political and health insurance incitements slows down the market development.
Economic Outlook
Strong employment growth and generous real wage increases sustained the four-year-long consumer boom, with private consumption growing by 6.4%, which is forecasted to slow in 2008-09, reflecting a lower employment growth and a higher inflation.
NORWAY
Norway’s economic upswing is also reflected in its nominal GDP growth of 5.9% in 2007, which is even forecasted to increase to 8.5% in 2008, before cooling down to 4.8% in 2009.
The inflation rate of 0.8% in 2007 is expected to average around 3.6% in 2008, before falling back to 2.3% in 2009 as growth softens.
Associations/Federations Norges Treningssenter Forbund (NTF; www.treningsnett.no)
Source: Economic Intelligence Unit (EIU) IHRSA European Market Report © 2008 International Health, Racquet & Sportsclub Association
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Portugal SWEDEN FINLAND Gulf of Bothnia
NORWAY
Country Profile Capital
Lisbon
Area (km²)
92,391
Population (million)
10.6
Population per km²
114.73
GDP per capita, current prices in e
15,189 e
Inflation rate (%)
2.50%
Unemployment rate (%)
8.20%
NorthSea
Baltic Sea
DENMARK IRELAND
U. K. NETHERLANDS
POLAND
BELGIUM
English Channel
GERMANY LUX. CZECH SLOVAKIA
FRANCE
AUSTRIA
HUNGARY
SWITZERLAND
Bay of Biscay
SLOVENIA CROATIA BOSNIA
PORTUGAL
SERBIA ANDORRA
ITALY
SPAIN
BULGARIA
MONTENEGRO
Adriatic Tyrrhenian Sea
MACEDONIA ALBANIA
Aegean GREECE
Fitness in General Fitness Clubs (public)
Mediterranean Sea
n/a
Fitness Clubs (commercial) 1,400
Portugal
Ionian Sea
Location Southwestern Europe, bordering the North Atlantic Ocean, west of Spain.
Members (million)
0.6
Average members per club
429
Penetration rate
5.66%
Leading Players - all clubs
Average gross price per month
46.00 e
Holmes Place Iberia*
Market Share Leading Players (Number of Clubs) only commercial
3.21%
Solinca Health & Fitness Club*
9
Fitness Worx by Holmes Place (Franchise)
6
Active Life Wellness Clubs
4
Kalorias Club
4
Premier Fitness Centers
4
Fitness & Economy
26
Estimated market size (sales in millions)
331.20 e
Estimated market size incl. secondary spending (sales in millions)
364.32 e
Total
Estimated total employees
16,000
Leading Players women only (FRANCHISE)
Corporate tax rate
25%
VivaFit & Pilates Fit*
70
21%
Curves*
18
Womanfit
14
Go Fit
12
Total
114
VAT rate (general)
53
Source: Unaudited company data; Deloitte Analysis; CIA World Factbook; EIU; AGAP *International players
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A
Fitness Market In 2007, 5.7% of the Portuguese population engaged in the Health & Fitness market with membership amounting to 600,000. The market now accounts for i331 million in total revenues. Club openings are expected to increase by 5% to 10% in 2008. Leading players are women-only clubs VivaFit & Pilates Fit, Curves, Womanfit, and Go Fit with a total of 114 clubs. VivaFit alone has 70 units. Representing more traditional fitness-only clubs, Holmes Place Iberia is the leading player with 26 clubs, including 19 owned and seven managed, with plans to open 5 more clubs in the future.
Country Trends Women-only circuit-training clubs dominate the Portuguese market. Concern for wellness has increased over the years and more clubs are investing in this area; for example, VivaFit integrated Pilates into their company brand. Functional training is also increasing in popularity, as it is in neighbouring Spain, partly because of suppliers offering new, inexpensive training options.
Economic Outlook
Associations/Federations
Portugal
Portugal’s nominal GDP growth totalled 3.9% in 2007 and is forecasted to increase to 4.3% in 2008 before stabilising at 4.2% in 2009. Domestic demand will continue to recover, but the ongoing need for a tight fiscal policy continues to affect confidence across most sectors. Private consumption is expected to grow at a lower rate than overall GDP, reflecting moderate employment growth, low real wage growth and the cost of servicing high household debt. Inflation is expected to be 2.3% in 2008 and to fall further to 2.1% in 2009.
Associacao des Empresas de Ginasios e Academias de Portugal (AGAP; www.agap.pt)
Trade Show DespoLazer Lisbon, Portugal www.manz.pt
Source: Economic Intelligence Unit (EIU) IHRSA European Market Report © 2008 International Health, Racquet & Sportsclub Association
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SPAIN SWEDEN FINLAND Gulf of Bothnia
NORWAY
Country Profile Capital
Madrid
Area (km²)
504,782
Population (million)
45.2
Population per km²
89.54
GDP per capita, current prices in e
23,230 e
Inflation rate (%)
5.00%
Unemployment rate (%)
12.80%
NorthSea
Baltic Sea
DENMARK IRELAND
U. K. NETHERLANDS
POLAND
BELGIUM
English Channel
GERMANY LUX. CZECH SLOVAKIA
FRANCE
AUSTRIA SWITZERLAND
Bay of Biscay
HUNGARY
SLOVENIA CROATIA BOSNIA SERBIA ANDORRA
ITALY
PORTUGAL SPAIN
BULGARIA
MONTENEGRO
Adriatic Tyrrhenian Sea
MACEDONIA ALBANIA
Aegean GREECE
Fitness in General Fitness Clubs (public)
Mediterranean Sea
1,700
SPAIN
Fitness Clubs (commercial) 4,000 Members (million)
7.50
Average members per club
1,316
Penetration rate
16.59%
Average gross price per month
40.00 e
Market Share Leading Players (Number of Clubs) only commercial
3.55%
Fitness & Economy Estimated market size (sales in millions)
3,600.00 e
Estimated market size incl. secondary spending (sales in millions)
3,960.00 e
Estimated total employees
35,000
Corporate tax rate
32.5%
VAT rate (general)
16%
VAT rate (Fitness)
7%
Ionian Sea
Location Southwestern Europe, bordering the Bay of Biscay, North Atlantic Ocean, Mediterranean Sea, southwest of France. Leading Players Body Factory*
45
Serviocio
30
Fitness Place*
21
Fitness First
18
UBAE
14
O2 Centro Wellness
14
Dir Sport Total
13 155
International Players Fitness First Gold`s Gym Holmes Place Virgin Active
Source: Unaudited company data; Deloitte Analysis; CIA World Factbook; EIU; Fundación Estadio; Sport Managers SSLL
*Both franchise and non franchise operated clubs.
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Fitness Market In 2007, the number of commercial clubs operating in Spain increased from 3,100 to 4,000 along with an increase in memberships to 7.5 million. Experts in Spain predict further growth in 2008, especially in mid-size cities, though this will be moderated by the economic downswing caused by the weak housing market. With a penetration rate of 16.6%, Spain has the highest of all the analyzed European countries. Based on this penetration rate and an average monthly membership fee of i40, total revenues equal i3.6 billion. The largest chain operating in Spain is Body Factory with 45 clubs.
Country Trends The market in Spain is still fragmented with a strong presence of independent clubs and small chains. As one of the largest markets, competition is very high, and Spain’s current economic recession has done little to alleviate the competition. Multi-purpose, upscale clubs are especially struggling due to the economic climate. There are no incentives from private health insurers, so far, but such initiatives are being discussed and developed.
Economic Outlook
Underlying price pressures have recently been higher in Spain than in most other Euro area countries, contributing to a steady loss of competitiveness. The easing of consumer demand pressures should bring the inflation rate down to an average of 3.6% in 2008 and 2.6% in 2009, but these rates are expected to be substantially above Euro area averages.
SPAIN
Even though Spain’s nominal GDP growth rate in 2007 amounted to 7.0% and is projected to only slightly decrease to 6.9% in 2008, Spain suffers from relatively high inflation. Due to this fact a sharp easing of the pace of economic growth is expected in Spain during the outlook period, with real GDP growth forecasted to slow from 3.8% in 2007 to 1.9% in both 2008 and 2009.
Associations/Federations Federación Espanola de Fisicoculturismo y Fitness (www.aef-spain.com)
Trade Show New Fitness Era Barcelona
Feria Fitness
Sports Unlimited Valencia
Barcelona, Spain www.orthos.es
23-26 April, 2009 Madrid, Spain www.ifema.es
19-21 May, 2009 Valencia, Spain www.sportsunlimited.es
Source: Economic Intelligence Unit (EIU) IHRSA European Market Report © 2008 International Health, Racquet & Sportsclub Association
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sweden SWEDEN FINLAND Gulf of Bothnia
NORWAY
Country Profile Capital
Stockholm
Area (km²)
449,964
Population (million)
9.16
Population per km²
20.36
GDP per capita, current prices in e
35,935 e
Inflation rate (%)
2.20%
Unemployment rate (%)
6.10%
NorthSea
Baltic Sea
DENMARK IRELAND
U. K. NETHERLANDS
POLAND
BELGIUM
English Channel
GERMANY LUX. CZECH SLOVAKIA
FRANCE
AUSTRIA SWITZERLAND
Bay of Biscay
HUNGARY
SLOVENIA CROATIA BOSNIA SERBIA ANDORRA
ITALY
PORTUGAL SPAIN
BULGARIA
MONTENEGRO
Adriatic Tyrrhenian Sea
MACEDONIA ALBANIA
Aegean GREECE
Fitness in General Fitness Clubs (public)
Mediterranean Sea
20
SWEDEN
Fitness Clubs (commercial) 850 Members (million)
1.35
Average members per club
1,552
Penetration rate
14.74%
Average gross price per month
40.00 e
Market Share Leading Players (Number of Clubs) only commercial
19.41%
Location Northern Europe, bordering the Baltic Sea, Gulf of Bothnia, Kattegat and Skagerrak, between Finland and Norway. Leading Players Nautilus Gym
82
SATS
42
Fitness 24 seven
21
World Class*
20
Total
Fitness & Economy Estimated market size (sales in millions)
648.00 e
Estimated market size incl. secondary spending (sales in millions)
712.80 e
Estimated total employees
10,500
Corporate tax rate
28%
VAT rate (general)
25%
Ionian Sea
165
International Players Nautilus SATS World Class
Source: Unaudited company data; Deloitte Analysis; CIA World Factbook; EIU; YLAB
*Both franchise and non franchise operated clubs.
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Fitness Market Since 2006 the Swedish Fitness Market has gained 50,000 memberships and now comprises 1.35 million memberships. Sweden has the second highest penetration rate of all European countries, 15% of the total population, and has an average monthly membership fee of i40. Sweden’s total industry revenues were i648 million in 2007. The leading five players in the Swedish Fitness Market hold around 19.4% market share of the total number of clubs. One of the major players on the Swedish Fitness Market is Nautilus Gym, which is operated by Medic Operating support AB (MO AB) and runs 82 clubs. In November 2007, MO AB sold 70% of its shares to FSN Capital Partners AS—a Norwegian venture capital firm. Another leading player in the market is SATS with 42 clubs.
Economic Outlook Sweden’s nominal GDP growth will considerably slow from an estimated 5.4% in 2007 to 0.1% in 2008, before picking up to 4.6% in 2009. Inflation has risen sharply in recent months according to both headline and underlying measures, but should settle around current levels in 2008, before easing a little in 2009. Private consumption has advanced steadily in response to rising employment and real incomes, and conditions remain favourable for robust, although slowing, consumption growth.
Trade Show Health Wellness & Fitness
SWEDEN
The annual average inflation is expected to increase from 2.2% (1.7% according to the EU harmonised measure) in 2007 to 3.1% (2.6% on the EU measure) in 2008, before easing to 2.5% (2.1%) in 2009.
7-9 November, 2008 Stockholm, Sweden www.altforhalsan.se
Source: Economic Intelligence Unit (EIU) IHRSA European Market Report © 2008 International Health, Racquet & Sportsclub Association
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switzerland SWEDEN FINLAND Gulf of Bothnia
NORWAY
Country Profile Capital
Bern
Area (km²)
41,290
Population (million)
7.6
Population per km²
184.06
GDP per capita, current prices in e
39,917 e
Inflation rate (%)
0.60%
Unemployment rate (%)
2.80%
NorthSea
Baltic Sea
DENMARK IRELAND
U. K. NETHERLANDS
POLAND
BELGIUM
English Channel
GERMANY LUX. CZECH SLOVAKIA
FRANCE
AUSTRIA SWITZERLAND
Bay of Biscay
HUNGARY
SLOVENIA CROATIA BOSNIA SERBIA ANDORRA
ITALY
PORTUGAL SPAIN
BULGARIA
MONTENEGRO
Adriatic Tyrrhenian Sea
MACEDONIA ALBANIA
Aegean GREECE
Fitness in General Fitness Clubs (public)
Mediterranean Sea
n/a
SWITZERLAND
Fitness Clubs (commercial) 675
Ionian Sea
Location Central Europe, east of France, north of Italy, south of Germany.
Members (million)
0.55
Average members per club
815
Penetration rate
7.24%
Leading Players
Average gross price per month
45.00 e
Kieser (Franchise)
19
Market Share Leading Players (Number of Clubs) only commercial
12.00%
Silhouette
18
TC
18
Migros
17
Aktiv (owned by: Migros) Fitness & Economy
Total
Estimated market size (sales in millions)
297.00 e
Estimated market size incl. secondary spending (sales in millions)
326.70 e
Estimated total employees
11,000
Corporate tax rate
21.30%
VAT rate (general)
7.60%
9 81
International Players Holmes Place Kieser (Franchise) Silhouette
Source: Unaudited company data; Deloitte Analysis; CIA World Factbook; EIU; SFCV
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Fitness Market In 2007, there were an additional 125 commercial clubs and 50,000 more members, over 2006. The Swiss penetration rate is 7.24%, just below the average for all European countries. For 2008, experts expect further growth in terms of membership numbers, while the number of total clubs and the average monthly membership fee are expected to stay at the same level. The leading industry companies include the Swiss based franchise company Kieser Training (19 clubs) and the women’s fitness company Sihouette and TC (18 clubs each).
Country Trends Swiss Health insurance companies subsidize up to 90% of memberships, but budget clubs are not among the clubs that qualify for these subsidies, making them less popular in this particular market. Over the years, organizations such as SCFV have tried to improve the public image of the fitness industry, and now the industry is becoming more recognized by government bodies, health insurers, and corporations. It is estimated that 20% of total fitness club industry revenues are due to health insurers subsidizing memberships. In terms of demographic trends, women’s only clubs are growing quickly with VivaFit, Curves, and Calorie Coach leading the trend.
Economic Outlook
SWITZERLAND
Nominal GDP growth settled around 3.4% in 2007 and is expected to stabilise at 3.3% between 2008 and 2009. Especially private consumption growth has been boosted by a strong labour market and is expected to have increased to 2.1% in 2007. Consumer price inflation averaged 0.7% in 2007, but in parallel with Euro area developments, it rose significantly towards the end of the year, reaching 2.4% in January 2008, the highest rate since late 1993. Inflation is expected to fall during 2008 from 2.4% in January, giving an annual average of 1.8% in 2008 and 1.7% in 2009.
Associations/Federations Schweizerischer Fitness Center Verband (SFCV, www.sfcv.ch)
Trade Show Zürich Convention 2008 ETH Zürich, Switzerland www.fitmess.com
Source: Economic Intelligence Unit (EIU) IHRSA European Market Report © 2008 International Health, Racquet & Sportsclub Association
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united kingdom SWEDEN FINLAND Gulf of Bothnia
NORWAY
Country Profile Capital
London
Area (km²)
244,820
Population (million)
60.7
Population per km²
247.94
GDP per capita, current prices in e
26,337 e
Inflation rate (%)
2.40%
Unemployment rate (%)
5.40%
NorthSea
Baltic Sea
DENMARK IRELAND
U. K. NETHERLANDS
POLAND
BELGIUM
English Channel
GERMANY LUX. CZECH SLOVAKIA
FRANCE
AUSTRIA SWITZERLAND
Bay of Biscay
HUNGARY
SLOVENIA CROATIA BOSNIA SERBIA ANDORRA
ITALY
PORTUGAL SPAIN
BULGARIA
MONTENEGRO
Adriatic Tyrrhenian Sea
MACEDONIA ALBANIA
Aegean GREECE
Fitness in General
united kingdom
Fitness Clubs
Mediterranean Sea
5,755 combined public & private sector
Members (million)
7.2
Average members per club
1,251
Penetration rate
11.86%
Average gross price per month
55.00 e
Market Share Leading Players (Number of Clubs) only commercial
7.78%
Fitness & Economy Estimated market size (sales in millions)
4,752.00 e
Estimated market size incl. secondary spending (sales in millions)
5,227.20 e
Estimated total employees
n/a
Corporate tax rate
30%
VAT rate (general)
17.50%
Ionian Sea
Location Western Europe, between the North Atlantic Ocean and the North Sea, northeast of France. Leading Players Fitness First
177
LA Fitness
88
Virgin Active
71
David Lloyd/ Next Generation
59
Esporta
53
Total
448
Source: Unaudited company data; Deloitte Analysis; CIA World Factbook; EIU; The Leisure Database
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Fitness Market The annual Fitness Market survey conducted by the Leisure Database Company reported an increase in fitness facilities and health club members from 2006 to 2007. The number of clubs operating in UK increased from 5,714 to 5,755. The average monthly membership fee is estimated at i55.00, and total industry revenues are nearly i4.8 billion. There are a number of leading companies in the UK, but Fitness First maintains its leading position with 177 clubs. Fitness First is followed by LA Fitness with 88 clubs and Virgin Active, which is operating 71 clubs in the UK. The large fitness chains have been driving the consolidation in the UK health & fitness industry.
Country Trends As fitness industry experts have expected there is a slow down with the current economic conditions, however the overall market value for the industry has increased. Operators have been able to maintain margins and avoid discounting dues. Club owners have provided specialized services in youth fitness and functional training. With respect to health care-health club partnerships, Norwich Union Healthcare has partnered with Health Force to offer discounted memberships at over 300 health clubs. Health Force sells memberships online for over 1,500 UK clubs.
Economic Outlook
united kingdom
The nominal GDP growth rate of 5.4% in 2007 is expected to decelerate to 3.6% in 2008, before a moderate increase to 4.2% in 2009. This noticeable slowdown is mainly caused by the impacts of the global credit crunch, which dampened the rate of expansion in the important financial services sector amongst others. As a result, real GDP growth is forecast to slow from an estimated 3.1% in 2007 to 1.7% in 2008, before a modest recovery to 2.1% in 2009. Private consumption is projected to decelerate, as employment growth eases. Inflation is forecasted to pick up sharply in the coming months, in response to high international oil and commodity prices. Annual average inflation is forecast to rise from 2.3% in 2007 to 2.5% in 2008, before falling back to 2.1% in 2009. A risk to the inflation outlook comes from the labour market. Although there is no sign of a sharp pick-up in wage growth, surveys suggest that consumers’ perception of inflation is much higher than the headline rate.
Associations/Federations Fitness Industry Association (FIA; www.fia.org.uk)
Trade Show Leisure Industry Week 23-25 September, 2008 Birmingham, England www.liw.co.uk
Source: Economic Intelligence Unit (EIU) IHRSA European Market Report © 2008 International Health, Racquet & Sportsclub Association
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Emerging European Markets In this chapter we take a closer look at the key developments in some of the emerging European markets including eight of the ten countries that joined the EU in 2004, plus Russia and Turkey.
Emerging European Markets Overview
By now, the European Union embraces 27 countries, with Bulgaria and Romania as new member states since January 2007. Although the enlargement of 2004 is stated as an economic success—e.g. Slovenia introduced the Euro in January 2007 and has assumed the Presidency of the European Council in January 2008—EU 27 faces enormous challenges. However, this unified market provides various opportunities for fitness club operators and investors. As the H&F market is still at an early stage of development in the new EU member states as well as in Russia and Turkey, they are not included in the main body of this report, but separately treated. However, given the demographic size of these countries and the expected economic growth potential, these markets offer profitable prospects and are worth a closer look. ICELAND Desktop overview of Eastern European Countries Norwegian Sea
SWEDEN FINLAND Gulf of Bothnia
NORWAY
North Atlantic Ocean
RUSSIA
ESTONIA NorthSea
LATVIA DENMARK
Baltic Sea
IRELAND
U. K.
LITHUANIA
BYELARUS
NETH.
POLAND
GERMANY
BELGIUM
English Channel
UKRAINE
CZECH
LUX.
SLOVAKIA MOLDOVA
FRANCE
AUSTRIA SWITZERLAND
SLOVENIA
Bay of Biscay
HUNGARY ROMANIA
CROATIA
Black Sea
BOSNIA SERBIA ANDORRA
ITALY
PORTUGAL
Adriatic
SPAIN
BULGARIA
MONTENEGRO
Tyrrhenian Sea
MACEDONIA
ALBANIA
TURKEY GREECE
Aegean
Ionian Sea
Mediterranean Sea
CYPRUS MALTA
New Members in the EU
66
Candidate Countries
Already a Member in the EU
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Bulgaria SWEDEN FINLAND Gulf of Bothnia
NORWAY
Country Profile Capital
Sofia
Area (km²)
110,994
Population (million)
7.60
Population per km²
68.47
GDP per capita, current prices in e
3,816 e
Inflation rate (%)
9.80%
Unemployment rate (%)
7.70%
NorthSea
Baltic Sea
DENMARK IRELAND
U. K. NETHERLANDS
POLAND
BELGIUM
English Channel
GERMANY LUX. CZECH SLOVAKIA
FRANCE
AUSTRIA SWITZERLAND
Bay of Biscay
HUNGARY
SLOVENIA CROATIA BOSNIA SERBIA ANDORRA
ITALY
PORTUGAL SPAIN
Tyrrhenian Sea
BULGARIA
MONTENEGRO
Adriatic
MACEDONIA ALBANIA
Aegean GREECE
Fitness Clubs (public)
n/a
Fitness Clubs (commercial)
20
Members (million)
0.004
Average members per club
200
Penetration rate
0.1%
Average gross price per month
40.00 e
Market Share Leading Players (Number of Clubs) only commercial
25.00%
Fitness & Economy Estimated market size (sales in millions)
1.92 e
Estimated market size including secondary spending (sales in millions)
2.11 e
Estimated total employees
n/a
Corporate tax rate
10%
VAT rate (general)
20%
Location South East Europe, bordering the Black Sea, south of Romania and north of Greece. Leading Players Atama Fitness Club
1
JK Fitness Club
1
Orange Fitness*
1
The Red Gym
1
Sparta Fitness Club
1
Total
5
Emerging European Markets
Fitness in General
Mediterranean Sea
Ionian Sea
International Players Orange Fitness*
Source: Unaudited company data; Deloitte Analysis; CIA World Factbook; SGI Europe
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Fitness Market In spite of a low penetration rate in Bulgaria, fitness club membership has increased in popularity and accessibility in Bulgaria over the past several years. Leading players charge between i42.00 to i45.00 per month in fees, slightly higher than the European average price of i40.00 per month. These fees make clubs more accessible to the general public, a change from recent years when only the wealthy could afford memberships.
Emerging European Markets
Country Trends The fitness club industry in Bulgaria has come a long way from the body-building mentality that prevailed during the early 1990s. Small weightlifting-oriented facilities have been replaced with large centers featuring strength and cardiovascular equipment. Wellness and beauty have increased in popularity as many clubs have emerged with wellness and spa centers, particularly in cities. Aerobics and group exercise is popular among women, many of which also participate in aerobics at home. Experts in fitness participation expect a growth in demand for sports clubs over the next five years.
Source: Deloitte Analysis; CIA World Factbook
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Czech Republic ESTONIA
Country Profile
LATVIA
Capital
Prague
Area (km²)
78,866
Population (million)
10.2
Population per km²
129.33
GDP per capita, current prices in e
13,196 e
Inflation rate (%)
2.60%
Unemployment rate (%)
6.60%
DENMARK
Baltic Sea
BYELARUS
NETH.
GERMANY
POLAND
UKRAINE LUX.
CZECH
SLOVAKIA MOLDOVA
AUSTRIA
HUNGARY
SWITZERLAND
ROMANIA
SLOVENIA CROATIA
Black Sea
BOSNIA SERBIA
ITALY
BULGARIA
MONTENEGRO
MACEDONIA
Adriatic
ALBANIA GREECE
TURKEY Aegean
Ionian Sea
Fitness Clubs (public)
620
Fitness Clubs (commercial)
480
Members (million)
0.15
Location
Average members per club
136
Central Europe, southeast of Germany, north of Austria.
Penetration rate
1.47%
Average gross price per month
40.00 e
Market Share Leading Players (Number of Clubs) only commercial
3.13%
Fitness & Economy
Emerging European Markets
Tyrrhenian Sea
Fitness in General
RUSSIA
LITHUANIA
CYPRUS MALTA
Leading Players BBC
4
Big one fitness
2
Family Fitness
3
Holmes Place (Franchise)
3
World Class
Estimated market size (sales in millions)
72.00 e
Estimated market size incl. secondary spending (sales in millions)
79.20 e
Estimated total employees
3,000
Holmes place
Corporate tax rate
24.00%
World Class
VAT rate (general)
19.0%
Total
3 15
International Players Gold’s Gym
Source: Unaudited company data; Deloitte Analysis; CIA World Factbook; Face Czech IHRSA European Market Report © 2008 International Health, Racquet & Sportsclub Association
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ESTONIA ESTONIA
Country Profile
LATVIA
Capital
Tallinn
Area (km²)
45,226
Population (million)
1.3
Population per km²
28.74
GDP per capita, current prices in e
11,946 e
Inflation rate (%)
6.60%
Unemployment rate (%)
4.70%
DENMARK
Baltic Sea
BYELARUS
NETH.
GERMANY
POLAND
UKRAINE LUX.
CZECH SLOVAKIA MOLDOVA
AUSTRIA SWITZERLAND
HUNGARY
ROMANIA
SLOVENIA CROATIA
Black Sea
BOSNIA SERBIA
ITALY
Emerging European Markets
Adriatic
MACEDONIA
ALBANIA GREECE
n/a
Fitness Clubs (commercial)
60
Members (million)
0.0155-0.016
Average members per club
263
Penetration rate
1.21%
Average gross price per month
e45.00 – e50.00
Market Share Leading Players (Number of Clubs) only commercial
10.00%
Fitness & Economy Estimated market size (sales in millions)
8.99 e
Estimated market size incl. secondary spending (sales in millions)
9.9 e
Estimated total employees
650
Corporate tax rate
0% and 22% on distributed profits
VAT rate (general)
18.0%
BULGARIA
MONTENEGRO
Tyrrhenian Sea
Fitness in General Fitness Clubs (public)
RUSSIA
LITHUANIA
TURKEY Aegean
Ionian Sea
CYPRUS
Location
MALTA
Eastern Europe, bordering the Baltic Sea and Gulf of Finland, between Latvia and Russia. Leading Players Arctic Sport
2
My Fitness
2
Arigato
1
Coral Club
1
Status Club
1
Total
7
Source: Unaudited company data; Deloitte Analysis; CIA World Factbook, EIU; Status Club; Planet Fitness
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PRUS
ESTONIA
Country Profile
LATVIA
Capital
Budapest
Area (km²)
93,030
Population (million)
10.0
Population per km²
107.49
GDP per capita, current prices in e
9,798 e
Inflation rate (%)
8.00%
Unemployment rate (%)
7.30%
DENMARK
Baltic Sea
RUSSIA
LITHUANIA
BYELARUS
NETH.
GERMANY
POLAND
UKRAINE LUX.
CZECH SLOVAKIA MOLDOVA
AUSTRIA SWITZERLAND
HUNGARY
ROMANIA
SLOVENIA CROATIA
Black Sea
BOSNIA SERBIA
ITALY
MACEDONIA
Adriatic Tyrrhenian Sea
Fitness in General
BULGARIA
MONTENEGRO
ALBANIA GREECE
TURKEY Aegean
Ionian Sea
Fitness Clubs (public)
n/a
Fitness Clubs (commercial)
270
Members (million)
0.2
Location
Average members per club
741
Central Europe, northwest of Romania, south of Slovakia.
Penetration rate
2.00%
Average gross price per month
32.00 e
Market Share Leading Players (Number of Clubs) only commercial
3.70%
Fitness & Economy Estimated market size (sales in millions)
76.80 e
Estimated market size incl. secondary spending (sales in millions)
84.48 e
Estimated total employees
4,000
Corporate tax rate
16.00%
VAT rate (general)
20.00%
Emerging European Markets
RKEY
HUNGARY
CYPRUS MALTA
Leading Players Alexandra
3
Emotion Fitness
3
A1
2
Gold’s Gym
1
Oxygen
1
Total
10
Source: Unaudited company data; Deloitte Analysis; CIA World Factbook; Emotion Fitness IHRSA European Market Report © 2008 International Health, Racquet & Sportsclub Association
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LATVIA ESTONIA
Country Profile
LATVIA
Capital
Riga
Area (km²)
64,589
Population (million)
2.3
Population per km²
35.61
GDP per capita, current prices in e
8,690 e
Inflation rate (%)
10.10%
Unemployment rate (%)
5.70%
DENMARK
Baltic Sea
BYELARUS
NETH.
POLAND
GERMANY
UKRAINE LUX.
CZECH SLOVAKIA MOLDOVA
AUSTRIA SWITZERLAND
HUNGARY ROMANIA
SLOVENIA CROATIA
Black Sea
BOSNIA SERBIA
ITALY
Tyrrhenian Sea
Fitness in General
BULGARIA
MONTENEGRO
Adriatic
Emerging European Markets
RUSSIA
LITHUANIA
MACEDONIA
ALBANIA GREECE
TURKEY Aegean
Ionian Sea
Fitness Clubs (public)
31
Fitness Clubs (commercial)
87
Members (million)
0.035*
Location
Average members per club
297
Eastern Europe, bordering the Baltic Sea, between Estonia and Lithuania.
Penetration rate
1.52%
Average gross price per month
32.00 e
Market Share Leading Players (Number of Clubs) only commercial
9.20%
Fitness & Economy Estimated market size (sales in millions)
13.44 e
Estimated market size incl. secondary spending (sales in millions)
14.78 e
Estimated total employees
1,300
CYPRUS MALTA
Leading Players Atletica**
4
City Fitness
3
OlympCenters
3
Jokerclubs
1
Reactors
1
Sport Time Total
1 13
Source: Unaudited company data; Deloitte Analysis; CIA World Factbook; Gfitness; Latvian Fitness, Health & Industry Association.
* Membership data might have been overstated by expert in 2006. **Note: Figures from IHRSA EMR 2007
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k
YPRUS
ESTONIA
Country Profile
LATVIA
Capital
Vilnius
Area (km²)
65,200
Population (million)
3.4
Population per km²
52.15
GDP per capita, current prices in e
8,020 e
Inflation rate (%)
5.70%
Unemployment rate (%)
3.20%
DENMARK
Baltic Sea
BYELARUS
NETH.
POLAND
GERMANY
UKRAINE LUX.
CZECH SLOVAKIA MOLDOVA
AUSTRIA SWITZERLAND
HUNGARY ROMANIA
SLOVENIA CROATIA
Black Sea
BOSNIA SERBIA
ITALY
BULGARIA
MONTENEGRO
MACEDONIA
Adriatic Tyrrhenian Sea
Fitness in General
RUSSIA
LITHUANIA
ALBANIA GREECE
TURKEY Aegean
Fitness Clubs (public)
25
Fitness Clubs (commercial)
60
Members (million)
0.035
Location
Average members per club
412
Eastern Europe, bordering the Baltic Sea, between Latvia and Poland.
Penetration rate
1.03%
Average gross price per month
43.00 e
Market Share Leading Players (Number of Clubs) only commercial
25.00%
Ionian Sea
CYPRUS MALTA
Leading Players Impuls
9
Apelsinas/Kitonija
3
Arena/Euro/Sologym
3
World Fitness
2
Total
Fitness & Economy Estimated market size (sales in millions)
18.06 e
Estimated market size incl. secondary spending (sales in millions)
19.87 e
Estimated total employees
950
Emerging European Markets
URKEY
LITHUANIA
17
Source: Unaudited company data; Deloitte Analysis; CIA World Factbook; Gfitness IHRSA European Market Report © 2008 International Health, Racquet & Sportsclub Association
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POLAND ESTONIA
Country Profile
LATVIA
Capital
Warsaw
Area (km²)
312,685
Population (million)
38.1
Population per km²
121.85
GDP per capita, current prices in e
8,536 e
Inflation rate (%)
2.50%
Unemployment rate (%)
12.80%
DENMARK
Baltic Sea
BYELARUS
NETH.
GERMANY
POLAND
UKRAINE LUX.
CZECH SLOVAKIA MOLDOVA
AUSTRIA SWITZERLAND
HUNGARY ROMANIA
SLOVENIA CROATIA
Black Sea
BOSNIA SERBIA
ITALY
Tyrrhenian Sea
Fitness in General
BULGARIA
MONTENEGRO
Adriatic
Emerging European Markets
RUSSIA
LITHUANIA
MACEDONIA
ALBANIA GREECE
TURKEY Aegean
Ionian Sea
Fitness Clubs (public)
n/a
Fitness Clubs (commercial)
800
Members (million)
0.25
Location
Average members per club
313
Central Europe, east of Germany, north of Czech Republic.
Penetration rate
0.66%
Average gross price per month
35.00 e
Market Share Leading Players (Number of Clubs) only commercial
3.88%
Fitness & Economy Estimated market size (sales in millions)
105.00 e
Estimated market size incl. secondary spending (sales in millions)
115.50 e
Estimated total employees
10,000
Corporate tax rate
19.00%
VAT rate (general)
22.00%
CYPRUS MALTA
Leading Players Gymnasion
23
Swedish World Class
4
Shape (Holmes)
2
Gold’s Gym
1
Holmes Place
1
Total
31
Source: Unaudited company data; Deloitte Analysis; CIA World Factbook; Gold’s Gym
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russia ESTONIA
Country Profile
LATVIA
Capital
Moscow
Area (km²)
17,025,200
Population (million)
142.9
Population per km²
8.39
GDP per capita, current prices in e
6,400 e
Inflation rate (%)
11.90%
Unemployment rate (%)
6.50%
Baltic Sea
BYELARUS POLAND
GERMANY
UKRAINE LUX.
CZECH SLOVAKIA MOLDOVA
AUSTRIA SWITZERLAND
HUNGARY ROMANIA
SLOVENIA CROATIA
Black Sea
BOSNIA SERBIA
ITALY
BULGARIA
MONTENEGRO
MACEDONIA
Adriatic
ALBANIA GREECE
Fitness in General
TURKEY
Emerging European Markets
Tyrrhenian Sea
Fitness Clubs (public)
RUSSIA
LITHUANIA
NETH.
RKEY
PRUS
DENMARK
Aegean
Ionian Sea
n/a
CYPRUS MALTA
Fitness Clubs (commercial)
3,000
Location
Members (million)
1.50
Eastern Europe and northern Asia.
Average members per club
500
Penetration rate
5.43%
Average gross price per month
80.00 e
Market Share Leading Players (Number of Clubs) only commercial
4.90%
Fitness & Economy Estimated market size (sales in millions)
1,440.00 e
Estimated market size incl. secondary spending (sales in millions)
1,584.00 e
Estimated total employees
100,000
Leading Players RFG (World Class, Fizkult)*
41
PlanetFitness*
41
Strata Partners (Orange Fitness, City Fitness)*
36
X-Fit*
18
Imperia Fitnessa
15
Total
151
International Players Gold’s Gym* World Gym*
Source: Unaudited company data; Deloitte Analysis; CIA World Factbook; EIU; STRATA Partners
*Both franchise and non franchise operated clubs. IHRSA European Market Report © 2008 International Health, Racquet & Sportsclub Association
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SLOVAKIA ESTONIA
Country Profile
LATVIA
Capital
Bratislava
Area (km²)
48,845
Population (million)
5.50
Population per km²
112.60
GDP per capita, current prices in e
10,043 e
Inflation rate (%)
1.90%
Unemployment rate (%)
8.40%
DENMARK
Baltic Sea
BYELARUS
NETH.
GERMANY
POLAND UKRAINE
LUX.
CZECH SLOVAKIA MOLDOVA
AUSTRIA SWITZERLAND
HUNGARY
ROMANIA
SLOVENIA CROATIA
Black Sea
BOSNIA SERBIA
ITALY
Tyrrhenian Sea
Fitness in General
BULGARIA
MONTENEGRO
Adriatic
Emerging European Markets
RUSSIA
LITHUANIA
MACEDONIA
ALBANIA GREECE
TURKEY Aegean
Ionian Sea
Fitness Clubs (public)
60
Fitness Clubs (commercial)
170
Members (million)
0.035
Location
Average members per club
152
Central Europe, south of Poland, north of Hungary.
Penetration rate
0.64%
Average gross price per month
33.00 e
Market Share Leading Players (Number of Clubs) only commercial
5.29%
Fitness & Economy Estimated market size (sales in millions)
13.86 e
Estimated market size incl. secondary spending (sales in millions)
15.25 e
Estimated total employees
1,300
Corporate tax rate
19.00%
VAT rate (general)
19.00%
CYPRUS MALTA
Leading Players Fitcentrum RELAX
4
GOLEM
2
Europa Fitness
1
Impulse Fitness
1
MAXFIT H&F
1
Total
9
Source: Unaudited company data; Deloitte Analysis; CIA World Factbook; Maxfit Health & Fitness
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PRUS
ESTONIA
Country Profile
LATVIA
Capital
Ljubljana
Area (km²)
20,273
Population (million)
2.0
Population per km²
98.65
GDP per capita, current prices in e
16,700 e
Inflation rate (%)
3.70%
Unemployment rate (%)
7.70%
DENMARK
Baltic Sea
BYELARUS
NETH.
GERMANY
POLAND UKRAINE
LUX.
CZECH
SLOVAKIA MOLDOVA
AUSTRIA SWITZERLAND
HUNGARY
ROMANIA
SLOVENIA
CROATIA
Black Sea
BOSNIA SERBIA
ITALY
BULGARIA
MONTENEGRO
MACEDONIA
Adriatic Tyrrhenian Sea
Fitness in General
RUSSIA
LITHUANIA
ALBANIA GREECE
TURKEY Aegean
Ionian Sea
Fitness Clubs (public)
n/a
Fitness Clubs (commercial)
30
Members (million)
0.009
Location
Average members per club
300
Central Europe, eastern Alps bordering the Adriatic Sea, between Austria and Croatia.
Penetration rate
0.45%
Average gross price per month
29.00 e
Market Share Leading Players (Number of Clubs) only commercial
10.00%
CYPRUS MALTA
Leading Players Sportni Zavod Nova Gorica
3
Total
3
Emerging European Markets
RKEY
SLOVENIA
Fitness & Economy Estimated market size (sales in millions)
3.13 e
Estimated market size incl. secondary spending (sales in millions)
3.45 e
Estimated total employees
405
Corporate tax rate
23.00%
VAT rate (general)
20.00%
Source: Unaudited company data; Deloitte Analysis; CIA World Factbook IHRSA European Market Report © 2008 International Health, Racquet & Sportsclub Association
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TURKEY ESTONIA
Country Profile Capital
Ankara
Area (km²)
780,580
Population (million)
75.2
Population per km²
96.34
GDP per capita, current prices in e
LATVIA DENMARK
Baltic Sea
BYELARUS
NETH.
GERMANY
POLAND UKRAINE
LUX.
4,967 e
CZECH
SLOVAKIA MOLDOVA
AUSTRIA
Inflation rate (%)
6.50%*
Unemployment rate (%)
9.90%
SWITZERLAND
ROMANIA CROATIA
Black Sea
BOSNIA SERBIA
Tyrrhenian Sea
Fitness Clubs (public)
40
Fitness Clubs (commercial)
1,300**
Members (million)
0.35
Average members per club
261
Penetration rate
1.78%***
Average gross price per month
45.00 e
Market Share Leading Players (Number of Clubs) only commercial
1.23%
Fitness & Economy 189.00 e
Estimated market size incl. secondary spending (sales in millions)
207.90 e
Estimated total employees
11,000
Corporate tax rate
20.00%
VAT rate (general)
18.00%
BULGARIA
MONTENEGRO
MACEDONIA
Adriatic
Fitness in General
Emerging European Markets
HUNGARY
SLOVENIA
ITALY
Estimated market size (sales in millions)
RUSSIA
LITHUANIA
ALBANIA GREECE
TURKEY Aegean
Ionian Sea
CYPRUS
Location
MALTA
Southeastern Europe and southwestern Asia, between Bulgaria and Georgia, Greece and Syria. Leading Players Sports International
5
Agaoglu My Club
5
Hillside City Club
3
MAC
2
Essporto Total
1 16
Source: Unaudited company data; Deloitte Analysis; CIA World Factbook; EIU; EKS; Fitnessturk
* Estimated figure of 2008. ** Numbers vary based on different sources and we have used a more conservative estimate. The number of clubs (1,300) includes all fitness facilities such as H&F clubs, hotel fitness centers, sports clubs and corporate facilities. The number of clubs on a membership basis is estimated in the range of 250. Another source estimates the number of clubs to be 1,600 memberships at 550,000 which would result in a larger market size. ***Based on the 12 largest cities.
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RKEY
PRUS
About Deloitte Deloitte Overall Deloitte is one of the leading audit and consulting firms in the world, offering a comprehensive range of services including audit, tax, consulting and corporate finance with more than 150,000 employees in almost 140 countries world-wide.
Deloitte Health & Fitness
About Deloitte
Deloitte Health & Fitness has been specializing in services in the health and fitness sector since 1990. The Health & Fitness team is predominantly recruited from employees of the Corporate Finance service line, but co-operates closely with the other three service lines of Audit, Tax and Consulting to deliver value to its clients. Due to the fitness industry’s increased demand for professional services, Deloitte Health & Fitness now offers a wide range of services including: • Corporate Finance Advisory • Business plan preparation and review • Advising equity and debt investors • Financial/Tax Due Diligence • Commercial Due Diligence • Market and location analysis • Audit and tax advice Furthermore, Deloitte experts from the Health & Fitness competence centre in Germany and the UK co-operate closely with the leading associations in Germany, the UK and internationally. Deloitte counts among its clients the largest and most influential operators of fitness clubs worldwide. In order to continue to increase the transparency in the German and the UK health and fitness market, Deloitte publishes quarterly newsletters containing benchmark data and industry trends. In addition to regular publications, comprehensive market studies are produced periodically. Moreover, this market report covering the overall European market has been prepared in co-operation with International Health, Racquet & Sportsclub Association (IHRSA) and will be repeated regularly. Additionally, Deloitte collaborates with IHRSA to present baseline data and information on the individual markets in the Asia Pacific fitness industry. Deloitte has also published its comprehensive market study about the German Health and Fitness Market of 2007 in April 2008.
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Deloitte Contacts Continental Europe Karsten Hollasch Partner
Schwannstrasse 6 40476 Düsseldorf, Germany Tel +49 (0) 211 8772 3566 Fax +49 (0) 211 8772 2145 E-mail
[email protected]
Stefan Ludwig Senior Manager
Schwannstrasse 6 40476 Düsseldorf, Germany Tel +49 (0) 211 8772 2142 Fax +49 (0) 211 8772 3491 E-mail
[email protected]
About Deloitte
Nordic Market Lars Berg-Nielsen Partner
H.C. Andersen Boulevard 2 Partner DK 1780 Copenhagen, Denmark Tel +45 337 633 33 Fax +45 337 633 34 E-mail
[email protected]
United Kingdom Carol MacKinnon Partner
Athene Place 66 Shoe Lane London, EC4A 3BQ, United Kingdom Tel +44 (0) 207 007 2970 Fax +44 (0) 207 007 2014 E-mail
[email protected]
Asia/Pacific
80
Mike Braun Partner
10/F Bund Center, 222 Yan An Road East Shanghai 200002, P.R. China Tel +86 (0)21 6141 1605 Fax +86 (0)21 6335 0085 E-mail
[email protected]
Alan MacCharles Partner
Tel +86 (0)21 6141 1658 E-mail
[email protected]
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About IHRSA Founded in 1981, The International Health, Racquet & Sportsclub Association (IHRSA) is a not-for-profit trade association representing health & fitness facilities, gyms, spas, sports clubs and suppliers worldwide. It’s mission is: To grow, protect and promote the health and fitness industry, and to provide its members with benefits that will help them be more successful. IHRSA has set an industry-wide goal of reaching 120-million club members worldwide by the year 2010. Membership is open to fitness, racquet and athletic facilities. Associate memberships and Strategic Partnerships are available to suppliers. Headquartered in Boston, Massachusetts, the association currently has more than 9,100 member clubs in 74 countries, and 730 associate members.
IHRSA in EUROPE
In Boston, IHRSA’s international operations staff includes: Cathy McNeil, Vice President (
[email protected]); Alison O’Kane, Assistant Vice President (
[email protected]); Jacqueline Antunes, Manager (
[email protected]); and Blakely Sullivan, Manager (
[email protected]).
About IHRSA
IHRSA has more than 2,000 members in Europe, and has established partnerships with many federations and companies. Hans Muench, IHRSA’s European Director is based in Munich Germany.
Research and Education As one of the world’s leading authorities on the commercial health and sportsclub industry, IHRSA is the source of some of the world’s only primary consumer research and industry economic/operating studies. IHRSA’s research staff includes: Katie Rollauer, Senior Manager, Research (
[email protected]) and Melissa Rodriguez, Manager, Research (
[email protected]).
Consumer Education In recent years IHRSA has expanded its leadership role in the fitness industry, by promoting increased consumer awareness of the benefits of exercise. IHRSA works with others to promote exercise adoption in countries around the world. IHRSA’s consumer web site, www.healthclubs.com, makes it easy for anyone to locate a quality IHRSA member health and fitness facility in more than 70 countries worldwide.
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Annual International Convention & Trade Show IHRSA organizes and runs the industry’s largest and most successful US-based commercial fitness convention and trade show. Held every March, the event attracts over 10,000 attendees from 70 countries, featuring over 1,500 exhibit booths. The educational component feature the highest quality speakers, including in recent years former US President Bill Clinton, Rudy Giuliani, Colin Powell, Arnold Schwarzenegger, Tom Peters, Ken Blanchard, Jim Collins, Faith Popcorn, and many others. The event also features over 75 seminars on every aspect of health club operations, workout classes, and social events. IHRSA will be holding its 28th annual Convention & Trade Show 16-19 March 2009 in San Francisco, CA (US).
About IHRSA
Annual European Congress 23-26 October 2008, the 8th IHRSA European Congress will be held in Lisbon, Portugal. This event is the premier annual gathering of European industry leaders. For information, visit www.ihrsa.org/congress.
IHRSA University IHRSA will hold the 4th annual IHRSA University, a world-class leadership development programme, at the prestigious IESE Business School in Barcelona Spain, 1-5 June 2009. Only 40 candidates will be selected from all regions of the world to participate in this unique, industry-specific programme. Complemented by top executive speakers from within the industry, the course will be taught by the faculty of IESE, which is ranked by Business Week magazine as Number One in the world for custom education programmes. The course includes a leadership profile evaluation before participants come and an actionable Mission Critical Leadership plan 100 days after the weeklong programme. For more information, visit www.ihrsa.org/university.
News Magazines IHRSA publishes Club Business International, the industry’s leading monthly periodical reporting on important global news and trends. In Europe, IHRSA publishes Club Business Europe bimonthly in print and digital formats. CBE is the only pan European magazine for the fitness industry. The digital edition may be viewed at www.ihrsaclubbusiness.com. In Latin America, IHRSA and Fitness Brasil jointly publish Fitness Business Latin America, a bimonthly Portuguese language magazine (with Spanish translation on IHRSA’s website) serving the entire region.
Governance IHRSA is governed by a Board of Directors, with global representation. The Board has designated Joe Moore as president and cheif executive officer. 82
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Additional IHRSA Publications 2008 IHRSA Global Report The 2008 IHRSA Global Report is the most up to date publication on the global fitness business. The report consists of a comprehensive industry overview including opinions on the industry from fourteen different industry leaders from independent clubs, large club chains, and from club associations and federations.
2008 Profiles of Success Compiled by IHRSA and Industry Insights, the 2008 Profiles of Success provides the latest statistics on the North American health club industry such as: membership, patronage, industry revenue, member market share, club member demographics, club operating benchmarks, club growth by region, club prices, payroll, facilities, and income statement statistics, balance sheet data, profitability ratios, and more!
IHRSA’s Guide to Membership Retention — English Version Guia De IHRSA Para La Retencion De Socios — Spanish Version Authored by John McCarthy, IHRSA’s former executive director, this publication assembles what the industry has learned about membership retention over the last 25 years and specifies a comprehensive list of tactical measures that can make a difference in decreasing membership attrition. Additionally, this valuable guide explains the impact of attrition on a club’s bottom line, outlines the characteristics of high-retention clubs and includes case studies of clubs with aboveaverage member retention rates.
IHRSA’s Professional Development and Management DVD Series Because club operators like you have asked for simple, easy, efficient, and affordable ways to train your staff, we are thrilled to introduce the launch of 4 new Sales Training DVDs specific to Health Club Sales.
The Sales Series include: n Managing the Sales Team & Process n Selling Club Memberships n Selling Club Services to Corporations n The Guide to Selling Club Services & Products for Non-Sales Professionals
To order visit www.ihrsastore.com
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Notes
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