Steep drop in membership of Health Clubs

Published: 25/08/2006

UK fitness clubs had 53,500 fewer members in June 2006 compared to the previous year as the impact of rising interest rates and falling consumer confidence begins to take hold, according to the HealthClubBenchmark^® Survey by Deloitte.

Latest data shows the number of people joining health clubs has fallen on average 8% for January to June versus the same period last year. Monthly membership subscriptions at a UK health club average £39.05 according to the survey and encouragingly these have increased 3.5% over the past 12 months. However, the fall in members has meant total revenue from subscriptions has improved on average by just 1.5% over the year.

Deloitte’s analysis shows that clubs have attempted to stimulate new memberships through decreased joining fees. These have dropped by 17% January to June 2006 on the same period last year.

Adrian Balcombe, leisure partner at Deloitte says: “Despite government initiatives to promote exercise we have seen a decrease in the number of people paying for health club membership. With conditions becoming tougher in the UK domestic economy, many consumers are opting to cut their discretionary spending. The leisure industry, like all consumer-focused businesses is entering a tough time.

 “With total operating costs for health clubs on the rise, profit margins for the industry are under pressure. To succeed in the current economic conditions, health clubs and leisure centres need more variable pricing structures and to retain members through improved service and a more enjoyable exercise experience. Lowering joining fees may help attract new members but will not retain existing members who may be looking to cut back discretionary spending.”

He adds: “The industry needs to react quickly, as, despite heightened awareness of obesity problems and the link between health and fitness, consumers are not yet opting to join health clubs, and clubs are not achieving expected growth in member numbers.”

The survey shows all 13 UK regions struggled to generate new members, with no region improving on last year’s performance. Inner London health clubs have been most resistant to economic pressures, while clubs in Northern Ireland and the West Midlands were hardest hit, with membership numbers falling 7.6% and 6.5% respectively compared to June 2005.

UK Health Club key performance indicators (January - June 2006)

* Percentage change compared to the prior period January to June 2005
Source: HealthClubBenchmark^® Survey by Deloitte

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Notes for editors