Quo Vadis - What will be the impact of COVID-19 on the European fitness market?

By Herman Rutgers

On September 30, at the European Health & Fitness Forum in the FIBO TV Studio in Düsseldorf, the highlights of a new study supported by FIBO were presented. This research examined the pandemic's short- and longer-term impacts on European fitness club operators and supports some optimism for the recovery and future of our sector.

Main conclusions were that European fitness operators will face increased consolidation, accelerated digitalization and the new reality of creating hybrid models due to the COVID-19 pandemic, according to the study.  In addition the sector is switching its focus to refinancing and building stronger balance sheets, as well as rethinking overall business strategies.

The research is based on information from the top 60 European multi-site gym operators regarding various elements of their business and used the data as a basis for an assessment of the impact of the pandemic and the interviews took place in August 2020. Also third party research was used.

Back to pre-crisis level by the end of 2021

As for economics, the report – commissioned by EuropeActive – states that it is "impossible" to make accurate, long-term predictions, partly due to infections currently being on the rise across the Continent and with further lockdowns possible.

However, there is an expectation among multi-site operators that they will bounce back to pre-COVID levels 'by end of 2021'.

This is reflected in the overall confidence of major European club operators, who consider their existence to be "only partially endangered", assuming there are no further forced club closures.

None of the operators questioned for the report stated that their existence was – or will be – either "severely" or "highly threatened" over the next five years (until 2025).

Strong signals and positive future indicators

As the report's co-editor and EuropeActive project leader I believe this research supports some optimism for the recovery and future of our sector which was confirmed by the positive indications from investors and analysts who committed additional investments in the last couple of months to both club operators as well as suppliers, particularly in the digital sphere. It is encouraging that big technology players like Apple (with the launch of the streaming service Apple Fitness+) and Amazon (launch of Halo).

It is clear that fitness must be considered as a strategic part of the solution, and not as a problem. We already have good data from over 25 million visits to health clubs since the reopening that confirm that they are safe places to go to, with extremely low levels of traceable COVID-19 infection.

Concentrated power: Together against the crisis

Although 2020 has been incredibly demanding for our industry – indeed for most parts of society – we also saw our sector coming together like never before, in a united fashion through EuropeActive and national association partners, to deliberate on solutions for our sector’s future, to collegially share best-practice, and to run campaigns like the #BeActive Hour to which FIBO was a strong partner.

Europe-wide most severely affected: Spain and UK

It also includes detailed overviews on individual countries and a number of selected operator case studies. The countries with the biggest negative impact were logically also the countries with the biggest number of Corona patients as well as the longest lockdown; Spain and the UK.  It was interesting to see in the study that there were actually 3 groups of countries; the biggest impact – UK and Spain; the lowest impact – Nordics, Germany Switzerland; and a group in the middle – Netherlands, France, Italy.

Booming: budget studios, digitalization, home & outdoor fitness

Every cloud has silver lining as they say, so there were also parts of our fitness ecosystem that grew spectacularly during the crisis and lockdown. Because clubs were closed, people were confined to their homes, so companies selling home fitness equipment and accessories, streamed home fitness services and outdoor fitness did very well. Service providers and software companies saw demand surge as many operators and trainers had to get ready to stream their services.

Looking at the various types of fitness clubs, based on reports from operators and analysts it is expected that the budget operators will be the quickest to recover as they have larger surfaces, the lower level of commitment required for a membership, a younger client profile and a strong digital offering. They seem also to be in a stronger financial position. A recent report from the French association Union Sport & Cycle for the September results  seemed also to be the concluding this.

Quo Vadis? Outlook 2030.

The report concludes that in spite of the fact that 2020 will be an “annus horribilis” - not be a good year and also 2021 may be tough ( depending on how soon a vaccine will be widely available ) – the overall sector goal of “100 million members” in health clubs in Europe by 2030 is still possible to be achieved. If anything,  the importance of regular physical activity and fitness will improve one’s immune system and thus the resilience for viruses in the future!

The Covid-19 Impact Study “Quo Vadis” can be purchased from the EuropeActive knowledge center on the website.

Herman Rutgers, 3 October 2020