In June, EuropeActive commissioned a study to find out more about the short and longer term impacts to European fitness club operators as a result of the Covid-19 pandemic. The report was researched and drafted by Deloitte with an objective to gather information from top operators in Europe based on a number of key business KPIs.
Karsten Hollasch, Partner and Head of Consumer Business at Deloitte who led the research team in cooperation with Stefan Ludwig, Head of Sports Business Group, said: “In these extraordinary times, where the situation is very fluid, we considered it more worthwhile to focus on one key area of the sector rather than trying to capture a wider perspective that might not give much clarity at this stage. We don’t know yet exactly what the full impact ultimately will be because obviously, the crisis is not over yet, and at the moment, we see a surge in cases. So with the time available we decided to base our research on key multi-site operators in Europe.”
Research methodology
The fieldwork was based on a specially designed questionnaire and took place in August after almost all countries had reopened their facilities. In Addition, the report is complemented by further third party research in a number of European countries as well as selected case studies of listed European operators. The study was presented at the European Health and Fitness Forum (EHFF), which took place in Düsseldorf on 30th September.
Other consistent findings with respect to European operators indicate short-time work for employees, the need for government grants and/or other fiscal measures of support, and overall shortfalls of expected fitness club memberships. However, significant differences have been experienced across European countries. Average income shortfalls for 2020 are expected at ~30% and for 2021 at ~11%. However, research conducted in Spain expects a drop in revenues of 40% in 2020 when compared to 2019 results.
Most surveyed operators indicated a moderate overall risk of going out of business. The response is based on the assumption of no further prolonged closures. Many companies expect to maintain recent capacity improvements and plan to be close to pre-Covid levels in terms of revenues and memberships by the end of 2021.
Co-editor and EuropeActive project leader Herman Rutgers commented: “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 to our larger European operators. 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 20 million visits to health clubs that they are safe places to go to, with extremely low levels of traceable Covid-19 infection.”
Digitalisation in the spotlight
The use of digital channels and technologies allowed the operators to keep in touch and engage with their customers and members during the crisis. A pattern of increased digitalisation of the industry partly driven by the Covid-19 experience was supported by third party research in the study.
According to Virtuagym’s Covid-19 impact study, the number of fitness app users reached its first peak in March, when Covid-19 started spreading in Europe. However, the eventual peak was reached in July, when clubs started to re-open which indicated that in-person club visits and the use of digital offerings can coexist (and possibly accelerate each other) rather than a pure competition.
EuropeActive Executive Director Andreas Paulsen concluded: “Understanding how the Covid-19 pandemic and the shutdown has factually effected our sector is absolutely essential to how we adjust and adapt as a sector in order to become the best future version of ourselves and open the next great chapter of the European fitness and physical activity sector".
"We are certainly at a critical and challenging time of our sector’s history. Factual knowledge is essential to understanding the real impact of Covid-19 and to responding effectively as businesses, as well as trade associations, like EuropeActive and our national association partners".
"We understand that actors, large and small, across the European fitness and physical activity sector are facing severe difficulties, and with our new European Covid-19 impact assessment with Deloitte we will be able to assist our sector, in partnership with national associations, much more effectively and lead towards fulfilling our sector’s future potential".
"Conclusively, I would like to thank our data-collection partners and main sponsor, FIBO, and co-sponsors, BRP Systems / Sport Solution and Virtuagym, for making yet another great EuropeActive publication available for our sector’s leaders and businesses".
The Covid-19 Impact Study can be purchased from our Knowledge Centre here: https://europeactive.blackboxpublishers.com/en/
EuropeActive’s members can purchase the study at a discounted price.
The Covid-19 Impact Study has been made possible thanks to the generous support from FIBO as main sponsor and Virtuagym and BRP Systems/Sport Solution as co-sponsors.