Fitness industry growth contained by market saturation and decline in discretionary income of consumers

A decline in the discretionary income of Australians over the past three years has contained the expansion of the fitness industry growth while market saturation is anticipated to play a major part in slower revenue growth in the industry over the next five years.

As revealed by the latest IBISWorld’s latest Gyms and Fitness Centres - Australia Market Research Report, industry revenue has grown at an annualised 4.8% over the five years through to 2018/19 to $2.5 billion in value.

IBISWorld attribute that increasing health consciousness over this past five years, with consumers becoming more aware of the benefits of physical activity, as being a key driver of this growth. This has been fuelled by wider social trends, such as a growing audience for social media fitness models and ongoing promotions by governments.

It also identifies industry growth as being down to facilities being more affordable gyms, with budget 24/7 chains - with lower staffing costs - offering consumers cheaper memberships.

However, it anticipates industry growth to slow to 2.6% a year in the coming five years, due to market saturation.

The report advises “market saturation is anticipated to play a major part in the industry’s slower revenue growth over the next five years.

“Gym membership numbers are forecast to increase at a slower rate than they did over the past five years, as niche gyms catering to all segments of the population have already accessed most consumer markets. These gyms include full-service gyms, women-only gyms and budget 24-hour gyms. However, forecast strong discretionary income growth is anticipated to drive demand for premium gyms over the next five years.”

IBISWorld also suggests that “single-visit programs such as Medibank’s GymBetter will also potentially slow revenue growth, as infrequent users scale back their gym costs to pay smaller per-visit fees.”

Industry revenue is forecast to grow at an annualised 3.1% over the five years through 2023/24, to $2.9 billion.

Click here for more information on IBISWorld’s latest Gyms and Fitness Centres - Australia Market Research Report.