24 hour Gyms are enjoying a renaissance as a high-growth segment of the stable fitness industry.
The Gyms and Fitness Centres industry has grown enormously over the past five years while undergoing considerable structural change. The emergence of budget 24-hour gym chains has stimulated the majority of industry growth. Franchises like Stepz Fitness have experienced exceptional growth over the past five years, attracting new customers with their affordability and accessibility. Rising health consciousness and high obesity levels have triggered a further increase in gym memberships. However, many consumers are substituting expensive full-service gym memberships with more affordable 24-hour gym memberships.

The rapid growth of functional fitness-based gyms has attracted affluent and time-poor consumers and supported industry revenue growth. However, a decline in discretionary income over the past three years has contained the industry’s expansion. Overall, industry revenue is expected to grow at an annualised 4.8% over the five years through 2019-20, to $2.5 billion [4].

Australian Fitness Centers Industry Market Drivers

Keeping Aussies healthy and fit is big business. The fitness industry in Australia generates an average of over Two billion dollars in revenue on an annual basis. Altogether, more than 6,620 gyms and fitness centres across the country collectively employ more than 61,200 people. 6.2 million Australians (32%) have a gym membership. Although the COVID19 has impacted revenue, growth is expected to continue. [3]

According to Australian Government Reports, Australia had the 6th highest proportion of overweight or obese people aged 15+ among 22 OECD member countries in 2019. 2 in 3 (67%) adults were overweight or obese in 2017–18—36% were overweight but not obese and 31% were obese.[2] The popularity of weight loss reality TV shows, efforts by the government to promote healthy living and weight loss, and the household outsourcing trend are some of the factors that have contributed to the increase in demand for fitness services and products. Increasing health consciousness aided growth in gym memberships as more Australians became encouraged to live active lifestyles.

Fitness centres provide a cost-effective way for Australians to improve their health and fitness, and it has been proven that they can collectively reduce direct healthcare costs.
A report into the costs of illness attributable to physical inactivity in Australia found that the annual direct health care cost is approximately $377 million per year.[1]

The increasing availability of fitness centres and low-cost fitness alternatives has made it easier for Aussies to keep fit.

Where Does Stepz Fitness Fit in?

With a mission to help 1 million Australians become healthier, fitter and happier. Stepz Fitness will remain a dynamic and high-growing player in the gym and Fitness Industry.

Stepz Fitness is a premier, boutique 24/7 gym franchise that is among the top 10 gym franchises in Australia. Our members have access to a boutique, a friendly and non-intimidating gym that is open 24 hours, seven days a week across our 16 locations in Queensland and New South Wales. The franchise was founded in 2009 and has established a substantial market share.

Stepz Fitness has a competitive pricing model and flexible gym options making it appealing to more Australians. Stepz Fitness was first in the market to successfully combine a tiered pricing model by incorporating Functional Group-Training and 24/7 gym facilities under one roof. The hybrid model is the solution low-cost, high-volume membership trend faced by competitors in the 24/7 gym industry. The new model is now averaging a higher monthly revenue than the most successful 24/7 gyms in the market with half the members.

In 2019, Stepz Fitness unveiled its new brand, which has generated huge interest from various stakeholders looking to invest in a model that fills a gap between 24/7 gyms and boutique group training. The market has responded exceptionally well to the new brand, resulting in the franchise selling five new territories in the first half of this year. The early adoption presents a strong market indicates that this unique combination of F45 style functional training and 24/7 gym is the future of fitness. Across the franchise network, yearly revenues exceed $3.5 million.

The long-term strength, increasing market share and investment opportunity that Stepz Fitness is furthering growth in 2021. Making deals with ASX listed property funds to secure significant new territories.

What Makes Stepz Fitness Franchise Unique?

The unique features that Stepz Fitness provides the market includes:

Always open 24 hours a day, seven days a week: this allows the members to use the premises whenever they like, giving them a feeling that it is their own gym. With the Group-training, a “Blue Ocean” of new customers that haven’t been able to combine costs and value in the market.

Lower membership fees: the Stepz Fitness centres will offer memberships of around half the price of existing larger clubs. We do not have the higher operational cost associated with larger fitness centres.

No contracts: Stepz Fitness offer no-contracts for memberships. Which is attractive to customers who do not want to be on fixed contract agreements. Stepz recognises that customers seek the flexibility of cancelling the memberships at any time they like.

Capped Memberships: Stepz will limit the number of members (to approximately 3.8 members/square meter) to minimise queuing for equipment. Resolving a common problem that currently occurs in larger fitness centres where memberships are not capped.

Low operating cost: The Stepz Fitness model minimises the cost of wages by only employing one full-time staff person. This cuts the average industry wages cost from 22% down to 10% on gross revenues per centre.

Hybrid Franchise Model – By combining functional group training and 24/7 gym membership, Stepz Fitness differentiates itself from all other market players. This model will help increase average membership transaction costs and increase the length of membership. We have raving fans for members. Stepz Fitness inspires tremendous loyalty because of its consistently positive member experience.

Are you interested in learning more? Please head to our Own a Gym and register your interest in owning a Stepz Fitness gym Franchise.

References

[1] J. Stephenson et. al., The Costs of Illness Attributable to Physical Inactivity in Australia, Commonwealth Department of Health & Aged Care and the ASC, 2000, pp vii–viii.

[2] Australian Government Institute of Health and Welfare, https://www.aihw.gov.au/reports/overweight-obesity/overweight-and-obesity-an-interactive-insight/contents/what-is-overweight-and-obesity

[3] Department of Employment 2020, Employment Projections, available from the Labour Market Information Portal website by ANZSIC 3 digit industries, employment projections to May 2024 – 911 Sports and Physical Recreation Activities

[4] Gyms and Fitness Centres in Australia – Market Research Report.IBIS World