international standards meeting promoting cooperation, innovation and professional standards for the...

INTERNATIONAL STANDARDS MEETINGPromoting Cooperation, Innovation and Professional Standards for the Fitness Sector

Similarities and Differences between East and West European Fitness Industries

„Developed vs. Emerging Markets in Europe”

Dr Laszlo Zopcsak PhdInternational Wellness Institute

CEOHungarian Health & Fitness Association

President

Budapest, 2013


The purpose of my presentation to answer these questions:

• What are the reasons for lagging behind the

developed markets and how to catch up?

• What are the similarities and differences?

• Do we have specific challenges?

• How could we find possible solutions to maintain

professionalism and growth?


It started with the Prague spring…

…Brussels autumn - London winter – Madrid… Barcelona …

• During EHFA conferences I realized the HOT topics of West

European (WE) Fitness Industry (FI) such as:

• Music licensing, member retention, set up minimum standards,

• Creating REPS, HK Book projects,

• Developing education materials,

• Liability insurance, etc..


How can I bring “West European” experience to Hungary?

1. Jumped into the mission of sectoral cooperation

2. We formed the HHFA

3. Since founding HHFA we had 10 events:

–ERESP promotion conference

– Regular management meetings

– International Scientific Fitness Conference in May


The reality…

Realized that it is not working to copy WE, we have to adapt

Convince the market

Fitness Clubs (FC) still underrepresented. Why?

Few FC membership in HHFA

This is a very slow process!


What are the reasons for lagging behind developed markets and how to catch up?

1. Global Industry Overview

2.The phases of “Fitness evolution”

3. European Industry Overview

4. Similarities

5. Differences

6. Solutions


Industry Overview Global Market Size & Scope

MARKET SIZE(in millions €)

(total)

NUMBER OF MEMBERS (in millions)

(total)

-

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

24,127,193

42,563,250

17,803,003

53,198,100

6,596,692

12,974,000

1,709,808 3,030,000 1,423,781 6,380,790

20,323 1,379,525

Europe North America AsiaAustralia South America Africa

Source: IHRSA 2013 Global Report, EHFA Deloitte Report 2013, Laszlo Zopcsak PhD


References*• Industry experts!• EHFA Deloitte Report 2013• State of Research in the Global Fitness Industry 2010• HUB 2010• WHO 2011• Eurostat 2013• Eurobarometer 2010• Hungarostudy 2009• WHO Report 2011• IHRSA European HC Report 2013• IHRSA Trend Report 2013• CIA Factbook 2013• Data Leisure Company 2013*statistics are liable to change drastically


Industry Overview Global Market Size & Scope

47%

34%

13%

3% 3% 0,04%

MARKET SIZE %

EuropeNorth America AsiaAustralia South AmericaAfrica

Revenue €

Source: IHRSA 2013 Global Report, EHFA , State of Research in the Global Fitness Industry 2010Deloitte Report 2013, Laszlo Zopcsak PhD


The phases of fitness evolution

Same phases everywhere, but CEE is in earlier phase

•Developed - mature (leading - Germany, Norway, NL, UK) - DM

•Developed - struggling (Spain, Fin, Fr, Cy, Sl, It, Port, Ir) - DS

•Emerging - promising (Pol, Hu, Turk, Croatia) - EP

•Emerging –transitional* (Bulg, Serb, Baltic, Ro) – ET

*(RUS, Ukraine, some former Yugoslav states excluded)

Scope of services, quality of service, market size, number of clubs, sectoral

cooperation, professionalism, socioeconomy - „maturity”


The European Fitness Sector

Developed - Mature markets

55%

Developed - Struggling mar-

kets 40%

Emerging - promising markets

4%

Emerging - transitional markets

1%

MARKET SIZE%

Source: IHRSA 2013 Global Report, EHFA State of Research in the Global Fitness Industry 2010Deloitte Report 2013, Laszlo Zopcsak PhD


Developed Mature market (DM)Germany, Norway, NL, UK

–Germany steady growth

–UK grown by 1.5%, within a year

–NL fitness sector stable

–4,5 % increase in No. of members.

–Norway: – 2nd highest GDP/capita

•25 % of Norw. above 15 yrs

member of a clubNUMBER OF MEMBERS

(in millions)(total)

MARKET SIZE(in millions €)

(total)

MEMBER PENETRATION RATE in %(market average)

GDP PER CAPITA (in thounsands €)(average)

22.89

12.91

11.27

35.18

16.52

9.37

7.50

24.87

Developed - Struggling markets Developed - Mature markets



Developed Struggling market (DS)(Spain, Fin, Fr, Cy, Slov, It, Port)

–Economic turbulence

–Hardest-hit : SP, Gr, Port,

–20% decline in industry

indicators

–Fin, Cy, Slo, Fr. Grappling

–Long-term instability NUMBER OF MEMBERS

(in millions)

MARKET SIZE(in billions €)

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

SpainFranceItalyFinlandPortugalGreeceIreland



Emerging promising market (EP)Poland, Hungary, Turkey, Croatia

• Uncertainty, high rental fees and overhead expenses

• Poland leading emerging market• Turkey €271 m , 1,550 fitness

facilities.• Profitable prospects• The level of professionalism is

increasing• Big gap between big cities and

smaller towns• No long term commitments• No DDP (EFT) payment

Poland

Turkey

Hungary

Croatia

Czech Republic

0200

400600

8001000

MARKET SIZE(in millions €)NUMBER OF MEMBERS (in thousands)



Emerging transitional market (ET) (Bulgaria, Serbia, Baltic states, Romania)

• They do not invest in knowledge • No planning• Lack of professionalism• Old equipmnts• Bank loans not available for

financing• No tax deduction or other

incentives• Membership is quite expensive,

too expensive• Cancellation in summer

Serbia

Slovenia

Bulgaria

Lithuania

Romania

Latvia

Slovakia

Estonia

0 40 80120

160

MARKET SIZE(in millions €)NUMBER OF MEMBERS (in thousands)



Comparing the EU market

NUMBER O

F MEM

BERS

(in m

illions)

(total

) MARKET SI

ZE

(in m

illions €

)

(total

)

MEM

BER PENETRATION RATE in

%

(mark

et ave

rage)

22.89

12.91 11.2716.52

9.37 7.501.85 0.91 2.260.46 0.19 1.71

Developed - Mature markets Developed - Struggling markets Emerging - promising markets Emerging - transitional markets

In billions €



Similarities - general problems in EU & worldwide

1.Economy

a. EU is most Lucrative

b. Downturn or recession?

c. Unemployment

d. Public debt

e. Club closing

f. Impact of VAT

Eurostat 2013, IHRSA European HC Report 2013, Laszlo Zopcsak PhD


DS EPDM ET

Belgium

Lowest

- Norw

ay

Highest - H

ungary 0%

5%

10%

15%

20%

25%

30%

VAT Rate

VAT Rate %

Eurostat 2013, IHRSA European HC Report 2013, CIA Factbook, Laszlo Zopcsak PhD



Developed - Struggling markets


Emerging - transitional

markets

0%

2%

4%

6%

8%

10%

12%

05101520253035404511.27%

7.52%

2.26% 1.71%5.97

24.12

39.24

6.16

Comparison of Member penetration Rate and Purchasing Power Parities

MEMBER PENETRATION RATE in %(market average)Purchasing power parities (PPPs)(average)

Differences between developed & emerging markets

Eurostat 2013, IHRSA European HC Report 2013, CIA Factbook, Laszlo Zopcsak PhD


Differences between developed & emerging markets

Developed Emerging0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

45.00

50.00

AVERAGE MONTHLY MEMBERSHIP FEE (in €)(commercial clubs)GDP PER CAPITA (in thounsands €)(average)MEMBER PENETRATION RATE in %(market average)

45 €

38 €

15 000 €

30 000 €

10%

2%Eurostat 2013, IHRSA European HC Report 2013, CIA Factbook, Laszlo Zopcsak PhD



2. Health Concerns

a. Lack of PA (Eurostat) – indifference to exercise

b. NCD (HUB)

c. Ageing (Eurostat)

d. Obesity (WHO)

e. High obesity vs. low activity (fat less active) -

motivation

Eurostat 2013, IHRSA European HC Report 2013, CIA Factbook, Eurobarometer 2010, WHO 2011, Laszlo Zopcsak PhD




Developed - Struggling markets


Emerging - transitional

markets

0%

5%

10%

15%

20%

25%

- €

10,000 €

20,000 €

30,000 €

40,000 €

14.6% 16.4%20.5%

16.1%

Comparison of GDP per capta and Obesity rate

GDP PER CAPITA (in €)(average)Obesity Rates: OECD* European Countries(average) Source: IHRSA 2013 Global Report, EHFA

Deloitte Report 2013, Laszlo Zopcsak PhD


FI specific challenges – EP/ ETPublic Health

1. Mortality high middle aged men (WHO 2011)

smoking, alcohol consumption, unhealthy diet, inactivity.

2. Active working years less

3. Worst health status in Europe (Hungary)

4.Population decreasing since the 1980s

5. 65 years of age or older increasing steadily

6. Lowest life expectancy at birth, EU27 by 5.1 yrs



FI specific challenges – Emerging - EP/ ETPublic Health


FI specific challenges – Emerging - EP/ ET Public Health

http://www.viewsoftheworld.net/wp-content/uploads/2011/10/WorldPopulationAnimation.gif


FI specific challenges – EP/ ETBusiness

1. Lack of fitness management knowledge

2. High rental fees in foreign currency

3. Different mentality (Hungarostudy)

4. Attitude problems (Euro barometer)

5. Foreign (English) Language barriers

6. Fitness young sector in EM – 20 yrs behind DM

7. Normal cycle will speed up by western investments

Infrastructure is OK – but knowledge, attitudes are limited



Attitude – How often do you exercise?Hunga

ry

Netherlands

Eurobarometer 2010, Laszlo Zopcsak PhD


FI specific challenges – Emerging - EP/ ET Political

1. Intersectoral activities are poorly coordinated

2. Prevention and health promotion underfunded

3. H&F organizations underdeveloped, activities

substantially curtailed

4. No government incentives - extra tax for fitn. membsh. as benefit

5. HOC – Olympic sports - leisure sports – fitness

6. Eastern countries - Olympic sports vs. HEPA


Why fitness clubs are underrepresented even here?

1. Vast majority of investors, owners are from different

business

2. Ignore the necessity of fitness management - trainers are

appointed in this position

3. Relevant stakeholders are struggling with other daily

problems like marketing, financing etc.

4. A lot of work has to be done for us in this regard

5. Lack of foreign language knowledge

Most of all - Business knowledge needed!


What is the magic formula to create a solid fitness market in the CEE region?

(For emerging markets)

1. Gather the industry stakeholders for a meeting

2. Form a sectoral association

3. Hire a part time staff to do the daily task pre-invest

4. Organize business events for managers, owners

5. Set up local register

6. Contact government authorities, get them involved

7.Repeat your effort (reps&sets) with patience, persistence,

consistence until growth is achieved – EHFA’s motivation crutial!


The role of EHFA and the ISM in the future of the EU Fitness Industry

• Adapt accreditation, quality management, evidence-

based proceedings to this market - IWI

• Launch an EHFA East and Central Europe Task Force

• Regular regional conferences CE FORUM

• Statistics on this region also – EHFA - Deloitte

• Programs to raise public awareness - HEPA

• Affiliation of EHFA accredited TP’s – IWI-GRAFTS


Thank You!

Köszönöm!

(Egészségedre! Cheers, salute)

international standards meeting promoting cooperation, innovation and professional standards for the...

Documents

professional standards

global fitness industry

minimum standards

fitness sector similarities

fitness sector references

european fitness sector

global report

fitness industry fi