Transcript Document

Similarities and Differences between East
and West European Fitness Industries
„Developed vs. Emerging Markets in Europe”
Dr Laszlo Zopcsak Phd
International Wellness Institute
CEO
Hungarian Health & Fitness Association
President
Budapest, 2013
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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?
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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..
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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
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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!
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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
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Industry Overview
Global Market Size & Scope
60,000,000
Source: IHRSA 2013 Global Report, EHFA
Deloitte Report 2013, Laszlo Zopcsak PhD
50,000,000
53,198,100
42,563,250
40,000,000
30,000,000
24,127,193
17,803,003
20,000,000
12,974,000
6,596,692 1,423,781
1,709,808 20,323
10,000,000
6,380,790
3,030,000 1,379,525
MARKET SIZE
(in millions €)
(total)
Europe
North America
NUMBER OF MEMBERS
(in millions)
(total)
Asia
Australia
South America
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Africa
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
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Industry Overview
Global Market Size & Scope
0,04%
3%
3%
MARKET SIZE %
Revenue €
13%
47%
34%
Europe
North America
Asia
Australia
South America
Africa
Source: IHRSA 2013 Global Report, EHFA , State of Research in
the Global Fitness Industry 2010
Deloitte Report 2013, Laszlo Zopcsak PhD
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Promoting Cooperation, Innovation and Professional Standards for the Fitness Sector
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”
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The European Fitness Sector
Emerging promising
markets
4%
MARKET SIZE
%
Emerging transitional
markets
1%
Developed Struggling
markets
40%
Source: IHRSA 2013 Global Report, EHFA State of Research in the
Global Fitness Industry 2010
Deloitte Report 2013, Laszlo Zopcsak PhD
Developed Mature
markets
55%
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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 club
Developed - Struggling markets
Developed - Mature markets
GDP PER CAPITA (in
thounsands €)
(average)
MEMBER PENETRATION
RATE in %
(market average)
MARKET SIZE
(in millions €)
(total)
NUMBER OF MEMBERS
(in millions)
(total)
Source: IHRSA 2013 Global Report, EHFA
Deloitte Report 2013, Laszlo Zopcsak PhD
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25 €
35 €
7.50
11.27
9.37
12.91
16.52
22.89
Developed Struggling market (DS)
(Spain, Fin, Fr, Cy, Slov, It, Port)
7.00
–Economic turbulence
6.00
–Hardest-hit : SP, Gr, Port,
5.00
–20% decline in industry
Spain
France
4.00
Italy
3.00
Finland
2.00
indicators
–Fin, Cy, Slo, Fr. Grappling
–Long-term instability
Portugal
1.00
Greece
0.00
Ireland
NUMBER OF
MEMBERS
(in millions)
MARKET SIZE
(in billions €)
Source: IHRSA 2013 Global Report, EHFA
Deloitte Report 2013, Laszlo Zopcsak PhD
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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
Czech
Republic
MARKET SIZE
(in millions €)
Croatia
Hungary
NUMBER OF
MEMBERS
(in
thousands)
Turkey
Poland
0
500
1000
Source: IHRSA 2013 Global Report, EHFA
Deloitte Report 2013, Laszlo Zopcsak PhD
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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
Source: IHRSA 2013 Global Report, EHFA
Deloitte Report 2013, Laszlo Zopcsak PhD
Estonia
Slovakia
Latvia
MARKET SIZE
(in millions €)
Romania
Lithuania
NUMBER OF
MEMBERS
(in thousands
Bulgaria
Slovenia
Serbia
0
100
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200
Comparing the EU market
Developed - Mature markets
Developed - Struggling markets
Emerging - promising markets
Emerging - transitional markets
22.89
Source: IHRSA 2013 Global Report, EHFA
Deloitte Report 2013, Laszlo Zopcsak PhD
16.52
12.91
11.27
9.37
7.50
1.85
0.46
NUMBER OF MEMBERS
(in millions)
(total)
2.26 1.71
0.91 0.19
MARKET SIZE
(in billions
millions€€)
In
(total)
MEMBER PENETRATION
RATE in %
(market average)
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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
Eurostat 2013, IHRSA European HC Report
2013, Laszlo Zopcsak PhD
f. Impact of VAT
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VAT Rate
30%
25%
20%
15%
10%
VAT Rate
%
5%
0%
Eurostat 2013, IHRSA European HC Report 2013, CIA
Factbook, Laszlo Zopcsak PhD
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Differences between developed & emerging
markets
Comparison of Member penetration Rate and
Purchasing Power Parities
12%
10%
8%
6%
4%
2%
0%
11.27%
50
7.52%
40
39.24
30
24.12
2.26%
5.97
Developed Mature markets
20
1.71%
6.16
10
0
Developed Emerging Emerging Struggling
promising
transitional
markets
markets
markets
MEMBER PENETRATION RATE in %
(market average)
Purchasing power parities (PPPs)
Eurostat 2013, IHRSA European HC Report
(average)
2013, CIA Factbook, Laszlo Zopcsak PhD
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Differences between developed & emerging
markets
50.00
45.00
45 €
38 €
40.00
35.00
AVERAGE MONTHLY
MEMBERSHIP FEE (in €)
(commercial clubs)
30 000 €
30.00
25.00
20.00
15 000 €
15.00
GDP PER CAPITA
(in thounsands €)
(average)
MEMBER PENETRATION
RATE in %
(market average)
10%
10.00
2%
5.00
Eurostat 2013, IHRSA European HC Report
2013, CIA Factbook, Laszlo Zopcsak PhD
0.00
Developed
Emerging
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Similarities - general problems in EU &
worldwide
2. Health Concerns
a. Lack of PA (Eurostat) – indifference to exercise
b. NCD (HUB)
c. Ageing (Eurostat)
Eurostat 2013, IHRSA European HC Report
2013, CIA Factbook, Eurobarometer 2010,
WHO 2011, Laszlo Zopcsak PhD
d. Obesity (WHO)
e. High obesity vs. low activity (fat less active) motivation
INTERNATIONAL STANDARDS MEETING
Promoting Cooperation, Innovation and Professional Standards for the Fitness Sector
Similarities - general problems in EU &
worldwide
Comparison of GDP per capta and Obesity rate
25%
20%
20.6%
16.1%
16.4%
14.6%
15%
10%
5%
0%
Developed Mature markets
Developed Struggling
markets
GDP PER CAPITA (in €)
(average)
Emerging promising
markets
40,000 €
35,000 €
30,000 €
25,000 €
20,000 €
15,000 €
10,000 €
5,000 €
- €
Emerging transitional
markets
Obesity Rates: OECD* European Countries
(average)
Source: IHRSA 2013 Global Report, EHFA
Deloitte Report 2013, Laszlo Zopcsak PhD
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FI specific challenges – EP/ ET
Public 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
Eurostat 2013,
IHRSA European
HC Report 2013,
CIA Factbook,
Eurobarometer
2010, WHO
2011, Laszlo
Zopcsak PhD
5. 65 years of age or older increasing steadily
6. Lowest life expectancy at birth, EU27 by 5.1 yrs
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FI specific challenges – Emerging - EP/ ET
Public Health
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FI specific challenges – Emerging - EP/ ET
Public Health
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FI specific challenges – EP/ ET
Business
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
Eurostat 2013,
IHRSA European
HC Report 2013,
CIA Factbook,
Eurobarometer
2010, WHO 2011,
Laszlo Zopcsak
PhD
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
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Attitude – How often do you exercise?
Eurobarometer 2010,
Laszlo Zopcsak PhD
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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
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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!
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Promoting Cooperation, Innovation and Professional Standards for the Fitness Sector
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!
INTERNATIONAL STANDARDS MEETING
Promoting Cooperation, Innovation and Professional Standards for the Fitness Sector
INTERNATIONAL STANDARDS MEETING
Promoting Cooperation, Innovation and Professional Standards for the Fitness Sector
The role of EHFA and the ISM in the future of
the EU Fitness Industry
• Adapt accreditation, quality management, evidencebased 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
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Promoting Cooperation, Innovation and Professional Standards for the Fitness Sector
Thank You!
Köszönöm!
(Egészségedre! Cheers, salute)
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Promoting Cooperation, Innovation and Professional Standards for the Fitness Sector