The big business of body worship: young people raid gyms and attract investment funds

Gyms have recovered their muscle tone.

Estimates suggest that in 2023, for the first time since the pandemic, the sector's turnover will exceed that achieved in 2019: 2,352 million euros, with data from Deloitte.

It seems incredible that it hasn't happened before, at least based on what is seen on the streets of the big cities, where the opening of centers continues to increase.

Large, small and medium.

Specialized or not.

Gyms pop up like mushrooms almost on every corner.

With brands like Brookyn Fitboxing with more than 175 centers or VivaGym and Basic-Fit far exceeding one hundred.

And, although more than half of Spanish society is sedentary, people have become aware that physical activity allows them to live longer and better.

Furthermore, the young public has transformed the clubs into their meeting point, justifies Mario Barbosa, CEO of GOfit: “They train more frequently than before and come in groups.”

It is a cheap way to enjoy your leisure.

“The sector is experiencing its moment of greatest optimism” since covid-19, highlights the report from the consulting firm BDO, in which 87% of companies declare themselves to be in a good or very good economic situation, after having overcome the loss of customers (especially older ones) caused by the pandemic.

Today nine out of ten expect their attendance to increase.

It is already being appreciated, says Alberto García Chápuli, manager of the National Federation of Sports Facilities Entrepreneurs (FNEID): those who practiced sports, after the covid, practice it more, they have gone from 2.3 times a week to 3.7 times .

Surely that is one of the great incentives that is driving the concentration of the sector, led by investment funds.

“In the last year and a half there have been many purchase and refinancing operations carried out by funds, which are very active,” says Alberto Puente, partner of Deloitte's Financial Advisory.

Although only one major operation has emerged during 2023 (the purchase by Basic-Fit, which has declined to participate in this report, of Mcfit and five Holmes Place clubs), the transactions closed in Europe during 2023 have been abundant (for For example, BestFit acquired Flexx Fitness and also Five Star Fitness, NRG Fitness bought Health Clubs, ProFit Gym acquired Smart-Fit...) and they are a preview of what is coming in the national territory, in the opinion of Pelayo Novoa, BDO partner.

In Spain, a large part of the operators have been in the hands of funds for years (VivaGym, Altafit, Forus, Beone, Supera...).

They should have disinvested but the pandemic prevented them, stopping injecting money into chains with great growth plans, explains Novoa, who are now looking for capital to reactivate them.

Growth

This is recognized by the head of GOfit, owned by Torreal and Mutua Madrileña, with 20 gyms and three more under construction (Tenerife, Turin and Milan) and 230,000 clients.

“We are going to resume the expansion that we had to stop with the covid.

We want to open two gyms a year with an average investment of about 20 million euros for each one and we are working with Arcano to find financing,” says Barbosa.

His investment horizon is seven years and his target markets are Spain, Portugal and Italy.

GOfit is one of the largest chains in the sector in the concession regime (the one that generates the most business, according to BDO, with large clubs and whose municipal use cession usually lasts for 40 years, and where some infrastructure fund is considering entering).

In 2023 it had a turnover of 77 million euros, 10 more than a year before.

Metropolitan is the leader in its market segment: premium gyms, where investment funds are not getting involved at the moment, according to its director, Albert Soler.

With 21 clubs whose average price is 90 euros and 82,000 members, the firm will invest 23 million euros in opening new gyms in Madrid, Galicia, Mallorca and Nice this year.

Metropolitan, owned by José Antonio Castro, owner of Hesperia, had a turnover of 70 million euros last year, 12 more than the previous year.

These ambitious plans are not comparable with those managed by low-cost gym chains, the segment with the most traction in recent years and whose centers are usually smaller in size.

For example, Basic-Fit, which has 140 clubs, aims to open between 450 and 700 more by 2030. Fitness Park expects fifteen openings this year and VivaGym has announced at least a dozen.

In addition, the largest chain of low-cost

gyms in the world is expected to arrive

: the American Planet Fitness, which wants to open 300 centers.

The big boom experienced by low-cost clubs, benefiting from the inflationary crisis, has led them to raise prices, says Novoa, so that if 10 years ago they earned an average of 20 euros per month, they now earn 30. And 86% of The businessmen interviewed by BDO expect that this year the prices of fertilizers will continue to rise.

With 5.5 million users in Spanish private gyms and sports centers and 2.1 billion in turnover in 2022 (latest data available), in addition to the rejuvenation of users and their greater influx to clubs, there are other trends that have made their way after the pandemic.

Today, users prefer strength to machines, they do weights above all else, although body-mind classes remain in high demand, according to García Chápuli.

Social networks are another element in the gym, since “many people come with their cell phone and do the exercises following their favorite

influencer

,” he adds.

And a good part of the customers who paid the subscription but did not go to the club have disappeared.

If before they exceeded 20%, now they are at most 5%, indicates Soler.

According to Puente, Spain has recovered faster than other European markets because sport has a more pronounced social concept.

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