Big-box & Mid-box
Insights

Market Players

The Bigger Got Better and The Better Got Best (Well Mostly)

The recovery of the big box clubs continued in 2024 as consumers chose more frequently to join (or return to) bigger clubs and benefit from a wide and diverse array of health, fitness, sports and wellness services. There were notably two camps however, with balance sheet health splitting the two. Camp one, clubs still struggling to reach previous membership bases (and revenue figures) and resultantly did not have the capital (and/or investor confidence) to reinvest and modernise/upscale their offering. Camp two, clubs that have capital to invest and who modernised and added several new features such as: contrast therapy, recovery areas, social spaces, more functional training space, more plates and racks, pickleball and padel – naturally these clubs are doing better. We saw big clubs confirm partnerships with aggregators (ClassPass, WellHub) and mass-participation races (i.e. HYROX). In the US, big clubs are experimenting with incorporating health consultations and GLP-1 related services and programming into their membership offering. Finally, many big boxes also started to experiment with new higher-tier VIP membership pricing for comprehensive wellness offerings, with some annual memberships rising to $100,000 a year (Continuum)! Wow.

Dr. Jobst Müller-Trimbusch

CEO
RSG Group

2024 should be regarded as the first stable Post-COVID fiscal year showing a massive mobilization of institutional funds into the industry. We expect this trend to continue which can be seen as a good sign as it reflects the growth potential in all segments of the market. However, it will also have an impact on market dynamics, driving price competition and oversupply in some regions and segments. For capital market-oriented participant there is a different set of rules compared to founder/ family owned businesses as RSG. Membership adds is a key benchmark but profitability stays pivotal for sustainable growth. We strongly believe that quality and authenticity of the product will even more become a driver for long-term success.

In 2024, Fitness First Middle East experienced remarkable growth, achieved record membership levels and established a forward-thinking approach that will solidify our status as the legacy player in the region. Looking ahead, we are embarking on an exciting transformation for the business, which includes the launch of six new clubs and the initiation of an extensive refurbishment program and product offering for our existing facilities. Behind the scenes, we are also enhancing our digital membership platform and ways of working with staff and communities to strengthen our position as the largest fitness operator in the UAE, while implementing a revamped growth strategy for the broader region. As our ownership, Landmark Group, celebrates its 50th anniversary in the Middle East, the combination of this milestone and fresh investments sets the stage for an exciting 2025 for the company. More generally I feel the industry faces significant challenges that many operators (of all sizes) may find daunting. Rising costs, high staff turnover, and intense competition are creating a landscape where sustainability is increasingly difficult. For many, consolidation may emerge as a viable path forward in 2025, allowing businesses to enhance operational efficiencies and better meet the needs of their clients. I think we will see much more of this in the coming period – it should be exciting for the sector. By coming together, companies can look to share resources and reduce central costs, attract and retain the best talent, and offer a wider array of services. As the industry continues to evolve, those who adapt to these changing conditions through collaboration and strategic partnerships may find themselves better positioned for success and stronger in our dynamic changing markets

Mark Buchanan

CEO
Fitness First Middle East

Fahad Alhagbani

Vice Chairman and CEO
Armah Sports Company

Reflecting on 2024, we’ve witnessed transformative shifts in the fitness industry globally, with the continued evolution of digital health technologies and a stronger focus on holistic wellness becoming standard practice. In Saudi, the drive towards a healthier society aligns with the nation’s ambitious Vision 2030 goals, leading to rapid growth in fitness facilities and wellness-focused initiatives. Looking toward 2025, I believe the industry will see further integration of AI-driven personalized training and mental wellness programs, making fitness more accessible and effective for diverse populations. As we foster more public-private partnerships and harness emerging technologies, the fitness landscape will continue expanding, empowering more individuals to achieve healthier lifestyles than ever before.

Most club owners I’ve talked to around the world say they’re still only back to 85-90% pre-covid membership levels. They’ve increased prices and cut costs to get back to profitability, but this is a trap. Customers notice the cost cuts and go looking for something better. Clubs that are investing exciting new workouts and products are getting great results. We also have a generational change with Gen Z, and with that new tastes and trends to be catered for. As always, under 30’s are by far our biggest new joiner group, and they will tend to come back to their first club over and over throughout their lives. New group workout trends are packing out classes in clubs worldwide. Don’t miss this huge opportunity!
Phillip Mills

Founder & Executive Director
Les Mills International