Rampant! Fitness clubs” are being eliminated due to intensifying price competition… An accident that resulted in a month-long hospital stay due to trainers’ lack of knowledge.
With the health boom, fitness club facilities and personal training gyms are now seen on street corners. These days, they are not only places for exercise, but also attract customers with supplementary services such as karaoke and esthetic treatments, and price competition is intensifying. On the other hand, rising costs to maintain and manage the facilities, a shortage of trainers, and rising labor costs have led some to believe that a shakeout is underway.
It is gratifying that users have more choices with a variety of services. On the other hand, some experts have pointed out that training by imitation may lead to accidents and needs to be done properly. What is happening?
Price Competition Intensifies with the Emergence of “Chocozap
The fitness club industry is now talking about Chocozap as a “convenience store gym. While there have been gyms that are open 24 hours a day and offer unlimited access, ChocoZap offers facilities for as low as 2,980 yen per month (excluding tax) and includes karaoke, coin laundry, and self-service machines for esthetic, hair removal, nail care, and other services. With its ancillary services and low fees, the personal gym Lizap has opened stores nationwide.
The fitness club industry was affected by the voluntary curfew following the COVID-19 crisis, but after the COVID-19 crisis subsided, there has been a move to offer a variety of services, and competition is intensifying.
Tokyo Shoko Research, a research firm, said that fitness club bankruptcies totaled 29 in the last fiscal year, up sharply from 16 in the previous fiscal year and the most on record since statistics began. The survey covered companies falling under the government’s Japan Industrial Classification (sports facility providers) with debts of 10 million yen or more. The survey analyzed the background to the sharp increase in bankruptcies as follows.
The survey found that “the number of bankruptcies is increasing due to a variety of factors. Fitness clubs offering a variety of services, such as being near train stations, inexpensive, and open 24 hours a day, 7 days a week, are mushrooming, and competition is intensifying. At the same time, the industry is rapidly eliminating clubs that continue to perform poorly, due in part to increased costs and a shortage of trainers and other personnel.
Kenji Goto of Tokyo Shoko Research’s Information Division also commented on the fitness club industry, saying, “Competition for users is intensifying in terms of price and service.
He points out that the emergence of operators such as Chocozap, which offer a variety of services at low prices, has made it tougher for existing operators that have taken root in the community to manage their businesses. He said that operators are burdened with the heavy burden of maintaining equipment and investing in new stores, and that they can no longer take drastic steps without extra capacity. Mr. Goto said, “The upfront investment is heavy, and looking at financial results, some of the major operators are having a hard time increasing profits. On the other hand, he says, services are becoming more diversified, and “users have a wide range of choices.
Against the backdrop of health consciousness, the number of users of fitness clubs is increasing. According to the Ministry of Economy, Trade and Industry’s Current Survey of Selected Service Industries, a total of 217.68 million people used fitness clubs last year, a 3.5% increase over the previous year. Overall club sales were 278.4 billion yen, up 3.8%.
