Operators from across the sector have been discussing how rising energy prices could impact their businesses.
We recently held a group Zoom discussion - Is Cost Reduction Enough? - to find out the concerns of LFX members and talk about the support they would like to see in place to help them through a potentially difficult time.
One operator said they were “nervous of rising costs” and - although they aren’t experiencing this yet - were concerned whether customers will at some point be forced to cut back on spending in areas like gym membership. For some who are currently on fixed energy tariffs, they are worried about what will happen once their fixed agreement ends.
One LFX member said: “It’s not really hit us yet but we are concerned about income and rising costs.”
This is also leaving them with the issue of how to absorb a potential price rise without having to pass it on to their customers, who may already be struggling themselves. Ideas for revenue generation discussed included focusing on retention strategies, building on a current interest in junior memberships and a growing demand for swimming lessons, as well as being more creative with existing spaces within facilities and how to best make use of them.
Many LFX members we spoke with are also looking at the changes they can make in their facilities to save energy and are planning a move towards more renewable energy options.
The feeling is that as well as the environmental benefits of ‘going green’ , adapting to a more sustainable model may also help them to save money on energy bills in the longer term.
Measures being discussed or implemented across LFX members’ facilities include:
Installing air source heat pumps
Switching to LED lighting
The use of solar panels
It was reassuring, however, to hear that while rising costs are a concern, overall most participants in the discussion were feeling buoyant about how their facilities are performing.
It was said that for some, health and fitness membership numbers and class sizes had returned to - or even exceeded - pre-Covid numbers, and there is a huge demand for swimming lessons.
There was a clear feeling among members of the benefits which their centres bring to local communities and how important it is that they are supported and given time to adapt to what could be a challenging period ahead.
And while the general feedback is that their local authorities do recognise the role they play, they feel it’s more important than ever that, as a sector, we really drive home the message of how vital leisure facilities are.
This means not just in terms of the opportunities they bring to help people become fitter and healthier, but also the enjoyment and social benefits they get from attending the gym or fitness classes.
One LFX member added:
“We would love our local politicians to speak to our regular users and find out what it means to them - it’s a lifeline.”
Independent Operators
Following this discussion, we reached out to respected independent operators to see if they have also been feeling the squeeze. Mike Hind MBE, who owns Mas Body Gym in Middlesbrough said he has “massively noticed” price increases in his business, with everything from electricity prices to buying ingredients and fuel to run his meal prep service to the cost of filling his vending machine rising.
He added: “It’s not just electricity prices, but everything you need to implement in a gym environment.
“Everything is going up - the effect on gyms is massive.”
Mike is reluctant to pass additional costs on to his customers, as he is conscious they might not be able to afford to pay more to attend the gym or buy their healthy meal prep, and is worried how that might impact their physical and mental health.
The only change he has made is increasing the price of a bottle of water by 20p. Instead, he has absorbed the rising costs out of his own pocket, invested in LED lighting and removed a sunbed, which wasn’t cost effective, to try and make savings.
As an independent gym owner, he’s used to working long hours but is now often putting in 12 and 13 hour working days to cover wages and bills.
His award-winning facility has provided a lifeline for members and the local community, but spiralling costs have even left him questioning how long he can continue running the gym side of the business without any support. He added: “Right now, as an industry we need to dig in and support each other.
“It’s hard. We want to help people to get a better quality of life, but do I do that at the expense of my quality of life?”
Sam Smith, managing director of award-winning Rigs Fitness in Birmingham, is also worried.
He said: “We’ve started to notice an increase, even with limiting the amount that we're using gas and electric. I think this is a reflection on the amount that standing charges have gone up.
“Even though we have felt it, we're worried about it continuing to rise in the future. We're probably looking at a 150-250 per cent increase in our utilities’ bills.” Sam has also been looking at where energy savings could be made, but is keen to make sure this doesn’t impact on the member experience. And he fears things might become even worse in the winter. He added: “We're particularly worried about heating the facility in the colder months. We use one large gas heater for this, which will become incredibly expensive given the rise in gas prices.”
Both Mike and Sam agreed they would like to see more support for operators who are struggling.
Sam suggested a reduction in monthly rates from the council, which could then be recouped from energy companies by way of an additional windfall style tax, while Mike is speaking to local MPs and looking at how operators can work together and support each other through a tough period.
So what do you think?
Have you already started to see costs rising or is it something you’re worried about or preparing for over the next few months?
We would love to hear your thoughts.
Comments