A sustainable vision
Our latest edition of RIDE HIGH includes a must-read supplement – A Global Crisis? – in which we speak to operators across Europe, Asia-Pacific, Africa and the Americas to understand the region-by-region challenges facing the fitness sector at the moment, and the strategies that might be deployed to navigate them.
Check out all our expert comments here or download a PDF of the full magazine, including the supplement, above.
Here, we share the perspective of Steven Ward, strategy & innovation director for GO fit in Spain and Portugal. Interview conducted 28 October 2022.
People are saying we live in uncertain times. I disagree. It’s certain that the volatility and complexity we’re experiencing will continue for the short to medium term.
At GO fit, we’re seeing continued demand for our product, with net growth every month for the past 20 months other than in the Omicron wave of December 2021. Key to this is our continued focus on delivering an overwhelming value proposition; we will always offer value that far exceeds our actual membership fees. Our focus on measurably impacting people’s lives is valued by customers to the point that we aren’t a luxury they can dispose of, nor a commodity they can replace with a cheaper option.
Yet for our sector as a whole, we’re now operating in a very different climate even from 12 months ago, and there is no easy solution to any of it.
If you look back through history, inflationary environments such as the one we’re in now typically end in recession, either of a technical nature or one that truly bites. We’ll see interest rates continue to rise until there’s a decline in economic activity, and this will hit many businesses in our sector hard – especially those that have scaled on what was once cheap debt, or grown through leveraged positions of their owners. We have yet to see what the impact of this will be, but it will undoubtedly also hit public sector construction and private sector borrowing.
I do see strong recovery for our sector in the long term, but things will remain tough in the short to medium term as central banks work to bring the situation under control.
Much of the conversation right now is around energy, which has always been a top agenda item for the GO fit executive team: our brand values and commitment to sustainability mean that as an organisation, we want to be 100 per cent powered by green resources. We already have solar installations and other energy-generation investments in our facilities, but these will never provide all the energy we need year-round. So in 2019, GO fit entered into a 10-year fixed rate agreement with a leading green energy provider in Europe that covered the vast majority of our energy requirements.
It was a bold decision to make, because we were committing to above-market rates at the time. However, the company felt it was the right thing to do for the planet and the board backed the decision.
And now, although we never went into it for cost reasons, we’re facing this crisis in a very strong position; I strongly suspect that, had my colleagues not had this foresight and sustainability agenda, our energy costs could have doubled by now.
We are feeling some impact of the current crisis, as a small proportion of our energy requirements aren’t covered by our fixed arrangement. However, it’s a fraction of what it could have been. We also have a comprehensive energy strategy for this remaining element, looking at a whole range of initiatives to build resilience ahead of certain future energy shocks over the next couple of years.
“Our specialist team is in the market every day, looking at futures and fluctuations to ensure we procure energy at the best possible time”
We have a relentless focus on identifying the best moments to procure energy: our specialist team is in the market every day, looking at futures and fluctuations and making sure we’re negotiating at the best possible time. As we speak today, for example, the recent warm weather means ships are sitting outside ports unable to deliver their gas, because reserves are full. It’s pushed gas prices temporarily down, making now a great time to buy. That won’t still be the case next week. Sorry if you’re reading this some time after!
We have an equally relentless focus on efficiency of energy usage across our business, with highly intelligent facilities run by highly experienced facility professionals. We have visibility and control over our whole estate in real time, so we can adjust energy usage in real time based on customer need and demand, footfall, the climate outdoors, the temperature in the club and so on. This has a significant impact on our overall consumption.
“Government subsidy interventions are removing the imperative to think responsibly about energy consumption”
This is what modern, world-class facility management looks like, but not everyone is doing it yet. It’s a cold thing to say, but government subsidy interventions in the face of this crisis – the figure currently stands at €500bn globally – are weakening the price signal to businesses and removing the imperative to think responsibly about energy consumption. Poorly managed organisations are being bailed out at the cost of well-managed organisations, rather than being forced to operate as sustainably as possible. It might be essential in the short term, but economically, this moral hazard is wrong. Every organisation must take responsibility for its sustainable use and future procurement of energy, and this crisis has brought that home.
Looking further ahead, all indications are that we will see a natural energy revolution across Europe in the medium term, with significant policy reforms that decouple the cost of electricity – and with it, the cost of green energy – from the cost of gas. We will also see major infrastructure investments in renewables. This will be instrumental in the move towards a self-sufficient, sustainable future that gives us more energy security and that’s simultaneously positive for businesses and the planet.
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