Adapting to change
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 Timothy Felix, CEO of Active Fitness in Singapore. Interview conducted 31 October 2022.
There’s an adjustment period going on in Singapore at the moment. Now we’re out of the pandemic bubble and allowed to do what we want again, people’s disposable income – for a while heavily focused on health and wellness – is being spread more broadly as they seek to experience life again, and especially travel. Disposable income remains strong, in spite of inflation going through the roof, but our sector isn’t enjoying as much of it as it has over the last couple of years.
Customers are also reluctant to sign up for long-term packages now, preferring to pay a premium for smaller packages that make it easier to travel and flex around having to return to the office.
“Indoor cycling supply has grown to the point that it’s outstripping demand. That’s driving down prices just as inflation is soaring and operating costs rising”
Meanwhile, particularly in indoor cycling, supply has grown to the point that it’s outstripping demand. Our lockdowns weren’t as extended as in other markets – Singapore is small and the population obedient – and people were invested in their health, so many new brands emerged during that time. I would estimate that the number of clubs offering indoor cycling doubled during 2021.
That’s now driving down prices and forcing some closures. People here can afford to pay more, but over-supply is pushing things the other way just as inflation is soaring and operating costs rising.
All of this is an interesting challenge and one we’re developing strategies to address – focusing on local, residential areas where we can build community engagement, for example.
Then in terms of business costs, electricity prices are up: they had doubled but are currently back down to about 1.5 times what they were. Our rented mall locations prevent us from installing anything like solar power, but we are educating our staff to keep energy usage as low as possible.
We already have LED lighting and non-powered equipment, and as a boutique operation we can turn things off when there are no classes. But we have to deliver a certain level of experience, and air conditioning is a big part of that. We’ve turned the temperature up a couple of degrees in our reception areas, but we can’t allow our workout spaces to become stuffy. Rising electricity prices are simply a bullet we have to bite.
The greater challenge comes in the shape of manpower costs and rent, which are very high in Singapore. We’re identifying unnecessary personnel costs and restructuring accordingly, so we can offer better deals to those who are vital to our operation.
But I’m pragmatic about it all. I’ve run my own company for nine years and I know you can’t always fly high. A lot of people in fitness have only ever known it to be on an upswing, as it was for perhaps five years before COVID, but things can go downhill too, however strong your business and brand. Rather than looking for things to blame it on, you have to be ready to identify the issues and implement change.
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