Smaller proves better for Hong Kong gyms as bigger chains struggle under the weight of high rents
Growing awareness of fitness coupled with low gym membership should make city a gold mine for gym operators but the big players are struggling to cash in
In a city where a growing awareness of fitness reflects global trends but gym membership has yet to hit the rates of other health-conscious nations, most would assume that operating a gym in Hong Kong would be a licence to print money.
Only four out of 100 people in the city are gym members, compared with 14 out of 100 in Australia and 11 out of 100 in New Zealand. Those numbers, along with an estimated market size of US$373 million, would suggest there was still plenty of opportunity to capitalise on.
Which is why the collapse of fitness giant California Fitness in July took so many by surprise.
The sudden closure of the chain’s 12 outlets revealed the sales tactics being adopted by big chain gym operators to attract and retain members as they responded to the pressure of sky-high rents in prime areas and increasing competition from smaller rivals with nimble business models.
In the case of California Fitness, the cracks began to show in April when it was named by the Consumer Council for deploying intimidation and misleading sales practices to press consumers into purchasing memberships and high-priced private lessons.
As complaints flooded in from disgruntled members, branches began to close and details emerged of the crippling debts beleaguering the company.
