What is the Potential of Saudi Arabia
Fitness Services Market?
The
Saudi Arabia
Fitness Services Market has shown
tremendous growth in value and number of fitness service centres. The increase
in demand for weight management services, mushrooming female exclusive fitness
clubs which operate under Saudi Arabia’s strict compliances have also gained
popularity over the past few years. Moreover, competitive pricing of membership
rates, rising awareness of appearances among individuals, growth in the
presence of certified personal trainers, and the ability of fitness centers to
use capital to scale up and diversify have facilitated the market as a whole.
Rising
population of youth in the country has been complimenting the size of this
industry. Coupled with increasing lifestyle diseases
Such
as heart problems, asthma, and diabetes in the overall population, there has
been a significant shift of people preference towards fitness centres in the
country. Additionally, the ease in on the regulations on women has also
increased the women specific fitness centres in KSA. Women can attend fitness
centres where they are trained by women trainers; also, support from government
for the betterment of the KSA population has enabled many companies to expand
in KSA.
While
consumers’ desires for fitness services persist to grow in Saudi Arabia,
surging income levels and increasing awareness have also assisted the growth of
fitness service industry in the country to a great extent.
What are the major revenue Streams in
Saudi Arabia Fitness Services Market?
The
revenue stream of Saudi Arabia Fitness Services market has been majorly divided
into gyms membership, and personal training which account for ~% and ~%
respectively.
Demand
of qualified professional trainers has been a major reason behind the revenue
generated by personal training segment. Customers tend to opt for gym that have
qualified personal trainers and can guide and train during the gym sessions.
The total number of personal trainers in organized fitness centers of Saudi
Arabia has been around ~ in the year 2017. Also, as an average every
unorganized fitness centre in Saudi Arabia has 3 personal trainers.
On
the contrary, gym membership accounts for ~% of share in the total Saudi Arabia
Fitness Services market. Numerous new gyms have been sprouting in various
regions of Saudi Arabia. The growth of population, increasing lifestyle
diseases, increasing obesity rate, along with government driven health and
fitness norms, with the initiative of the government of opening more parks,
cycling lanes, and running lanes for the public to support and promote active
lifestyle have brought about a positive change in the mentality of people
towards fitness. Additionally the support from government by lifting the laws
on women, now female population are free to join fitness centres has increased
participation of people in gym. The fitness centres have also attracted
customers with additional services such as spa, salon, swimming, etc. that does
not need personal trainer services, hence resulting into increase revenue share
of membership as compared to personal training services.
What is the Current Position of Organized
Sector of the Industry??
The
market is majorly divided into organized and unorganized sector, where
unorganized sector accounts for ~% of total market revenue in 2017 dominated by
fitness services providers which have one fitness center in Saudi Arabia
operating under one brand name. On the contrary unorganized market shares ~% in
the total Saudi Arabia Fitness Services market revenue in 2017, containing
fitness service providers which have more than one fitness center in Saudi
Arabia operating under one brand name.
The
major factor for the growth of Saudi Arabia Organized Fitness Service Market is
the demand of personal trainers, as personal training has always been a USP of
organized fitness centers and this has resulted into an important factor for
the growing number of such centers in the country. Additionally, organized
players provide different types of integrated services under the same roof
(such as Resistance training, Aerobics, Zumba, and others) that has also
contributed to the growth of organized centers in the country.
Conversely,
while choosing the fitness centers, majority of the customers in Saudi Arabia
consider price as the most important parameter. Since unorganized fitness
centers are less expensive, most of the population opts for these services over
organized ones. The ratio of unorganized fitness centers to organized fitness
centers is skewed, attributed to the initial investment and operating expenses,
as unorganized fitness centers demand much lesser fee as compared to organized
fitness chains.
What are the major parameters which
dominate customer decision while opting for a gym?
Location: Customers prefer fitness centers which are
nearer to their accommodation facility as it becomes convenient for them to
access it any time. Additionally, the female population in Saudi Arabia prefers
to join the fitness center which is near to their homes in order to ease their
daily commute.
Availability of Experience and Skilled
Trainers: Majority of the fitness center going
population in Saudi Arabia demand for fitness trainer as they prefer to work
out under the guidance of professional for more efficient exercise and better
results.
Membership fee: People prefer those fitness centers that
provide multiple services at a lower price. Additionally, people try to opt for
different payment options and discounts on annual subscription, which helps in
saving, and proves to be more economical
Services Offered: Rather than travelling from one fitness
center to another for different services, customer opt for those fitness
centers that have multiple services under one roof
Equipment and Infrastructure: The type and quality of fitness equipment
offered by a fitness service centers is another factor while opting for a
fitness center.
Brand Image and Reviews: Population of Saudi Arabia usually gets less
influence by the reviews of the people those who are already going to the
fitness clubs. They believe to form their own opinion rather than reading the
reviews given by other gym members.
Which
are the Major regions contributing Highest Revenue Share in Saudi Arabia
Fitness Services Market?
Riyadh: Riyadh has highest population and largest
area in Saudi Arabia, consisting of more than 40% of the youth population.
Majority of the youth population in Riyadh is facing obesity problems due to
unhealthy eating habits. Riyadh being a metro city in Saudi Arabia has led the
population to have hectic lifestyles which has increased their dependency on
fitness centers
Makkah: Mecca is among one of the largest
contributors in terms of organized fitness services centers in Saudi Arabia.
Increase in awareness of health and fitness especially among the female in the
cities along with influence from TV has increased the demand of fitness centers
in the country
Dammam: Dammam contributes to about ~% of the total
fitness services centers in Saudi Arabia. The region being the administrative
center for the Saudi Arabia oil industry, it is the fourth largest populated
city in GCC. The high population along with high disposable income has helped
the increasing the fitness services market demand
Madinah: Many fitness chains in the country have
expanded their presence in Medinah by opening new branches. It has resulted
into increased fitness services demand in past few years. Also, joining the
fitness center has become the trend among the youngster because of changing
population lifestyle
Others: Other regions that contribute to the demand
of Saudi Arabia Fitness Services Market are Tabuk, Skaka, Hail, Al Khobar, and
many more.
How Government has helped in the
growth of fitness services market growth in KSA?
In
February, 2017, the government of Saudi Arabia started granting licenses for
women’s gyms, which includes labor, rural affairs, and commerce ministries. The
ministries involved in providing the licenses are labor, rural affairs, and
commerce ministries. Also, studies conducted for the Saudi Arabia Olympic
Committee (SAOC) under the direction of the General Sports Authority (GSA) have
proposed a major transformation in the provision of physical activity in the
Saudi Arabia.
Women-only
gyms are exclusive to female population, and no men trainer is allowed to train
the subscribers. Apart from fitness clubs such as NuYu and Curves which are
exclusive to female subscribers, fitness clubs such as Gold’s Gym provides
fitness services to both men and women, however the time slots are different to
maintain privacy for female members.
Additionally,
as part of the broader Vision 2030, one of the major new mass participation
initiatives which is included in the Government’s National Transformation
Program (NTP) agenda is to increase female participation through a series of
initiatives that includes new licensing process for fitness centers and special
university-based programs.
The
council regulates the licenses, and the companies are restricted to receive
licenses that offer competitive activities, such as football, volleyball,
basketball, boxing, and tennis, and the focus of centers should be on techniques
that contribute to weight loss and fitness, such as swimming, running, and
bodybuilding.
What are Licenses Required, Costs
Structures and Penalties pertaining in the Market?
In
order to carry out and expand business, the company needs to maintain or obtain
a variety of licenses, certificates, permits and approvals from regulatory,
legal, administrative, tax, Zakat, and other authorities and agencies, both in
the Kingdom and in the UAE, in particular a municipality license for the
conduct of commercial activities, a sports activity license and a civil defense
license for each of its fitness centers in the Kingdom.
The
processes for obtaining these licenses, certificates, permits and approvals are
often lengthy and most of the licenses, certificates, permits and approvals are
subject to conditions under which the licenses, certificates, permits and
approvals can be suspended or terminated if the licensee fails to comply with
certain requirements.
When
renewing or modifying a license, certificate or permit, the relevant authority
may not renew or modify the license, certificate or permit and may impose
conditions that will adversely affect the company’s performance, if it did
renew or modify the license, certificate or permit.
If
the Company is unable to maintain or obtain the relevant licenses, permits and
approvals, its ability to achieve its strategic objectives would be impaired,
it may be forced to close down the fitness centers for which operating licenses
are missing and/or pay financial penalties, which would have a material adverse
effect on the business
Where is the Future of the Market
Positioned to be by the End of 2022?
The
market is expected to grow up to USD ~ million by the end of 2022E. Household
Disposable Income: It has been projected that increase in household income
along with increasing awareness towards fitness services will attract major
number of people to join fitness centers during the period 2018-2022E.
Household income has been expected to increase at a CAGR of ~% during the period
2017–2022E. Fitness service chain including Fitness First, Gold’s Gym, and
NuYu, plan to set up more fitness outlets in various regions of Saudi Arabia by
end of the year 2022E. This will positively lead to increase in number of
membership in fitness centers and accordingly it would be a major reason for
increase in the number of organized fitness centers. There is a steady increase
in demand of certified personal trainers among customers of fitness centers in
both organized and unorganized fitness center market. Personal training in a
fitness center is a major revenue stream and increase in demand of this service
will further increase the revenue of the centers. Market is expected to
continue to grow, where it would have more number of both organized and
unorganized fitness centers catering to the needs of the increased customer
demand. Obese population has been expected to increase in future, as people in
Saudi Arabia prefer junk food which can be a major cause for increase in demand
for fitness centers. With the increase in obesity and diseases people are
getting more focused towards their physical health and fitness.
Would the Share of Organized Sector
Increase by the End of 2022?
Unorganized
sector is expected to dominate the fitness service market with a share of ~% in
the total number of fitness service centers in Saudi Arabia in 2022E.
Membership Fees: Lower membership fees is expected to be the major reason
behind the dominant share of unorganized sector in the revenues of overall
fitness service market in Saudi Arabia by 2022E.
Expansion: Opening up of new unorganized centers with
enhanced facilities in new areas can be another factor which is projected to
drive up the revenues from unorganized market.
Services
Diversification: Unorganized gyms are expected to diversify their services
portfolio to attract customers and compete with the organized gyms. They are
expected to start providing value added services including Zumba, Aerobics,
Spa, Sauna and others which would increase their revenue.
Organized Market: The number of fitness services centers in
organized market is expected to increase to ~ in 2022E from ~ in 2017 with a
CAGR of ~%. Organized sector would expand owing to increase in the number of
branches of already established gyms, more number of people joining these
centers as health consciousness in Saudi Arabia is rising and entry of new
foreign players and expansion of other unorganized service providers.
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