Similarities and Differences between East and West European
Similarities and Differences between East and West European Fitness Industries „Developed vs. Emerging Markets in Europe” Dr Laszlo Zopcsak Phd International Wellness Institute CEO Hungarian Health & Fitness Association President Budapest, 2013 INTERNATIONAL STANDARDS MEETING Promoting Cooperation, Innovation and Professional Standards for the Fitness Sector
The purpose of my presentation to answer these questions: • What are the reasons for lagging behind the developed markets and how to catch up? • What are the similarities and differences? • Do we have specific challenges? • How could we find possible solutions to maintain professionalism and growth? INTERNATIONAL STANDARDS MEETING Promoting Cooperation, Innovation and Professional Standards for the Fitness Sector
It started with the Prague spring… …Brussels autumn - London winter – Madrid… Barcelona … • During EHFA conferences I realized the HOT topics of West European (WE) Fitness Industry (FI) such as: • Music licensing, member retention, set up minimum standards, • Creating REPS, HK Book projects, • Developing education materials, • Liability insurance, etc. . INTERNATIONAL STANDARDS MEETING Promoting Cooperation, Innovation and Professional Standards for the Fitness Sector
How can I bring “West European” experience to Hungary? 1. Jumped into the mission of sectoral cooperation 2. We formed the HHFA 3. Since founding HHFA we had 10 events: –ERESP promotion conference – Regular management meetings – International Scientific Fitness Conference in May INTERNATIONAL STANDARDS MEETING Promoting Cooperation, Innovation and Professional Standards for the Fitness Sector
The reality… Realized that it is not working to copy WE, we have to adapt Convince the market Fitness Clubs (FC) still underrepresented. Why? Few FC membership in HHFA This is a very slow process! INTERNATIONAL STANDARDS MEETING Promoting Cooperation, Innovation and Professional Standards for the Fitness Sector
What are the reasons for lagging behind developed markets and how to catch up? 1. Global Industry Overview 2. The phases of “Fitness evolution” 3. European Industry Overview 4. Similarities 5. Differences 6. Solutions INTERNATIONAL STANDARDS MEETING Promoting Cooperation, Innovation and Professional Standards for the Fitness Sector
Industry Overview Global Market Size & Scope 60, 000 50, 000 Source: IHRSA 2013 Global Report, EHFA Deloitte Report 2013, Laszlo Zopcsak Ph. D 53, 198, 100 42, 563, 250 40, 000 30, 000, 000 24, 127, 193 17, 803, 003 1, 423, 781 6, 596, 692 1, 709, 808 10, 000 MARKET SIZE (in millions €) (total) North America 6, 380, 790 3, 030, 000 1, 379, 525 20, 323 - Europe 12, 974, 000 NUMBER OF MEMBERS (in millions) (total) Asia Australia South America INTERNATIONAL STANDARDS MEETING Africa Promoting Cooperation, Innovation and Professional Standards for the Fitness Sector
References* • Industry experts! • EHFA Deloitte Report 2013 • State of Research in the Global Fitness Industry 2010 • HUB 2010 • WHO 2011 • Eurostat 2013 • Eurobarometer 2010 • Hungarostudy 2009 • WHO Report 2011 • IHRSA European HC Report 2013 • IHRSA Trend Report 2013 • CIA Factbook 2013 • Data Leisure Company 2013 *statistics are liable to change drastically INTERNATIONAL STANDARDS MEETING Promoting Cooperation, Innovation and Professional Standards for the Fitness Sector
Industry Overview Global Market Size & Scope MARKET SIZE % Revenue € 0, 04% 3%3% 13% 47% 34% Europe North America Asia Australia South America Africa Source: IHRSA 2013 Global Report, EHFA , State of Research in the Global Fitness Industry 2010 Deloitte Report 2013, Laszlo Zopcsak Ph. D INTERNATIONAL STANDARDS MEETING Promoting Cooperation, Innovation and Professional Standards for the Fitness Sector
The phases of fitness evolution Same phases everywhere, but CEE is in earlier phase • Developed - mature (leading - Germany, Norway, NL, UK) - DM • Developed - struggling (Spain, Fr, Cy, Sl, It, Port, Ir) - DS • Emerging - promising (Pol, Hu, Turk, Croatia) - EP • Emerging –transitional* (Bulg, Serb, Baltic, Ro) – ET *(RUS, Ukraine, some former Yugoslav states excluded) Scope of services, quality of service, market size, number of clubs, sectoral cooperation, professionalism, socioeconomy - „maturity” INTERNATIONAL STANDARDS MEETING Promoting Cooperation, Innovation and Professional Standards for the Fitness Sector
The European Fitness Sector Emerging promising markets 4% MARKET SIZE % Emerging transitional markets 1% Developed Struggling markets 40% Source: IHRSA 2013 Global Report, EHFA State of Research in the Global Fitness Industry 2010 Deloitte Report 2013, Laszlo Zopcsak Ph. D INTERNATIONAL STANDARDS MEETING Developed Mature markets 55% Promoting Cooperation, Innovation and Professional Standards for the Fitness Sector
Developed Mature market (DM) Germany, Norway, NL, UK –Germany steady growth –UK grown by 1. 5%, within a year –NL fitness sector stable – 4, 5 % increase in No. of members. –Norway: – 2 nd highest GDP/capita • 25 % of Norw. above 15 yrs member of a club Developed - Struggling markets Developed - Mature markets GDP PER CAPITA (in thounsands €) (average) MEMBER PENETRATION RATE in % (market average) MARKET SIZE (in millions €) (total) NUMBER OF MEMBERS (in millions) (total) Source: IHRSA 2013 Global Report, EHFA Deloitte Report 2013, Laszlo Zopcsak Ph. D INTERNATIONAL STANDARDS MEETING Promoting Cooperation, Innovation and Professional Standards for the Fitness Sector 24. 87 35. 18 7. 50 11. 27 9. 37 12. 91 16. 52 22. 89
Developed Struggling market (DS) (Spain, Fr, Cy, Slov, It, Port) 7. 00 –Economic turbulence –Hardest-hit : SP, Gr, Port, – 20% decline in industry 6. 00 5. 00 Spain 4. 00 France 3. 00 Italy 2. 00 Finland indicators 1. 00 –Fin, Cy, Slo, Fr. Grappling 0. 00 –Long-term instability Portugal Greece NUMBER OF MEMBERS (in millions) MARKET SIZE (in billions €) Source: IHRSA 2013 Global Report, EHFA Deloitte Report 2013, Laszlo Zopcsak Ph. D INTERNATIONAL STANDARDS MEETING Promoting Cooperation, Innovation and Professional Standards for the Fitness Sector Ireland
Emerging promising market (EP) Poland, Hungary, Turkey, Croatia • Uncertainty, high rental fees and overhead expenses • Poland leading emerging market • Turkey € 271 m , 1, 550 fitness facilities. • Profitable prospects • The level of professionalism is increasing • Big gap between big cities and smaller towns • No long term commitments • No DDP (EFT) payment Czech Republic Croatia MARKET SIZE (in millions €) Hungary NUMBER OF MEMBERS (in thousands) Turkey Poland 0 500 1000 Source: IHRSA 2013 Global Report, EHFA Deloitte Report 2013, Laszlo Zopcsak Ph. D INTERNATIONAL STANDARDS MEETING Promoting Cooperation, Innovation and Professional Standards for the Fitness Sector
Emerging transitional market (ET) (Bulgaria, Serbia, Baltic states, Romania) They do not invest in knowledge No planning Lack of professionalism Old equipmnts Bank loans not available for financing • No tax deduction or other incentives • Membership is quite expensive, too expensive • Cancellation in summer • • • Source: IHRSA 2013 Global Report, EHFA Deloitte Report 2013, Laszlo Zopcsak Ph. D Estonia Slovakia Latvia MARKET SIZE (in millions €) Romania Lithuania NUMBER OF MEMBERS (in thousands Bulgaria Slovenia Serbia 0 100 INTERNATIONAL STANDARDS MEETING Promoting Cooperation, Innovation and Professional Standards for the Fitness Sector 200
Comparing the EU market Developed - Mature markets Developed - Struggling markets Emerging - promising markets Emerging - transitional markets 22. 89 Source: IHRSA 2013 Global Report, EHFA Deloitte Report 2013, Laszlo Zopcsak Ph. D 16. 52 12. 91 11. 27 9. 37 1. 85 0. 46 NUMBER OF MEMBERS (in millions) (total) 7. 50 2. 26 1. 71 0. 91 0. 19 MARKET SIZE (in millions€€) In billions (total) MEMBER PENETRATION RATE in % (market average) INTERNATIONAL STANDARDS MEETING Promoting Cooperation, Innovation and Professional Standards for the Fitness Sector
Similarities - general problems in EU & worldwide 1. Economy a. EU is most Lucrative b. Downturn or recession? c. Unemployment d. Public debt e. Club closing Eurostat 2013, IHRSA European HC Report 2013, Laszlo Zopcsak Ph. D f. Impact of VAT INTERNATIONAL STANDARDS MEETING Promoting Cooperation, Innovation and Professional Standards for the Fitness Sector
VAT Rate 30% 25% 20% 15% VAT Rate % 10% 5% ry Hu n ga ay w or Hi gh es t- -N lgi um w Lo Eurostat 2013, IHRSA European HC Report 2013, CIA Factbook, Laszlo Zopcsak Ph. D es t Be ET DM EP DS 0% INTERNATIONAL STANDARDS MEETING Promoting Cooperation, Innovation and Professional Standards for the Fitness Sector
Differences between developed & emerging markets Comparison of Member penetration Rate and Purchasing Power Parities 12% 10% 8% 6% 4% 2% 0% 11. 27% 7. 52% 39. 24 24. 12 2. 26% 1. 71% 6. 16 5. 97 Developed Mature markets Developed Struggling markets Emerging promising markets 50 40 30 20 10 0 Emerging transitional markets MEMBER PENETRATION RATE in % (market average) Eurostat 2013, IHRSA European HC Report 2013, CIA Factbook, Laszlo Zopcsak Ph. D INTERNATIONAL STANDARDS MEETING Promoting Cooperation, Innovation and Professional Standards for the Fitness Sector
50. 00 45. 00 Differences between developed & emerging markets 45 € 38 € 40. 00 35. 00 30. 00 AVERAGE MONTHLY MEMBERSHIP FEE (in €) (commercial clubs) 30 000 € 25. 00 20. 00 15 000 € 15. 00 MEMBER PENETRATION RATE in % (market average) 10% 10. 00 2% 5. 00 0. 00 GDP PER CAPITA (in thounsands €) (average) Eurostat 2013, IHRSA European HC Report 2013, CIA Factbook, Laszlo Zopcsak Ph. D Developed Emerging INTERNATIONAL STANDARDS MEETING Promoting Cooperation, Innovation and Professional Standards for the Fitness Sector
Similarities - general problems in EU & worldwide 2. Health Concerns a. Lack of PA (Eurostat) – indifference to exercise b. NCD (HUB) c. Ageing (Eurostat) Eurostat 2013, IHRSA European HC Report 2013, CIA Factbook, Eurobarometer 2010, WHO 2011, Laszlo Zopcsak Ph. D d. Obesity (WHO) e. High obesity vs. low activity (fat less active) motivation INTERNATIONAL STANDARDS MEETING Promoting Cooperation, Innovation and Professional Standards for the Fitness Sector
Similarities - general problems in EU & worldwide Comparison of GDP per capta and Obesity rate 25% 20% 15% 14. 6% 20. 6% 16. 4% 16. 1% 10% 5% 0% Developed Mature markets Developed Struggling markets GDP PER CAPITA (in €) (average) Emerging promising markets Emerging transitional markets 40, 000 € 35, 000 € 30, 000 € 25, 000 € 20, 000 € 15, 000 € 10, 000 € 5, 000 € -? ? € Obesity Rates: OECD* European Countries (average) Source: IHRSA 2013 Global Report, EHFA Deloitte Report 2013, Laszlo Zopcsak Ph. D INTERNATIONAL STANDARDS MEETING Promoting Cooperation, Innovation and Professional Standards for the Fitness Sector
FI specific challenges – EP/ ET Public Health 1. Mortality high middle aged men (WHO 2011) smoking, alcohol consumption, unhealthy diet, inactivity. 2. Active working years less 3. Worst health status in Europe (Hungary) 4. Population decreasing since the 1980 s Eurostat 2013, IHRSA European HC Report 2013, CIA Factbook, Eurobarometer 2010, WHO 2011, Laszlo Zopcsak Ph. D 5. 65 years of age or older increasing steadily 6. Lowest life expectancy at birth, EU 27 by 5. 1 yrs INTERNATIONAL STANDARDS MEETING Promoting Cooperation, Innovation and Professional Standards for the Fitness Sector
FI specific challenges – Emerging - EP/ ET Public Health INTERNATIONAL STANDARDS MEETING Promoting Cooperation, Innovation and Professional Standards for the Fitness Sector
FI specific challenges – Emerging - EP/ ET Public Health INTERNATIONAL STANDARDS MEETING Promoting Cooperation, Innovation and Professional Standards for the Fitness Sector
FI specific challenges – EP/ ET Business 1. Lack of fitness management knowledge 2. High rental fees in foreign currency 3. Different mentality (Hungarostudy) 4. Attitude problems (Euro barometer) 5. Foreign (English) Language barriers Eurostat 2013, IHRSA European HC Report 2013, CIA Factbook, Eurobarometer 2010, WHO 2011, Laszlo Zopcsak Ph. D 6. Fitness young sector in EM – 20 yrs behind DM 7. Normal cycle will speed up by western investments Infrastructure is OK – but knowledge, attitudes are limited INTERNATIONAL STANDARDS MEETING Promoting Cooperation, Innovation and Professional Standards for the Fitness Sector
Attitude – How often do you exercise? Hu ng ar y ands l r e h t Ne Eurobarometer 2010, Laszlo Zopcsak Ph. D INTERNATIONAL STANDARDS MEETING Promoting Cooperation, Innovation and Professional Standards for the Fitness Sector
FI specific challenges – Emerging - EP/ ET Political 1. Intersectoral activities are poorly coordinated 2. Prevention and health promotion underfunded 3. H&F organizations underdeveloped, activities substantially curtailed 4. No government incentives - extra tax for fitn. membsh. as benefit 5. HOC – Olympic sports - leisure sports – fitness 6. Eastern countries - Olympic sports vs. HEPA INTERNATIONAL STANDARDS MEETING Promoting Cooperation, Innovation and Professional Standards for the Fitness Sector
Why fitness clubs are underrepresented even here? 1. Vast majority of investors, owners are from different business 2. Ignore the necessity of fitness management - trainers are appointed in this position 3. Relevant stakeholders are struggling with other daily problems like marketing, financing etc. 4. A lot of work has to be done for us in this regard 5. Lack of foreign language knowledge Most of all - Business knowledge needed! INTERNATIONAL STANDARDS MEETING Promoting Cooperation, Innovation and Professional Standards for the Fitness Sector
What is the magic formula to create a solid fitness market in the CEE region? (For emerging markets) 1. Gather the industry stakeholders for a meeting 2. Form a sectoral association 3. Hire a part time staff to do the daily task pre-invest 4. Organize business events for managers, owners 5. Set up local register 6. Contact government authorities, get them involved 7. Repeat your effort (reps&sets) with patience, persistence, consistence until growth is achieved – EHFA’s motivation crutial! INTERNATIONAL STANDARDS MEETING Promoting Cooperation, Innovation and Professional Standards for the Fitness Sector
INTERNATIONAL STANDARDS MEETING Promoting Cooperation, Innovation and Professional Standards for the Fitness Sector
The role of EHFA and the ISM in the future of the EU Fitness Industry • Adapt accreditation, quality management, evidencebased proceedings to this market - IWI • Launch an EHFA East and Central Europe Task Force • Regular regional conferences CE FORUM • Statistics on this region also – EHFA - Deloitte • Programs to raise public awareness - HEPA • Affiliation of EHFA accredited TP’s – IWI-GRAFTS INTERNATIONAL STANDARDS MEETING Promoting Cooperation, Innovation and Professional Standards for the Fitness Sector
Thank You! Köszönöm! (Egészségedre! Cheers, salute) INTERNATIONAL STANDARDS MEETING Promoting Cooperation, Innovation and Professional Standards for the Fitness Sector
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