GymNation is on a roll
At a time when several gyms have had no choice but shut down, UAE-based fitness brand GymNation is not only sustaining operations but also pursuing growth. What’s more, GymNation invested AED1.5 million to launch a new concept called Blitz within its Al Quoz facility.
First, a look at GymNation’s growth path, its first 40,000 sqft facility opened in June 2018 at Al Quoz with over 7,000 members that quickly surpassed the 10,000-mark. Soon two branches opened in Bur Dubai spanning 30,000 sqft and at Manar Mall in Ras Al Khaimah (RAK) spread across 25,000 sqft.
Going forward, GymNation has announced the opening of five more facilities during 2020, including Downtown Dubai, Motor City, Mirdif, Silicon Oasis as well as Abu Dhabi. GymNation has also absorbed members from other fitness concepts that did not survive the pandemic.
Flexible volume game leads to success
It has been a challenging time for all business, including gyms, says Loren Holland, co-founder, GymNation. “What has worked in our favour – pre-and-post-COVID
– is a disruptive, no-frills business model. We launched GymNation to fill a gap in the local market for affordable gyms with membership fees starting from AED99 going up to AED199 with no-hidden costs.
It is quite a unique proposition, as we charge a fraction of what most traditional gyms do. We have created an affordable path to fitness in the UAE, which happens to be the second most expensive market for a gym membership – a Deutsche Bank study indicates.”
A typical practice in the UAE is for gyms to charge for 12 months in advance using the pre-payment model. “We believe in this day and age, it’s an archaic and unsustainable model,” Holland states. “We don’t bound members with long-term contracts; they can even purchase a monthly contract. We are charging a meagre average revenue per member, compensated by the volume. We operate on thin margins, but leverage the economies of scale. That’s why we have seen impressive revenue growth and profitability since we opened in June 2018; COVID-19 only caused a brief pause.”
Success amidst challenging time
Even during the COVID-19 led lockdown period when gyms were closed, GymNation managed to sell over 2,000 new memberships for our existing facilities. “We sold to many people who didn’t have a prior gym membership. The two weeks post reopening has been stronger in terms of new sales, compared to the new
year that is typically a peak period for sale of gym memberships. At the same time, we have seen a surge in members returning to our facilities. We are seeing almost a
1,000 check-in currently,” shares Holland.
Having said that, during the 70-day lockdown period, GymNation incurred losses as memberships were frozen. “As such, we had to undertake cost-cutting measures, but we didn’t let go of our staff,” Holland clarifies. “Our staff did a fantastic job of selling memberships during the lockdown even as they were working remotely. It ensured we recorded some business from new sales.”
As new membership sales increased during the lockdown, GymNation partnered with Les
Milles, the online fitness concept that launched a streaming service called Les Milles on-demand. “We are one of the first gyms globally to partner with Les Milles, opening up their on-demand streaming service for all our members and non-members, who could attend
800 classes for free,” Holland says. “Besides, during the lockdown, we also decided to invest AED1.5 million in a new concept for our Al Quoz facility called Blitz – a boutique high-intensity training (HIIT) studio. We reopened our Al Quoz facility with a brand-new immersive fitness concept.”
Ensuring post reopening safety
Every square inch of GymNation facilities and every equipment went through the sanitisation process before reopening, Holland stresses. “We are having a regular dialogue with the sports council that set the protocol for reopening. For us, a huge advantage is the abundance of space in our facilities. It helped us to space out our treadmills without placing partitions. Across our facilities, we probably had to remove only ten equipment.”
“Our facilities gave enough confidence to our members to immediately return as we reopened,” he adds. “Also, within two weeks of reopening, we sold over 2,500 new memberships across our existing facilities.”
Many bright spots
GymNation has decided to continue investing in the business through the current cycle. “While this year we are on track to open five new facilities, in 2021 we plan to take our concept beyond the UAE to other GCC countries,” Holland reveals.
There has been a decline in population in the UAE, which is not good for any business, he observes.
“But in such a market condition, people will look for affordable propositions to stay healthy and fit that works very well for GymNation. It will help us to gain market share. For instance, fivesix gyms haven’t been able to reopen post-pandemic, and we have offered to support to Cult.Fit and TribeFit by accepting their members free of charge for the remainder of the contract period. And I hope a significant portion of these members will stay with us in the future.”
The fitness penetration level is likely to increase in a post-COVID world, creating an opportunity for the industry. “Overall, the fitness penetration level in the UAE is around 6%. It is around 16% in the UK and 20% in some Scandinavian countries. So, there is enough growth opportunity and a long way to go,” Holland concludes. ■
GymNation has announced the opening of five more facilities during 2020, including Downtown Dubai, Motor City, Mirdif, Silicon Oasis as well as Abu Dhabi.