Network Magazine spring 2015 | Page 20

ONE PASS EVERY CLASS THE RISE OF FLEXIBLE FITNESS ACCESS The marketplace is suddenly crowded with online ‘fitness passport’ providers. Does this development spell trouble or opportunity for traditional fitness facility memberships? ecent years have seen the power of the internet harnessed to make better use of existing space and services. Airbnb connects those looking for short-term accommodation with those who have space available; Uber connects those looking for an alternative to taxis with private drivers in their area. It was only a matter of time before similar technology was used to match up those looking for commitment-free group fitness with those offering spare spots in classes. That time has well and truly come. In recent times Australia has seen a number of players enter the market, some based locally and others originating overseas. AnyClass, ClassPass, Classhopper, Classium, FillMyClass, FitSessions, FitUsIn and KFit are some of the names that operators of clubs and studios will soon be familiar with, if they aren’t already. Essentially, most of these function as ‘passport memberships’, giving those who join unlimited access to a wide range of classes at all the facilities in their passport provider’s network. So, does this spell trouble for traditional club membership sales, or present opportunites for new business? Network spoke to several providers to get the lowdown on this ‘disruptive’ industry development. R What was the catalyst for the creation of these services? Most providers voiced similar reasons for 20 | NETWORK SPRING 2015 creating their services, namely frustrations on the part of gyms with consistently having half-empty classes, and frustrations on the part of individuals whose gyms didn’t provide them with all the classes they wanted at times that suited them. The founder of FitSessions, Natasha Prasad, says ‘I realised I was paying a monthly rate for a gym membership in the CBD, buying class packs from a specialised yoga studio and paying drop-in rates for tennis and swimming. This was expensive, clunky and simply not sustainable.’ AnyClass co-founder Elena Torriani points to the new efficiencies enabled by technology, saying: ‘There are so many markets that have historically been inefficient, because it was very hard for a small business to get the scale to operate outside its local area. The internet and smartphones have changed that forever. We’re trying to bring some of these new efficiencies to the fitness market, so consumers have more options and studios get more business.’ How does the business model work? Most providers charge a weekly or monthly fee for memberships – generally around $100 a month – that gives members unlimited access with no extra costs for classes. As Robbie Dunphy, co-founder of Classhopper, notes, the more often members go to classes, the more value they get – just like with a regular gym membership. Most providers, such as AnyClass, enable this by effectively ‘bulk buying’ classes from facilities at discounted rates, or, as in the case of FitUsIn, by providing partner studios with an agreed upon referral rate for each visit. FillMyClass and Classium function a little differently. Members don’t pay a membership fee and just pay for the classes they book online. FillMyClass encourages venues in its network to offer users the first class for free, but notes that partners choose costs and can charge members whatever they like. What is the main benefit to fitness facilities? There are two main benefits for clubs: the immediate revenue generated from ‘selling’ otherwise empty spaces in class, and high quality lead generation. AnyClass, for example, claims it can bring in around an extra $1,000 per month for small studios, and multiple times that for larger facilities. Most providers, however, cite lead generation as the major benefit enabled by their service, and say that this is the aspect that facilities value most. Robbie Dunphy from Classhopper acknowledges that by working as a connector the service will inevitably lose some of its members when they decide to take out memberships at a club that they have tried: ‘Naturally this will result in us losing members and the studios gaining them, but that’s just a by-product of the awesome service.’