What was the idea behind GymNation?
LH: We had grand ambitions, but the main point was to launch an affordable gym offering. As consumers ourselves, looking for a gym to join, we felt priced out of the market. When you’re having to pay £100–150 a month just to use a very basic gym – and have to pay for the whole year upfront, as you do in Dubai – you really do struggle to justify it.
I knew lots of people who, back home in the UK, had been healthy, active and fit, but in Dubai all that stopped because of the barrier to entry: the price point.
Around the time we launched our first club in 2018, there was a study done by Deutsche Bank into the affordability of living in key cities around the world. One of the metrics was the cost of gym membership, and Dubai emerged as the second most expensive market in the world to have a gym membership, a close second to Tokyo. That reaffirmed everything we knew.
So, we wanted to launch an affordable gym business. But we also wanted to create a fantastic experience. GymNation isn’t just a basic product for an affordable price tag. Ours are high quality gyms with a really cool vibe.
What do you charge?
FA: Our publicised pre-sale deal is AED99 a month, and if you join up on that rate, you keep it for a lifetime – or at least, until you leave or add optional extras. If you do leave and then re-join, and you manage to secure that rate again via pre-sale at another of our clubs, then again you can keep that rate for as long as you want.
We tend to have a set number of memberships available at that AED99 price point, but even after that it only goes up slightly: price points are generally sitting at around AED139–149 a month across our sites at the moment. And that’s still affordable, considering that the average price of gyms here is around AED350–400 a month, and you have to pre-pay for a 12-month period as well. It prices a lot of people out of fitness, because some salaries are only AED4,500–5,000 a month.
AM: We have two options: a minimum 12-month commitment or a slightly more expensive ‘cancel any time you like’, no-contract option. Most members take the contracted option, because we do let people out of it if they’re relocating, if they’re injured or ill and have a doctor’s note, or if they have any big change in circumstances such as redundancy.
So, you really are the first budget gym operator in Dubai?
LH: We are, to the point that when we announced AED99 a month memberships, people accused us of being scam artists! They just didn’t believe it could be done or could be true.
FA: During the first pre-sale, people would come down to our office to see us and we’d try to sell this amazing AED99 gym off a piece of paper. We were trying to paint a picture to them, and some people really just joined thinking ‘worst case scenario I lose AED99’.
Until we opened, we were trying to explain something they were struggling to imagine.
LH: But when we opened, it was actually even better than the renders and pictures. People normally expect the final product not to be as good as the graphics you produce, but we over-delivered and the members were just blown away.
What do members get for their AED99 a month?
LH: Our clubs, and the studios within them, are the biggest in Dubai and are open 24/7. Our gym floors typically have around 500 pieces of Matrix kit, alongside which we have three or four studios in each club, including one that’s dedicated to virtual, with classes rolling back-to-back around the clock. Each club also has a women-only gym.
AM: We have a huge class timetable – 200 classes a week in every club – with at least 40 per cent of members engaging in group exercise.
We offer a full range of Les Mills classes and also have our own freestyle classes. The most popular class we offer is our rebounder workout – Jump Nation. That’s been a huge success: we’ve had reports of people staying up ‘til midnight to book the trampolines, because they sell out in the first hour of the timetable becoming available to book.
FA: Bear in mind, these studios can hold 70–80 people, but the classes are still jam-packed every time.
LH: We’ve also just launched our own in-house boutique HIIT concept called Blitz – a bootcamp workout – which we built into all our existing gyms during lockdown and which will be in all clubs moving forward. Members need a Blitz membership to access these.
Any other optional add-ons?
LH: We have about 20 PTs in every club through our partnership with Enhance Fitness and personal training is very popular with members. There’s also a Muay Thai club which is run by Jason Woodham, a former fighter and probably one of the world’s best Muay Thai instructors.
FA: We’ve also partnered with an external company, Kcal, for the nutritional side of our offering – vital in a country where you can get literally any food delivered to you at any time of the day or night!
We have Fuel Up areas in our clubs which provide nutritional advice, and members can get their body fat percentage checked on demand to establish their BMI – that sort of thing. They can then get meal plans delivered to the gym or to their house, including healthy dishes that are ready to heat up and eat.
How do you deliver all this for such a low fee?
LH: We’re far lower in price than other operators – a third to a quarter of average gym membership fees – but we compensate with huge volumes.
Our clubs are typically over 30,000sq ft: our flagship – the first club we opened, on Sheikh Zayed Road – is 40,000sq ft, and as we speak to you now we’re sat in our 50,000sq ft Mirdif gym, which is under fit-out at the moment.
We can therefore get to 10,000+ members in each of our clubs. And we get there quickly. We opened Sheikh Zayed Road with 5,000 members on day one, and matured that to 10,000 members within the first year.
Then we cut costs where we can. You’ll be familiar with the no-frills model, but for example there’s no towel service. We don’t have swimming pools, saunas or steamrooms either, which are some of the highest CapEx and OpEx areas of the gym.
What’s the secret of your impressive pre-sale figures?
FA: It’s credit to Ant and his innovative ways. Back in Australia, it was all about grinding the street and handing out flyers, but Ant’s got us to a point where our lead generation leans heavily on social media.
AM: Typically, before the gym even opens, we have a period of maybe two months’ data collection and lead generation before we allow anyone to join. We build the excitement up to a specific date when the portal will open to take payments. It’s much like the ticketing models for concerts.
In our Abu Dhabi site, which we launched for pre-sale just before COVID, we did 2,200 transactions in 24 hours.
What’s your target market?
AM: Age-wise, the core target group is 18–34 – about 65 per cent of members are in that category – with roughly a 65-35 male-female split.
But beyond age and gender, the profile varies significantly across our clubs. Dubai is a melting pot of cultures and demographics and we cater for a wide range of nationalities.
If you go to our Al Quoz gym in the morning, you’ll predominantly find European and Western ex pats. Towards the evening, the profile is more sub-continent, then later at night it’s very Arab-focused. Meanwhile, at our second location in Bur Dubai, 95 per cent of members are from the sub-continent or the Philippines, and at our new gym in Motor City, the profile will be very ex pat led.
Each gym has its own target market, depending on the demographic of the population around it, and we cater the marketing accordingly – a heavy dose of Bollywood for Bur Dubai, for example.
LH: We call ourselves The People’s Gym and we aim to make our clubs welcoming. A lot of gyms in Dubai focus on bodybuilding and are pretty intimidating for anyone who doesn’t look like a fitness model. In our gyms, if you walk in a bit out of shape and just want to train a couple of times a week, you’ll feel you belong.
We don’t take ourselves too seriously. We have fun with our marketing. Combined with the way we’ve broken down barriers, particularly around affordability, the result is that about 30–40 per cent of our members are first-time gym-goers.
We have a very mixed demographic at our clubs, which is something people said would never happen. In Dubai, each social group tends to have its own hangouts, with little mixing going on. What GymNation has proved, however – flying in the face of all the received wisdom – is that you can have someone who earns a minimum wage training and socialising alongside a billionaire.
We were told that would categorically not happen, would not be acceptable to the consumer. The three of us disagreed and we’ve absolutely proved it can work.
So, it isn’t only price-sensitive people who join our gyms. Even those with plenty of money tell us they joined GymNation because it’s the best gym in town.
How popular is 24/7?
LH: 24/7 has been a huge success. Lots of people say their city is 24/7, but Dubai really is: you can go into restaurants and cafés at 4.00 or 5.00am and there will be people in there. If you go to Dubai Mall at 11 o’clock at night, there’ll be families in there with children. It’s probably driven by the airport, which is also 24/7, but Arab culture is just more nocturnal anyway: it’s extremely hot during the day, so people are driven towards more nocturnal behaviour.
So yes, 24/7 has worked well for us. Come to any of our clubs at 4.00am and you’ll find a decent number of people working out.
FA: Especially during Ramadan. You go in at 4.00am and it’s just packed. Everyone is working out before they break their fast.
LH: We were the first gym in Dubai to go 24/7 and were always surprised that no-one else had done it.
The Economic Department here initially said no gyms were allowed to be 24/7, but we just kept going back and saying ‘we want to be the first, we think there is demand, we’ll do whatever it takes from a health and safety perspective for you to approve this’. And eventually they agreed to let us be the test case.
They’re delighted with it now: all of our clubs get approval for 24/7 opening.
FA: We even get sign-ups at night. We put our night-time security guard onto a sales contract because he was signing so many people up: we’re talking 25–30 sales a night between midnight and 6.00am. He now earns commission.
How did COVID impact your business?
LH: We obviously didn’t bill people during the closure period, so we lost revenue and still had a lot of operating costs. Additionally, on re-opening, we lost quite a significant portion of our membership base: people were made redundant and went back to their home countries.
That has quite materially impacted us, but it has been significantly offset by new sales activity.
AM: We continued to sell memberships at our three existing clubs throughout lockdown, even though they were closed. People couldn’t come to the gym, so we used the time for marketing and sold 2,000 new memberships. Meanwhile, actual pre-sales were also going on for the clubs that were still in fit-out.
FA: During that whole lockdown period, people realised health was important. They also realised there’s only a certain level of exercise you can do – and will be motivated to do – at home.
As soon as the gyms were open again we were back to normal.
Due to the sheer size of our gyms and studios we can socially distance and still maintain close to previous capacities. The government here does COVID-19 spot checks on gyms. We’ve been checked more than 40 times now and have a 100 per cent pass rate, so our transmission control measures are working.
It’s been almost like a Christmas/New Year period for us, with sales back to their highest levels since reopening: we’ve had three months now where our sales have been, as a combined aggregate three months, the hottest sales period we’ve ever experienced as a business.
AM: Interestingly, we were keeping a close eye on what some of the big global players were doing during lockdown and I think we were one of very few operators that kept the marketing team working.
We kept the same messaging, we kept the ads, and in some cases, especially building up to the re-opening, actually increased the budget to help satisfy the interest that was there.
What are your plans moving forward?
LH: COVID was a major disruption, but in terms of our objectives for the end of this year, nothing’s changed. We believe our business, our brand, our whole proposition can comfortably trade through this challenging period, so we decided to invest through the cycle.
We currently have two gyms open in Dubai and one in Ras al Khaimah, with a number in pre-sale, including the Abu Dhabi club we mentioned earlier.
By the end of this year, we’ll have opened eight clubs and are aiming to reach 50,000 members.
What’s been very pleasing is that the pre-sales launched immediately after lockdown have gone very well. We’ve hit all of our original budgets, which has justified our decision to keep the investment in place and to get our new clubs open.
So I think we’ve weathered the storm well. We’ve traded throughout the crisis, and although the market will contract – globally and specifically here in our market – we believe we can take market share through having a fantastic product that people will happily buy into.
People were already crying out for us to open in their area: we put social media ads up sometimes, asking where GymNation should open next, and we get floods of requests. And now more than ever, given the economic climate post-COVID, there’s a likelihood that people will choose to pay AED99 a month for their gym membership rather than AED400–500.
Fast-forward beyond 2020, what are your plans?
LH: Off the back of the success we’ve had here in the UAE, we want to do further business here: we’ll have one club open in Abu Dhabi by the end of the year and there’s scope for plenty more there, and we’d like to have a GymNation in each of the Emirates.
We’d also like to roll the brand out across the GCC (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates).
Saudi Arabia, for example, is a market of 30 million people, compared to 6–7 million in the UAE. We’ve already started our due diligence there and many of the characteristics of the Saudi market are the same as the UAE, with expensive gym membership and comparatively low sophistication among current operators.
We believe it’s ready for the GymNation concept and hope to have the same success there as in the UAE in terms of breaking down the barriers around intimidation and affordability.