New research from Deloitte and EuropeActive, out this month (see page 58), dramatically highlights the impact of government policy on the prospects of the health and fitness sector across Europe.
This is the eighth edition of the European Health & Fitness Market Report and the authors note that this is the first time the sector has contracted in size.
The changes are especially marked given we came off the back of a record-breaking year in 2019, when the industry in Europe reached €28.2bn in turnover. This dropped to €18.9bn in 2020 – a 32.9 per cent fall.
The report reveals that the impact of the pandemic has been uneven across Europe, with government pandemic responses, legal frameworks, and tax regimes having a major impact on trading in the sector during 2020.
Lockdowns ranged in extent from Sweden, where there were no closures, to the UK, where operators lost more than 50 per cent of trading time across the year.
This uneven lockdown response saw UK operators such as Nuffield recording drops in revenue of 46.5 per cent against SATS in Sweden with 18.5 per cent.
Member numbers were also impacted by the pandemic in 2020, however, Germany, where contracts tie consumers into ongoing payments, saw operators faring better than in many other countries, for example.
As highlighted by the report, VAT rates on health club fees have also played a part in the success of the sector, with varying rates being reported, from a low of 0 per cent for Swedish public sector providers to 27 per cent in Hungary, with other nations ranged in between.
Deloitte points out that where VAT on fees has been reduced and that reduction has been passed on to consumers, there have been increases in participation.
Ireland is cited as an example – VAT was reduced from 13.5 per cent to 9.0 per cent, prompting a corresponding increase in ‘personal exercise in gyms and leisure centres’ from 11 per cent to 13.8 per cent and showing how powerful government support can be.
During lockdowns, huge energy went into lobbying for essential status and VAT breaks. This has inevitably waned a little since trading recommenced, however, the Deloitte report highlights how important it is that we keep fighting until governments recognise the full impact they have on participation and the success of the sector.
COVID-19 variants are driving infection rates and we have another long autumn and winter ahead in Europe, so now’s the time to be uniting and recommitting to this essential lobbying.
Let’s get behind EuropeActive, ukactive, and the other 24 European fitness associations and ensure our voice is heard and that we get the support and recognition we need to be able to optimise our valuable work.