FIT FOR PURPOSE
Bulking up — Virgin Active pumps R430m into its SA facilities
The gym giant is channelling energy into club expansion, product innovation and new equipment to keep members coming back for more.
Ice baths, coworking spaces, tailored yoga studios and padel courts are envisaged to become part of the package at selected Virgin Active clubs across South Africa, as the gym group invests heavily in club and member experiences.
Virgin Active, the biggest player in the local fitness industry, has 129 gyms in South Africa, 43 in the UK, 33 in Italy, eight in Thailand, six in Singapore and 11 in Australia, with about 1.4 million members internationally.
The group in South Africa has invested more than R430-million to date in 2023 on club expansion, equipment, product innovation, a member app, a loyalty programme and to mitigate against rolling blackouts. There’s also a significant investment in industry-leading cardio and strength equipment.
Group CEO Dean Kowarski — the founder of the Real Food Group, which owns Kauai, NÜ Health Café, Schoon, Highveld Honey and Brother Bee — told a media roundtable this week that they had also invested heavily in alternative power solutions to ensure members could continue to use their facilities.
A hundred of their gyms currently have backup power solutions such as inverters and LED lights, with the remainder earmarked for roll-out over the next six months.
In June, Virgin Active launched its new smartphone app, which includes a digital access card and a loyalty programme to encourage and inspire members to achieve their goals.
The Virgin Active app allows members to scan in and out of the club without a card, earn points and unlock weekly rewards, training streak bonuses and membership discounts. Members have access to exclusive content across eight categories of exercise, including yoga and pilates. It also offers more than 700 workout videos.
“The app is there to encourage members to be healthier and to entrench healthy behaviour,” Kowarski said.
Earlier this year, the group partnered with Epic Padel to launch the Virgin Active Padel Club.
Padel courts are being built at existing Virgin Active clubs and at some new locations. Virgin Active will be partnering and managing the Virgin Active Padel Club with Epic Padel.
“We have also invested significantly in member experiences through our new app and rewards programme, as well as the new Virgin Active Padel Club, which will give our members more options and ease of access to wellness activities that they love. To date, 15 Padel courts have been opened in Cape Town and Johannesburg, with another 42 courts expected to launch by Q1 next year and a further 45 earmarked for the remainder of 2024,” Kowarski said.
The Virgin Active Padel Clubs are open to members and non-members.
Kowarski said the investment was driven by a widespread return to gyms and a refocus on wellness after the pandemic, with members supporting Kauai and NÜ Health Cafés at the gyms.
“We have seen very significant, double-digit growth in revenue, transaction costs and spend at Kauai (and NÜ, which are in select gyms). It’s not a cheap product, to be honest, but people are reallocating funds towards healthy eating and just looking after themselves.”
Where gym refurbishments are being done, the group is also focusing on creating coworking spaces, because many members are using the clubs as their “third space” to meet and work remotely.
“We’re committed to bringing increased value to our members through this investment, creating spaces and facilities that provide wellness solutions across the spectrum of fitness, nutrition and mental wellbeing. One of the cornerstones of building a sustainable business is being disciplined with capital allocation.”
On 3 September, the Sunday Times reported that an independent gym had taken Virgin Active, Planet Fitness and medical insurance companies that reward their members with discounted gym membership fees, including Discovery Health’s Vitality, Sanlam Reality and Momentum’s Multiply wellness rewards programmes, to the Competition Tribunal.
Antonio Iozzo, founder of Body Action Gym in Bedfordview, Ekurhuleni, accused the gyms and rewards programmes of cartel-like behaviour because the subsidised gym memberships are offered exclusively to members of the three rewards programmes.
Body Action is said to be a six-star, 5,000m² mega facility.
Iozzo wants the commission to compel Vitality, Sanlam and Momentum to extend the rewards benefits to his and other independent gyms.
Virgin Active dismissed the complaint as having no merit, reported the newspaper, saying all contractual agreements with reward scheme partners were “prepared and reviewed by expert competition law practitioners who ensure that the contracts comply with all competition laws” which the Competition Commission had been given sight of.
Lisa Short, on behalf of Planet Fitness, said they were aware of the complaint first laid with the Competition Commission and later self-referred to the tribunal.
“We are of the view that the complaint is without merit and fails at the level of fact and law. There is no basis to the contention that Planet Fitness is anticompetitive.”
The complaint is still being investigated. DM
This story has been updated. Virgin Active is managing the padel clubs with Epic Padel, not the Racket and Ball Club as previously reported.