The Swiss Fitness and Health Center Association SFGV informs in a press release about the current state of the economy regarding the mid-term and long-term consequences of the Corona closures, hardship payments as well as the industry contribution through time credits.
The Swiss Fitness and Health Center Association SFGV conducted a representative survey among its members regarding the current economic situation. The respondents were 310 German-speaking SFGV fitness and health centers, 73 companies from French-speaking Switzerland and 22 companies from Ticino.
The survey was conducted by the SFGV president, Claude Ammann. The two standardized questions were as follows:
1. to what percentage is your company currently working to capacity (number of customers), in relation to capacity utilization before the Corona crisis?
2) Were you able to cover your fixed costs with the hardship funds?
Current status of customer numbers
Only three of the gym operators surveyed reported being back to the same number of customers as before the Corona measures.
SFGV members are currently averaging a current customer count of 68.61% of pre-Corona membership, meaning on average gyms have experienced a loss of just over 30%, which will still exist in the fall of 2022.
The lack of customers, along with credited time for the closed months (Covid-19 measures), can put businesses in cash straits. Further curtailment this coming winter would have worshipful consequences. The 30% loss in revenue threatens the very existence of the business.
Time credits cost a lot of money
The time credits demanded by customers further distort this result, as the normal renewal deadlines of the contracts have been pushed back by several months. This delays revenue by several months, during which revenue and liquidity are missing.
To make matters worse, more than 30% of the customer base is also missing and needs to be recovered. All of these reasons can cause economic bottlenecks, depending on how companies have been able to reduce costs accordingly.
If it is assumed that in the first closure period (17.03. to 10.05.2020) there was still a large and accommodating goodwill of the clientele in fitness studios, in the second closure (22.12. to 18.04.2021) the credit note demands of the customers had to be met 100% in most fitness studios.
Basis of calculation: first period goodwill: 50% of the time was credited. The second period was credited 100% of the time. This results in a rounded value of 5 months of time credits.
Based on an annual turnover of the fitness and health industry in Switzerland of CHF 1,336,000,000 (Industry Report 2020 of the SFGV), the following calculation results: 12 months x 5 months as credits results in 556 million Swiss francs, which the fitness and health center industry had to contribute through time credits.
This means that the SMEs of the fitness and health center industry had to contribute 556 million francs from their own reserves to the management of the Corona measures through the time credits.
Hardship funds
It is particularly striking that practically every canton paid out different amounts of hardship payments, which resulted in a distortion of competition. It can also be said that for 66% of the companies, the hardship payments were not sufficient to cover the running fixed costs, not including the time credits.
Almost all gyms had to use at least 5% (up to 12%) of the hardship money paid out to pay the trustee costs. The complicated procedures, special tables and evaluations or excessive documents for the authorities required professional supervision, which caused corresponding costs. In addition, the extremely bureaucratic processes and the extremely long waiting times until payment were criticized.
Increased energy prices
In addition to the above-mentioned economic bottlenecks, the situation is now aggravated by the fact that energy prices have risen sharply, further increasing ongoing fixed costs.
Due to the sales losses described at the beginning and the uncovered fixed costs from the Covid-19 measures, the SFGV recommends to its members, so it says in the press release, an increase of the prices for memberships around at least 5% is justified.
Source : BODYMEDIA
Image source: #66575379 sezerozger / stock.adobe.com
Published on: 1 October 2022