Tuesday, November 5, 2024

Gyms are struggling to regain their financial balance

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The increase in bills responds largely to the increase in prices.

More income, but also higher prices due to higher costs and maintaining profits. The fitness industry maintained a growth streak in its sales volume in 2023, but this boom was due “largely to the urgent need to raise prices due to the significant increase in costs, so profits did not see the same upward trend,” says Alberto García. Director of the National Federation of Sports Facilities (FNEID).

The Gym Employers Association puts on the table that the latest data from the European Health and Fitness Market Report, prepared by Deloitte and EuropaActive, indicates that the sector in Spain will reach €2.1 billion in 2022, 32.9% higher than in 2021. , but it is still 10.7% lower than in 2019. A year in which the number of subscribers increased by 11.1%, reaching almost 5.4 million in Spain, with an average monthly payment per member of about 33 euros. Radiology is completed by the center statistics: the number reached 4,629, an increase of 1.3%, with an average of 1,163 members in each center, as the number of subscribers in each center increased by 9.8%.

What do you expect now? Currently, the data available for 2023 – there is still no final balance sheet – shows that gym registrations have failed to match the previous year's numbers. “The future outlook for the sports facilities sector is complex, and we estimate that sales volume will grow by about 4%, which is a slight increase compared to the level of maintaining expenses,” says the manager.

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Regarding users, although there has been an increase in the frequency of use of sports facilities, “Spain still faces difficulties in mobilizing established people, that is, integrating new people into sports practice.” In this sense, the Employers' Association considers “it necessary for public administrations to promote measures such as tax incentives through the personal income tax for people who exercise as a means of increasing exercise”.

This is a demand that the sector insists on, and it also demands the return of the value-added tax on sports services. “In 2012, these services went from a reduced value-added tax, 8%, to 21%,” Garcia recalls. “As of 2014, taxes on other activities for which the tax rate also rose to 21% in 2012, such as nightclub services, discos, spas, theaters or bullfighting festivals, began to be reviewed and reduced, while sports loan services provided to individuals continue to the same extent.” Maximum tax rate. Fnaid finds it incomprehensible that the value-added tax on sports practice amounts to 21%, and says that sports are health. However, “the message to young people is that, from a tax point of view, the government encourages access to discos or concert halls more than Other”. Access to a paddle tennis court, swimming course or gym.

Employers add specific placement to some gyms which makes the placement more difficult. “An example of this is the municipal concessions of the Madrid City Council, which cannot update prices, which means that all cost increases experienced by the concession cannot be compensated for by adjusting the price, a rate that must also be deducted. VAT 21% VAT which It is not applied by the public service, which makes the real rate for these companies lower than the general rate and with the impossibility of updating even the consumer price index,” concludes the CEO.

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