The race to invest in luxury gym centers in Vietnam’s cities

VietNamNet Bridge – Investment in luxury gym centers has become a lucrative industry in Vietnam as the demand for doing workouts at well equipped-gym centers, with luxury additional services, of wealthy people in Vietnam is rocketing.

Ten years ago, many people thought of gym centers equipped with dumbbells only, where only men developed their muscles. Today, international-standard gyms have become popular in big cities in Vietnam. The race to invest in million USD gym facilities has boomed.

Le Viet Quy, who has been a member of a big fitness and yoga center in HCM City for three years, said that he chose this modern center as it is part of a nationwide system of fitness and yoga centers so he could do workouts during his business trips to other cities. Though he had to pay several thousand USD for the membership in advance, the money is worth it because he can enjoy luxury services at well-equipped gyms.

Ngo Manh Duy, an office worker in District 7, HCM City, has just changed from a small, old-style gym center near his home to a big one in District 2.

Duy said the membership charges at the gym near his home are very cheap, only VND200,000-VND400,000 ($9-18)/month but it is old, poorly-equipped and always smells. There are only dumbells, several weight machines and no sauna service.

In Vietnam, the model of modern fitness centers appeared about 9 years ago, with several popular names like California Fitness & Yoga (owned by CMG, USA), which opened its first gym center in 2007, Getfit Gym & Yoga in HCM City and Elite in Hanoi, which opened their first gyms in 2010. In 2012, a brand from Germany joined the market - Fit24. The latest newcomer is Fithouse in HCM City.

If the investment in a small, old-style gym center of about 200-300m2 is VND500 million ($23,000), it is millions of USD for modern ones, which are usually 2,500sq.m. However, investment continues to flow into this new, lucrative industry.

In January 2014, the largest financial conglomerate in Japan - Mizuho Asia Partners (under Mizuho Bank) – paid $15 million to acquire 10% stake in California Fitness & Yoga chain. Only 18 months later, the centers of this system doubled. This brand is now the "chicken that lays golden eggs" for CMG with 23 centers in 7 provinces.

"We have 18 different brands in our portfolio, but we still attach importance to the development of fitness to become a Fitness Holdings corporation," said Dane R. Fort, CEO of CMG.

Five years ago CMG began diversifying fitness services to serve all kinds of customers. In addition to California Fitness & Yoga centers (for customers aged 25-35), CMG owns 7 other centers, with brands California Yoga Plus (specialized in Yoga); California Centurion (for middle aged members); UFC Gym (martial art coordination), and California Kids (sport for children).

Other brands are also expanding their networks. Elite Fitness has reached its hand to HCM City, after building 6 centers in Hanoi. Fit24 currently owns four centers. Chairman of the Getfit Gym & Yoga Nguyen Huu Phuc confirmed the intention to open a few more centers from now to 2020, with an average growth rate of 20-30% per year.

Phuc said although the high-end gym model is developing very fast in Vietnam, some investors failed due to lack of experience and qualified human resources.

Experts said that the model of high-end gyms will sustain high growth rates, about over 50%. Many international brands will come to Vietnam. The reason is that the density of modern gyms is still low, compared with Singapore, Thailand and Hong Kong (China). 

At these places, one can find a modern gym center within a radius of 1km while each district of Ho Chi Minh City has only a few modern centers.

According to data of the International Health, Tennis and Sports Clubs Association (IHRSA), there were more than 180,000 fitness clubs worldwide in 2015, attracting 144.7 million members, with sales of about $84 billion.

Khuyen Bui

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