The promise sounds tempting for many employees: after work, you can choose to go to the yoga studio or go swimming, to the climbing hall or even go stand-up paddling, and all that without being tied to a provider, for relatively little money. In order for this to succeed, the employer usually contributes to the costs of such collective offers, which are offered by so-called fitness aggregators. Gympass and Hansefit, Urban Sports Club and Egym Wellpass are the names of the most well-known of these companies in Germany, whose promise to companies is basically: We make you attractive as an employer. And: We keep your workforce healthy.
In times of labor shortages, such messages are obviously heard: almost 40 percent of all employers grant their employees subsidies for membership in fitness aggregators, according to the current benefits study by management consultancy Kienbaum. The offers differ considerably – if only because different potential partners are available in each city.
25 percent return on sales
What is certain is that a lot of money can be earned with company fitness. Hansefit, for example, reported an annual surplus of almost 9 million euros with sales of 36 million euros in the Corona year 2021 – this corresponds to a return on sales of 25 percent after taxes. Such yields are still up to date, affirms Hansefit boss Alexander Wellhöfer. The entire industry benefits from growing health awareness and can achieve annual growth rates of 50 percent. Hansefit, according to its own estimates the market leader in business with corporate customers, will turn over 100 million euros in Germany this year, together with the business in the Netherlands it will come to 150 million euros. And: “In five years we want to have quintupled our sales.”
Hansefit-Chef Alexander Wellhöfer
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Bild: Hansefit
Those who make such announcements typically have a financial investor behind them and perhaps an IPO in mind, and that’s the case in this case as well. Half of the Bremen company belongs to Jens Pracht, who pioneered the fitness aggregator concept 20 years ago. The other half, however, has belonged to the financial investor Waterland for five years, which initially planned to expand through acquisitions, but is now pushing for strong organic growth – and made the former McKinsey man Wellhöfer Hansefit boss in 2022.
Fitness junkies cost first
Two factors are decisive for success, he explains his strategy: the right mix of partners from the fitness industry and the right mix of members. “The first 5 percent hurt,” says Wellhöfer, looking at the members: “These are the super fitness junkies.” That means: as long as only 5 percent of the workforce in a company can be enthusiastic about membership, those are the ones who really use their unlimited possibilities.
Bad luck for Hansefit, because the partner companies are paid proportionately for each individual check-in. It is inevitably better for the return if some of the employees do not train as intensively or, for example, prefer the inexpensive swimming pool. It should therefore be at least 20 percent of the workforce in a company who decide in favor of Hansefit, is Wellhöfer’s specification, he calls a 25 percent activation rate “okay”. Actually, you have to ask yourself what about the other 75 percent, says Wellhöfer and is thinking of developing more holistic offers beyond sports: “A five-minute back espresso also helps.” Ultimately, that’s what the employer is about to have as healthy a workforce as possible.
Concentration on small big cities
In order for the companies to bite, however, the fitness aggregators first need attractive partner companies. This tends to be difficult in rural areas. Metropolises, on the other hand, have great studios, but also steep prices, while cheap activities are rather rare. Hansefit therefore wants to focus on small cities (between 100,000 and 600,000 inhabitants). What the ideal network looks like is of course a trade secret, but internally it is very precisely defined what is necessary, for example how many yoga studios should be found as partners per 10,000 members and how they should be distributed regionally.
When Hansefit founder Pracht was still running the company himself (until the end of 2021), there were no such plans. Much came about by chance, such as the extraordinarily strong presence in Freiburg, Baden, where one of the North German Hansefit comrades-in-arms had once been privately drawn. Apparently he had a lucky hand for the acquisition.
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Even dance, golf or physiotherapy are part of the company fitness program in the city of 230,000 inhabitants. “At some point there is such momentum that a company can no longer afford not to be there,” Wellhöfer describes the momentum there. About half of all companies in Freiburg are Hansefit customers, and yet there is no sign of saturation. Wellhöfer is therefore not worried about growth opportunities, nor about returns: “We are more profitable than anyone else in the industry. We know how to do it.”