Pandemic teaches Kuwait’s fitness industry a healthy business lesson

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Fitness centers in Kuwait have adopted novel business approaches in the wake of stringent virus curbs, including renting out equipment. Supplied
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Fitness centers in Kuwait have adopted novel business approaches in the wake of stringent virus curbs, including renting out equipment. Supplied
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Fitness centers in Kuwait have adopted novel business approaches in the wake of stringent virus curbs, including renting out equipment. Supplied
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Updated 05 December 2020

Pandemic teaches Kuwait’s fitness industry a healthy business lesson

  • Gyms and fitness clubs in Kuwait were forced to shut down in mid-March and not allowed to resume until the end of August
  • To survive the pandemic, club owners were forced to innovate: renting out equipment and moving training sessions online

KUWAIT: The COVID-19 outbreak has had devastating effects on almost all aspects of business in the region, and the gym and fitness sectors are no exception. In response to this unprecedented challenge, some operators have come up with innovative ways to stay afloat and continue serving their customers.

Before the virus hit, the fitness market in Kuwait had achieved a steady annual growth rate of around 6 percent between 2012 and 2017. This expansion was fueled by an increasing expatriate population, widespread obesity, and a rise in health consciousness that has led to a shift in lifestyle. The growth rate was expected to hit around 10 percent in 2022, based on a report by Research And Markets.

“The COVID-19 pandemic has affected our business greatly over the past six months and will continue to do so until people feel safe to return to the normality of life,” said Anthony Brown, operations manager at Elite Fitness, a facility in Kuwait that offers personal training, group fitness classes and aerial yoga, among other fitness activities.

Gyms and fitness clubs in Kuwait were forced to shut down in mid-March. As part of the government’s reopening plan, the sector was not allowed to resume operations until the end of August with certain restrictions in place to limit the spread of the disease among gym-goers.

“You put people together in a closed environment, particularly where they engage in strenuous activity that may involve them producing droplets, heavy breathing, shouting, whatever else,” Dr. Mike Ryan, an epidemiologist and the executive director of the World Health Organization’s Health Emergencies Program, said in a Q&A session on COVID-19.

With six full months of complete business shutdown, Elite Fitness — as other fitness businesses in Kuwait — had to innovate to remain afloat and ensure their staff of almost 70 people can survive.

“We immediately went online, offering classes and personal training sessions to be conducted through apps such as Zoom and Instagram,” Brown said.

According to him, that was not enough because a gym’s main source of revenue is people walking through the door and buying a membership. Thus, Elite Fitness and some of its peers decided to move the gym to customers’ homes.

“We are very fortunate in that we have a huge stockpile of equipment, so we were able to do this without compromising any equipment which we use in our facilities on a day-to-day basis,” Brown said.

IN NUMBER

6% Annual growth rate of Kuwait’s fitness sector in 2012-2017.

Over this period, the maintenance workers, receptionists and management team successfully rented out various gym equipment to over 100 customers. Most of the gear was delivered and unloaded in homes to ensure it arrived safely and in proper working order.

“People are now in the habit of (exercising) at home; they have seen the ease with which it can be done and the time and money they can potentially save,” Brown said.

While this shift might not be in the best financial interest of the gym industry, adapting to the new reality has helped Elite Fitness deal partly with the devastation the pandemic has caused.

Furthermore, current restrictions on the number of people allowed into fitness facilities increase the burden on the industry as it tries to recover. “We have over 3,500 square meters (of space). For our business to be functioning and profitable, we need to keep it busy,” Brown said.

Before COVID-19, Elite Fitness delivered over 200 sessions of personal training daily. Limits on how often members can come to the gym and the fact that classes can no longer be back to back to allow for cleaning have significantly impacted the number of training sessions the company can currently offer.

Brown, however, is not worried about the long-term prospects of his industry. “I think, with time, more people will start coming back. Gyms in Kuwait are very social and give people an outlet to interact, so inevitably they will again want to do this,” he said.

“As the market begins to recover and the population starts to regain confidence in getting out and (being) social, the industry will again start to boom, as it has over the past 10-15 years.”

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ª This report is being published by Arab News as a partner of the Middle East Exchange, which was launched by the Mohammed bin Rashid Al Maktoum Global Initiatives to reflect the vision of the UAE prime minister and ruler of Dubai to explore the possibility of changing the status of the Arab region.

 

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How online sales cushioned coronavirus’ blow to Middle East art markets

The global art market, which has an annual worth of $64.1 billion according to Swiss multinational investment bank UBS, had been growing steadily in recent years until the coronavirus outbreak forced galleries to close, stopping sales and exhibitions. (Supplied)
Updated 17 min 35 sec ago

How online sales cushioned coronavirus’ blow to Middle East art markets

  • COVID-19 containment measures have forced galleries and auction houses to embrace digital technologies 
  • Sotheby’s and Christie’s both report uptick in digital sales, even as coronavirus drives down the market 

DUBAI: Creative industries the world over have suffered under COVID-19 containment measures, which have led to event cancellations and loss of income for artists and venues. Although community-based initiatives in the Middle East have helped art-world professionals weather the worst of the pandemic’s financial blows, the art market itself has been forced to adapt to strange new circumstances.

The global art market, which has an annual worth of $64.1 billion according to Swiss multinational investment bank UBS, had been growing steadily in recent years until the coronavirus outbreak forced galleries to close, stopping sales and exhibitions, and ate into the spending power of collectors.

Indeed, according to “The Impact of COVID-19 on the Gallery Sector” report published by UBS and Art Basel, which surveyed 795 galleries and 360 collectors from the US, UK and Hong Kong, the pandemic cut modern and contemporary gallery sales by 36 percent, with a median decline of 43 percent compared with the first six months of 2019.

With restrictions on movement and lockdowns forcing the closure of their venues, gallerists were forced to come up with new ways to sell their art and promote their artists, including virtual fairs. (Supplied)

The smallest galleries, with a turnover of less than $500,000, reported the biggest decline in sales, with many forced to downsize and lay off staff. The findings appear to mirror a drop in sales across many luxury goods industries over the course of the year.

With restrictions on movement and lockdowns forcing the closure of their venues, gallerists were forced to come up with new ways to sell their art and promote their artists, including virtual fairs. Although gallerists have their reservations about the efficacy of virtual fairs, it does seem they are here to stay for the foreseeable future — at least until more in-person events can be held safely.

The auction world, on the other hand, has not seen sales significantly dented by the shift to digital. Sellers remain eager to shed their valuables and buyers are as hungry as ever.

For instance, at Sotheby’s online contemporary art sale at the end of June, buyers paid top dollar for a number of pieces. A Jean Michel Basquiat drawing sold for $15 million and a Francis Bacon triptych went for almost $85 million.

In the Middle East auction world, sentiments were also positive. In 2020, 52 percent of Sotheby’s MENA-related auctions came from online-only sales — a percentage based on six online and two live auctions. By comparison, there were seven live and no online auctions in 2019 and five live and no online auctions in 2018.

In 2020, 52 percent of Sotheby’s MENA-related auctions came from online-only sales — a percentage based on six online and two live auctions. (Supplied)

“That is not to say that there wasn’t plenty of online bidding and buying in these sales,” Edward Gibbs, Sotheby’s chairman of the Middle East and India, told Arab News. “But 2020 has been a year of fundamental change, which will have lasting effects moving forward.”

The process of adoption of digital modes had already begun in earnest, but truly came into its own with the onset of the pandemic. “The art market has historically been slow to embrace e-commerce; however, findings indicate that this has changed in the face of the crisis,” the Art Basel and UBS report said.

Indeed, in the first half of 2020, online sales accounted for 37 percent of galleries’ total sales — up from 10 percent in 2019. Of the collectors surveyed for the report, 85 percent or more said they had visited online viewing rooms for galleries or fairs, with just under half of them having used these platforms to finalize a purchase.

Some 66 percent of galleries surveyed anticipated that online sales in the gallery sector would further increase in 2021.

INNUMBERS

Art market

* $64.1bn Annual value of global art market.

* 36% Decline in gallery sales vis-a-vis first 6 months of 2019.

* 52% Online-only sales’ share of Sotheby’s MENA auctions in 2020.

“Among the many positive learnings to take into the new year include the importance of digital innovation and the irrepressible power of art and rare objects,” said Gibbs.

“In terms of technology, Sotheby’s has spent the past few years developing its own online sales platform, meaning that when coronavirus hit, we were able swiftly to scale up operations and bring new categories, never included online before, into an ever-broader range of offerings.”

Middle Eastern clients have always been among their most tech-savvy, he says.

“We held our inaugural online sale out of Dubai, as well as our first ever online sale of modern and contemporary Arab and Iranian art,” Gibbs said.

“Even in more traditional markets, such as with Islamic art for instance, this has also been the case. In our most recent Arts of the Islamic World and India live sale, over half of bidders who participated in the sale transacted online.”

Abdulrahman Al-Soliman’s, Untitled (1981) worth between an estimated $61,500 to $75,200. (Supplied)

The sentiment is shared at Christie’s. “There’s a very healthy uptick in online sales,” Caroline Louca-Kirkland, managing director of Christie’s Middle East, told Arab News. “We saw a large number of new registrants or clients that we didn’t have before that came through the online portal.”

In Nov. 2020, Christie’s Middle East celebrated its 15th autumn sale season with three online auctions. One of them was ‘We Are All Beirut’ — a charity initiative to provide relief and support to the arts community in the Lebanese capital following the Aug. 4 port explosion. The event raised over $680,000 to help rebuild the city’s art and cultural community, including Beirut’s historic Sursock Museum.

“Having online auctions without viewings during a lockdown and travel bans was challenging, but we did see some positive results,” Louca-Kirkland said. “We broke the record for Samia Halaby ($542,000) and achieved an impressive ($406,000) for a 1982 work by the late Moroccan master Mohamed Melehi. Additionally, we saw a record for Ranya Sarakbi’s Ouroboros ($406,000) in our inaugural design section.”

Christie’s saw great interest from collectors in Lebanon for its Beirut charity sale. “However, controls on overseas money transfers from Lebanon prevented collectors in Beirut from being able to participate in the auction,” Louca-Kirkland said.

“The Lebanese art market is suffering from the current banking restrictions and its political situation. Equally, the continued sanctions and other geopolitical hurdles have affected the Iranian market.”

A highly important Mamluk gilded and enamelled glass flask from Syria dated to the 14th century, worth up to an estimated $684,000. (Supplied)

In other parts of the Middle East the market is more promising. “There is still a healthy art market, in particular we are seeing a growing appetite for North African art, and new buyers coming in through the online platform,” she said. Nevertheless, “we need to support the Iranian and Lebanese art markets during these times.”

Christie’s Middle East intends to hold its annual art sale in October in London.

Although online platforms have been widely used during the pandemic, collectors have indicated they are not their preferred means to interact with artists and galleries.

Asked by the Art Basel and UBS survey how they would prefer to view art, 70 percent opted for attending a physical or offline exhibition or fair, versus 30 percent who preferred to use online viewing rooms or other online platforms.

Despite ongoing restrictions, some 82 percent of collectors said they plan to attend exhibitions, art fairs and events sometime in the next 12 months. Digital formats may have gained ground during the pandemic, but it would be wrong to predict the demise of real-world galleries and auctions any time soon.

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Twitter: @rebeccaaproctor