Feature Article - June 2012
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Health, Fitness & Sports Clubs

A Look at Trends in Health, Fitness & Sports Clubs

Revenues & Expenditures

Respondents from health clubs had an operating budget in fiscal 2011 that was 23 percent lower than the average operating budget for all facility types. And while health club budgets grew by a smaller percentage from fiscal 2010 to fiscal 2011 than general respondents (an increase of 7.5 percent for health clubs vs. 8.8 percent for all respondents), health club respondents project more rapid growth in their operating expenditures from 2011 to 2013, with an increase of 12.7 percent compared with 5.1 percent for all respondents. Because of this, by fiscal 2013, the difference between general operating budgets and health club operating budgets will shrink to 17.4 percent.

Respondents from health clubs were more likely to report both increases and decreases in their revenues from 2010 to 2011 than the general survey population. While 37 percent of all respondents saw an increase and 20.8 percent saw a decrease in that time frame, 40.3 percent of health club respondents reported an increase and 30.6 percent reported a decrease. Over the next two years, more than half of health club respondents expect further increases in their revenues, with 54.3 percent expecting an increase in 2012 and 58.5 percent projecting an increase in 2013. At the same time, a decreasing number of health club respondents expect their revenues to fall in 2012 (14.3 percent) and 2013 (9.2 percent). (See Figure 50.)

Among health clubs, membership retention and growth is a driving force of business success, and the economic downturn brought some significant challenges in this area as household budgets tightened, forcing consumers to cut back. More than one-quarter (26.4 percent) of health club respondents in 2011 reported a decrease in the number of people using their facilities from 2009 to 2010. This year, nearly a third (30.6 percent) of health club respondents said that number had decreased again from 2010 to 2011.

However, there is substantial growth in the number of health club respondents who are seeing rising memberships, and who are projecting those increases to continue over the next couple of years. While just 41.7 percent in 2011 said the number of people using their facilities had grown from 2009 to 2010, that number rises to almost half (47.2 percent) of health respondents in 2012 reporting an increase in membership from 2010 to 2011. The number jumps to 58.8 percent projecting an increase from 2011 to 2012, and two-thirds (66.7 percent) expect to see an increase from 2012 to 2013. (See Figure 51.)

There was little change from 2011 to 2012 in the number of health club respondents who have taken action to reduce their operating expenses. In 2011, 87.7 percent had done so, and in 2012, 87.5 percent said they have acted to reduce expenses. The most common tactic employed by these respondents was improving energy efficiency. Some 58.3 percent of health club respondents had employed measures to improve energy efficiency in order to reduce operating expenditures. Substantially more health club respondents reported in 2012 that they had reduced staff, with more than half (51.4 percent) indicating they had done so, compared with just 38.4 percent in 2011. They also were more likely to report that they had increased fees (30.6 percent vs. 28.8 percent in 2011). They were less likely to report that they had put construction and renovation plans on hold (26.4 percent vs. 37 percent in 2011). Similar numbers in 2011 and 2012 said they had cut programs or services (20.8 percent in 2012 and 20.5 percent in 2011).

Reflecting the higher number of health club respondents who reported they had cut staff to reduce operating expenditures, there was a slight increase in the number of health club respondents who said they had plans to cut staff in 2012. While 1.4 percent of last year's respondents said they planned to cut staff in 2011, some 2.7 percent of respondents this year have such plans. This is still substantially down from 2010, when 9.8 percent of health club respondents planned to reduce staff.

The majority (86.3 percent) of health club respondents intend to keep staffing levels steady. Another 11 percent report that they have plans to add staff. On average, these respondents are planning to add 6.6 employees in 2012.