Feature Article - June 2015
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2015 State of the Industry

A Look at What's Happening in Recreation, Sports and Fitness Facilities

By Emily Tipping


Revenues & Expenditures

Over the past several years' worth of industry report surveys, respondents have been increasingly positive regarding revenue changes, with a growing percentage expecting to see higher revenues, and a corresponding decrease in the percentage who are expecting to see revenues fall.

Since 2010, the percentage of respondents expecting to see higher revenues from one year to the next has generally increased (with an exception in 2012-13). In 2014, 39.5 percent of respondents said they saw higher revenues in 2013 than in 2012. In 2015, 43.6 percent of respondents reported that their revenues had risen from 2013 to 2014.

At the same time, while 14.9 percent of respondents in 2014 reported a decrease in revenues from 2012 to 2013, in 2015, 12.4 percent reported seeing a decrease. (See Figure 10.) In fact, the percentage of respondents reporting decreasing revenues has fallen steadily, from 20.8 percent reporting a decrease in 2010 to 2011.

Looking forward, the percentage of respondents who expect revenues to increase continues to grow, with 48.9 percent of respondents predicting an increase in revenues from 2014 to 2015, and 49.4 percent predicting an increase from 2015 to 2016. At the same time, the percentage expecting revenues to drop falls from 7.7 percent expecting a decrease from 2014 to 2015, to 5.4 percent who expect a decrease from 2015 to 2016.

Respondents from suburban communities were the least likely to report stable revenues from 2013 to 2014. They were both the most likely to report that revenues had increased (45.5 percent of suburban respondents) and the most likely to report that revenues had decreased (13.9 percent). Urban respondents reported the most stable revenues in that time period, with 49.2 percent indicating revenues had remained the same from 2013 to 2014. Some 39.6 percent of urban respondents reported an increase, and 9.8 percent reported a decrease. At the same time, 42.9 percent of rural respondents reported an increase, and 12.3 percent reported a decrease.

Looking forward, suburban respondents continue to have the most positive outlook in terms of revenue growth, with 51.5 percent predicting an increase from 2014 to 2015 and 52 percent predicting an increase from 2015 to 2016. Rural respondents were the least likely to be expecting increases, with 46.7 percent expecting an increase in 2015, and 46.5 percent expecting an increase in 2016. At the same time, rural respondents are the most likely to predict decreasing revenues, with 9.4 percent expecting revenues to fall in 2015 and 7.5 percent expecting a decrease in 2016.

Looking at revenues according to facility type, those from camp facilities and YMCAs were the most likely to report that revenues had increased from 2013 to 2014. Some 60 percent of camp respondents and 59.7 percent of YMCA respondents reported an increase in that period.

Respondents from schools and colleges were the most likely to report that revenues remained stable from 2013 to 2014, with 67 percent of schools and 58.6 percent of colleges reporting no change to revenues in that period.

Respondents from health clubs and schools were the most likely to report that revenues had decreased from 2013 to 2014. Some 17.8 percent of health club respondents and 15.5 percent of school respondents indicated a drop in revenues last year.

Looking ahead, respondents from colleges and schools continue to be the most likely to expect stable revenues. From 2014 to 2015, 61.4 percent of college respondents and 60.4 percent of school respondents said they expected revenues to remain the same. From 2015 to 2016, 62.2 percent of school respondents and 60.4 percent of college respondents expect stable revenues.

Camp respondents are the most optimistic in terms of future revenues. From 2014 to 2015, 70.4 percent of camp respondents said they expect to see an increase in revenue. And from 2015 to 2016, 71.7 percent expect an increase.

School respondents were more likely by large margin to expect to see revenues fall in 2015 and 2016. Some 21.8 percent of school respondents said they expect such a decrease from 2014 to 2015, and 20.2 percent expect a decrease in 2016. They were followed by park respondents in 2014-15, with 7.2 percent of those respondents expecting a decrease in that time frame, and by colleges in 2015-16, with 8.7 percent expecting a decrease.

After reporting slight decreases to average operating expenditures for the past two years, this year saw a substantial jump in operating expenditures—a 24.9 percent increase from an average of $1,431,000 in fiscal 2013 to $1,787,000 in fiscal 2014. While this is still 8.1 percent lower than the highest average reported in 2009 ($1,944,000), it represents a substantial increase from the years following the onset of the recession.

Looking forward, respondents projected a 5.5 percent increase from fiscal 2014 to fiscal 2016, from $1,787,000 to $1,886,000. (See Figure 11.)

While respondents from urban communities reported the highest overall average operating expenditure for 2014, at $2,128,000, these respondents reported the smallest increase from 2013. For urban communities, average operating expenditures increased 14 percent from $1,867,000 in 2013. The largest increase was reported by rural communities, with average operating expenditures rising 34.9 percent from $923,000 in fiscal 2013 to $1,245,000 in fiscal 2014. Suburban respondents reported a 25.3 percent increase, from $1,610,000 in fiscal 2013 to $2,017,000 in 2014.

Looking forward, rural respondents also expect the largest increase in average operating expenditures between 2014 and 2016, projecting a 9.9 percent increase to an average of $1,368,000. They were followed by suburban respondents, who projected an increase of 4.7 percent to an average of $2,111,000 in fiscal 2016. Finally, urban respondents projected a 3.7 percent increase, to an average of $2,207,000 in fiscal 2016.