2016 State of the Industry
A Look at What's Happening in Recreation, Sports and Fitness Facilities
By Emily Tipping
Between fiscal 2012 and fiscal 2015, respondents from colleges and YMCAs reported the greatest increases in their average operating expenditures. College respondents reported a 41.3 percent increase from an average of $1,661,000 in fiscal 2012 to $1,790,000 in fiscal 2015, while YMCAs saw a 23.7 percent increase in the same time period, from $2,166,000 to $2,679,000. (See Figure 13.) More modest increases were reported by health clubs (15.6 percent increase), parks respondents (14.6 percent) and community recreation centers (9.8 percent).
From fiscal 2012 to fiscal 2015, respondents from camps and from schools both reported slight decreases in average operating expenditures. Camp respondents saw operating expenditures fall by 1.5 percent from $996,000 in fiscal 2012 to $981,000 in fiscal 2015, while school respondents reported a 0.5 percent decrease from $1,519,000 to $1,512,000.
From 2014 to 2015, only respondents from health clubs, community recreation centers and YMCAs saw their average operating expenditures increase, while other facility types reported decreases. The greatest increase was seen in health clubs, which saw operating expenses rise 39.8 percent to $1,343,000 in fiscal 2015. They were followed by community recreation centers, with an 11.8 percent increase, and YMCAs with a 9.8 percent increase.
The greatest decrease to average operating expenditure between 2014 and 2015 was seen among respondents from camps, who reported a 20.2 percent drop, from $1,229,000 in 2014 to $981,000 in 2015. They were followed by schools and school districts, who reported an 11.6 percent drop, parks respondents (3.9 percent) and colleges and universities (1.6 percent).
Looking forward, respondents from community recreation centers, YMCAs and parks expect to see the greatest increases in their operating expenditures between 2015 and 2017, while health clubs and schools are expecting decreases in that time frame. Community recreation center respondents expect operating expenditures to rise 13.3 percent between 2015 and 2017, to an average of $1,317,000. They were followed by YMCAs, with a 10.2 percent increase, parks (8 percent), camps (7.1 percent) and colleges (2.6 percent). Respondents from health clubs expect the greatest decrease, projecting an 8.6 percent drop in operating expenditures to an average of $1,228,000 in 2016. They were followed by schools, with a 4 percent decrease.
For the first time in our 2016 Industry Report survey, we asked respondents to consider what percentage of their operating costs were recovered via revenues. As many are well aware, more and more organizations—even nonprofits and governmental organizations—that provide recreation, sports and fitness are being asked to run more like businesses, and are thus required to recover more of their costs via revenues.
Interestingly, 22.8 percent of respondents said they recover only 0 to 20 percent of their costs via revenue, while at the same time 22.3 percent report that they recover between 80 and 100 percent of their costs via revenue. Some 17.1 percent of respondents said they recover between 90 and 100 percent of their costs. On average, for all respondents, 49.6 percent of costs are recovered via revenues, with that percentage varying widely depending on the organization type and facility type. (See Figure 14.)
Respondents from public organizations reported earning the smallest share of their operating costs back via revenues, at 42.9 percent. As might be expected, the greatest percentage was found among private for-profit organizations, at 69 percent. They were relatively closely followed by private nonprofits at 61.5 percent.
Respondents from YMCAs, camps and health clubs reported earning the highest percentage of their operating costs back via revenues. YMCAs reported that they earned 72.3 percent of operating costs, while camps earned 70 percent and health clubs earned 67 percent. They were followed by community recreation centers, at 55.6 percent.
Earning less than half of their operating costs via revenues were parks (45.1 percent), colleges (35.5 percent), and schools and school districts (32.4 percent).
While a majority of respondents (83.5 percent) reported that they had taken action to reduce their operating expenditures, that number has fallen relatively steadily over time from a high of 90.3 percent in 2011.
The most common action taken to reduce expenditures was improving energy efficiency. More than half (51.6 percent) of respondents reported that they had tried to improve energy efficiency in order to reduce operating expenses. (See Figure 15.) Other more commonly used methods of reducing expenditures included increasing fees (44.8 percent), reducing staffing levels (32.8 percent), and putting construction or renovation plans on hold (29.7 percent). Less common were cutting programming or services (19 percent), reducing hours of operating (18.4 percent), shortening the operating season (8.8 percent), and closing facilities (5.4 percent).
Respondents from health clubs, parks and YMCAs were the most likely to report that they had taken action to reduce their expenditures. Some 87.1 percent of health clubs, 86.3 percent of parks and 85.1 percent of YMCA respondents reported they had taken such actions. Schools respondents were the least likely to have acted to reduce operating expenses, though nearly three-quarters (74.4 percent) had done so.
Camps were more likely than any other facility type to report that they had improved energy efficiency (57.5 percent of camps had done so), increased fees (56.7 percent) or put construction plans on hold. YMCAs were the most likely to report that they had reduced staffing levels (52.6 percent). College respondents were the most likely to report that they had cut programming or services (27.7 percent), reduced their hours of operation (25.5 percent) or closed facilities altogether (7.8 percent). Parks respondents were the most likely to report that they had shortened their season of operation (12.3 percent).