A Look at Trends in Health, Fitness & Sports Clubs
According to the International Health, Racquet & Sportsclub Association (IHRSA), there were 36,540 health clubs in the United States in 2017, and 57.3 million Americans belong to at least one of them. Total industry revenues worldwide were $83.1 billion, and in 2016, more than 200,000 clubs served some 162 million members around the world.
From niche studios to big-box gyms, the health club market is constantly evolving and innovating. Whether it's bringing creative new programs to inspire people to get fit or manufacturer innovations that take equipment to a new level, there's always some new way to motivate Americans to get to the gym and work out.
This section covers our health club respondents, which includes health clubs, sports clubs, fitness clubs and medical fitness facilities. These respondents made up 4.2 percent of the survey population.
As with the general survey population, respondents from health clubs are most likely to be from the Midwest. Some 30.3 percent of health club respondents are located in the Midwest. They were followed by the South Atlantic region (24.2 percent), the West (18.2 percent), the South Central region (15.2 percent) and the Northeast (12.1 percent). No health club respondents covered by the survey are located outside of the United States.
More than half (51.5 percent) of health club respondents said they are located in suburban communities. Another 25.8 percent are in rural areas, and 22.7 percent can be found in urban communities.
On average, health club respondents said they serve a population of 73,530 people. More than half (56.1 percent) of health club respondents said they reach a population of 20,000 or fewer people, compared with 47.8 percent of non-health-club respondents. Conversely, while 16.7 percent of health club respondents said they reach a population of 100,000 or more, 17.9 percent of non-health-club respondents reach a population of at least 100,000.
Nearly half (48.5 percent) of health club respondents are from private, for-profit organizations. Nearly another third (31.8 percent) said they are with private, nonprofit organizations, and 16.7 percent said they are with public organizations. Some 3 percent of health club respondents said they are with "other" types of organizations.
Respondents from health clubs manage an average of 3.4 facilities. They were more likely than non-health-club respondents to report that they manage just a single facility. Some 56.1 percent of health club respondents said they manage only a single facility, compared with 34.9 percent of non-health-club respondents. Conversely, while 17.6 percent of non-health-club respondents manage 10 or more facilities, just 3 percent of health club respondents said they have 10 or more facilities to manage.
Health club respondents were among the least likely to report that they form partnerships with other organizations, though a majority do so. While 69.2 percent of health club respondents said they partner with outside organizations, 87.4 percent of non-health-club respondents do so. The most common partners for health club respondents include: health care and medical facilities (41.5 percent of health club respondents partner with them); local schools (35.4 percent); corporate or local businesses (35.4 percent); nonprofit organizations (27.7 percent); and colleges and universities (23.1 percent).
Respondents from health clubs were far more likely than others to report that their primary audience is made up of adults. Some 71.2 percent of health clubs said adults are their primary audience, compared with just 14.2 percent of non-health-club respondents. Health club respondents are also more likely than others to serve seniors 65 and older as their primary audience, with 10.6 percent indicating this is their primary audience. This compares with just 2.3 percent of non-health club respondents. The remainder of health club respondents said their audience is made up of either all ages (13.6 percent of health club respondents) or teens (4.5 percent).
Revenues & Expenditures
The percentage of health club respondents who saw their revenues increase fell from 2016 to 2017, and the number whose revenues decreased also grew. From 2015 to 2016, 55.4 percent of health club respondents said their revenues increased, and 12.2 percent said their revenues fell. From 2016 to 2017, 46.9 percent saw an increase, and 21.9 percent reported a decrease in revenues. (See Figure 53.)
Health club respondents always tend to be optimistic when considering their future revenues, and this year is no exception, with 47.7 percent expecting revenues to increase in 2018, and 56.5 percent projecting an increase for 2019. Another 46.2 percent and 40.3 percent, respectively, said they expect revenues to remain the same in those years.
From 2016 to 2017, health club respondents' average operating costs fell at a slightly faster rate than the average for all respondents. While all respondents saw their average operating cost drop by 11.9 percent in that time period, health club respondents' average cost fell 12.4 percent, from $1,804,000 in 2016 to $1,580,000 in 2017. Looking forward, health club respondents expect further decreases, projecting that their operating costs will fall a further 9.5 percent, to $1,430,000 in 2019.
On average, health club respondents report that they recover 65.1 percent of their operating costs via revenue. This compares with 48.5 percent of operating costs recovered via revenue for all respondents. Health club respondents were more than twice as likely as non-health-club respondents to report that they recover at least 91 percent of their operating costs via revenues. Some 14.1 percent of non-health-club respondents said they earn back at least 91 percent of their operating costs, while 34.8 percent of health club respondents said they earn back 91 percent or more of their operating costs. Some 21.3 percent of health club respondents said they earn less than 30 percent of their operating costs back via revenues. Another 7.5 percent earn back 31 percent to 50 percent of revenues, and 6 percent earn back 51 percent to 70 percent of revenues. Some 46.9 percent of health club respondents earn back at least 71 percent of their operating costs via revenues.
The percentage of health club respondents who said they have taken action to reduce their operating expenses increased this year, one of the only facility types that was more likely in 2018 than in 2017 to take such action. Some 80.8 percent of health clubs had taken action in 2017, but in 2018, 86.4 percent of health club respondents said they have acted to reduce their operating costs. The most common actions they have taken include: improving energy efficiency (48.5 percent); increasing fees (34.8 percent), reducing staff (33.3 percent), putting construction or renovation plans on hold (22.7 percent), and cutting programs and services (16.7 percent).
Health Club Facilities
The percentage of health club respondents reporting an increase in the number of people using their facilities fell in 2018, though a majority going forward are expecting increases. From 2015 to 2016, 55.3 percent of health club respondents said the number of people using their facilities increased, and from 2016 to 2017 48.5 percent reported an increase. In that same time frame, the percentage reporting a decrease in usage grew from 11.8 percent to 16.7 percent. (See Figure 54.)
Looking forward, health club respondents grow more optimistic about membership increases over the next year, as is typically the case with this group. Some 56.5 percent of health club respondents said they expect to see utilization of their facilities increase from 2017 to 2018, and 63.3 percent are expecting increases from 2018 to 2019.
The percentage of health club respondents who are planning construction over the next few years has been increasing gradually over the past few years, and saw a big increase in 2018. In 2017, 59.2 percent of health club respondents said they had plans for construction, and in 2018, that number grew to 66.7 percent. Some 45.5 percent of health club respondents are planning to renovate their existing facilities. Another 21.2 percent are planning additions, and 19.7 percent are planning to build new facilities. (See Figure 55.)
Health club respondents in 2018 are planning to spend an average of $3,010,000 on their construction plans. This is a 20.4 percent increase from 2016, when these respondents had budgeted $2,500,000 for construction.
The features most commonly included among health club respondents' facilities in 2018 include: fitness centers, locker rooms, exercise studio rooms, Wi-Fi services, indoor aquatic facilities, childcare centers, indoor sports courts for sports like basketball and volleyball, classrooms and meeting rooms, indoor tracks and concessions.
The percentage of health club respondents who said they have plans to add features at their facilities over the next three years grew substantially from 2017 to 2018. In 2017, 19.7 percent of health club respondents had plans to add features, and in 2018, 30.3 percent have such plans. This compares with 43.7 percent of non-health-club respondents who plan to add features in 2018.
The most commonly planned additions among health club respondents include: bleachers and seating, fitness centers, indoor sports courts for sports like volleyball and basketball, indoor tracks, exercise studio rooms, climbing walls, outdoor courts for sports like tennis and basketball, fitness trails and outdoor fitness equipment, and walking and hiking trails.
Programming
Offering engaging, innovative and effective programs is one of the keys to a successful health club business, as it gets new members in the door and keeps existing members coming back for more.
The top 10 programs currently offered among health club respondents' facilities include: fitness programs (provided by 93.8 percent of health club respondents); mind-body balance programs such as yoga and tai chi (89.2 percent); personal training (83.1 percent); nutrition and diet counseling (63.1 percent); programming for active older adults (60 percent); aquatic exercise programs (49.2 percent); holidays and other special events (43.1 percent); educational programs (40 percent); sport-specific training such as golf lessons or tennis instruction (30.8 percent); and therapeutic programs (27.7 percent).
Programming types that saw growth from 2017 to 2018 include: fitness programs (up from 90.7 percent); mind-body balance (up from 80 percent); personal training (up from 81.3 percent); nutrition and diet counseling (up from 60 percent); and active older adult programming (up from 53.3 percent). Programs that did not appear among the top 10 most common programs in 2017 include educational programs and therapeutic programs. They replace swimming programs and day camps and summer camps.
The percentage of health club respondents who plan to add programs at their facilities fell from 32.9 percent in 2017 to 30.3 percent in 2018. This compares with 31.8 percent of non-health-club respondents who are planning to add programs at their facilities.
The most commonly planned program additions among health club respondents include:
- Programs for active older adults (up from No. 6)
- Teen programming (up from No. 4)
- Nutrition and diet counseling (down from No. 2)
- Fitness programs (down from No. 3)
- Mind-body balance programs (no change from 2017)
- Sport-specific training (did not appear in 2017)
- Personal training (up from No. 9)
- Educational programs (down from No. 7)
- Adult sports teams (did not appear in 2017)
- Individual sports activities such as running or swim clubs (down from No. 1)
New to the list in 2018 are programs for sport-specific training and adult sports teams. These programs replace special needs programs and swimming programs.