Trends in Health, Fitness & Sports Clubs

A Look at Trends in Health, Fitness & Sports Clubs

In this section, we'll take a closer look at trends reported by health club respondents, which includes health clubs, sports clubs, fitness clubs and medical fitness facilities. These respondents made up 2.8% of the survey population in 2020.

Respondents from health clubs were fairly spread out across the country, with nearly one-quarter (24.3%) reporting from the Western region. More than one-fifth were from the Northeast (21.6%), and the same number (21.6%) were from the Midwest. Fewer health club respondents were located in either the South Atlantic (18.9%) and South Central (13.5%) regions.

Respondents from health clubs were most likely to be located in suburban communities. More than four in 10 (45.9%) said they were in the suburbs. Another 29.7% were located in urban communities, and 24.3% were found in rural areas.

On average, health club respondents said they reach a population of 42,970 people. Nearly six in 10 (59.5%) health club respondents said they reach a population of 20,000 or fewer, compared with 43.4% of non-health-club respondents. On the other end of the spectrum, 18.9% of health club respondents reach a population of 100,000 or more, compared with 23.9% of non-health-club respondents.

More than half (51.4%) of health club respondents said they were with private, for-profit organizations. Nearly another quarter (24.3%) were with private nonprofit organizations. Some 21.6% said they were with public organizations, and 2.7% were with "other" types of organizations.

Health club respondents in 2020 manage an average of 2 facilities, down from 4.7 in 2019. They were much more likely than non-health-club respondents to report that they manage just a single facility. Some 69.4% of health club respondents said they manage just one facility, compared with 30.5% of non-health-club respondents. Conversely, while 2.8% of health club respondents said they manage 10 or more facilities, nearly one-fifth (19.9%) of non-health-club respondents said they have 10 or more facilities to manage.

Health club respondents were the least likely to report that they form partnerships with other organizations, though a majority of them do so. Some 70.3% of health club respondents said they partner with outside organizations (down from 77.1% in 2019). This compares with 97.2% of non-health-club respondents. The most common partners for health club respondents include: health care and medical facilities (32.4% of health club respondents had partnered with them); corporate and local businesses (29.7%); colleges and universities (29.7%); local schools (27%); and local government (27%).

Respondents from health clubs were far more likely than others to report that their primary audience is made up of adults. Some 72.2% of health club respondents said adults were their primary audience, compared with just 16.7% of non-health-club respondents. Another 16.7% of health club respondents said they reach all ages, while 8.3% primarily serve seniors, and 2.8% primarily serve college students.

Revenues & Expenditures

Over the past several years, health club respondents have seen more volatility in their revenues than other respondents to the Industry Report Survey, and this year was no exception. After reporting steady or increasing revenues from 2017 to 2018, respondents in 2020 were more likely to report that revenues had fallen again in 2019. From 2018 to 2019, nearly half (48.6%) of health club respondents said revenues had increased, while 27% said there had been no change, and nearly a quarter (24.3%) said revenues had fallen. (See Figure 53.)

In January 2020, health club respondents were relatively optimistic about their prospects for the year, with 58.3% projecting revenues to increase, 30.6% expecting no change, and 11.1% expecting a decrease.

The COVID-19 Update Survey taken in May paints a stark picture for these respondents, with 100% indicating that they now expect 2020 revenues to drop from 2019. More than half (56.5%) of health club respondents expect their revenues to drop by 30 to 40% in 2020, while 4.3% expect a smaller decline of 10 to 20%. Nearly four in 10 (39.1%) health club respondents said they expect revenues to decline by at least 50% in 2020.

From 2019 to 2020, health club respondents reported a 20.8% decrease to their average operating costs, from $1,680,000 in 2018 to $1,330,000 in 2019. Looking forward, health club respondents projected a further decrease of 3.8%, falling to an average of $1,250,000 in 2020 before increasing again in 2021 to an average of $1,280,000.

On average, health club respondents in 2020 reported that they recover 71.3% of their operating costs via revenues, up from 69.4% in 2019. Health club respondents were much more likely to report that they recover at least 91% of their operating costs via revenues. While just 18% of non-health-club respondents said they earn back at least 91% of their operating costs via revenues, some 43.2% of health club respondents do so. Some 13.5% of health club respondents said they recover 30% or less via revenues, while 10.8% recover 31 to 50%, and 2.7% recover 51 to 70%. More than half (51.4%) of health club respondents said they earn back at least 71% of their operating costs via revenues, up from 48.9% in 2019.

Health club respondents were just slightly less likely than their counterparts to report that they had taken action to reduce their operating expenditures. Some 81.1% of health club respondents said they had taken such measures (up from 78.7% in 2019), compared with 81.2% of non-health-club respondents. The most common actions taken by health club respondents to reduce expenses include: increasing fees (45.9% of health club respondents had done so); reducing staff (45.9%); improving energy efficiency (40.5%); putting construction and renovation plans on hold (27%); and cutting programs or services (21.6%).

Health Club Facilities

For the most part, health club respondents saw either an increase in memberships or held steady from 2018 to 2019. Some 48.6% said usage of their facilities had increased in that time, while 40.5% reported no change. Another 10.8% said the number of people using their facilities had fallen, but this is an improvement over the past two years. (See Figure 54.)

Looking forward, health club respondents grow more optimistic, with 44.1% projecting an increase in the number of people using their facilities in 2020, and nearly two-thirds (65.6%) anticipating an increase in 2021.

Health club respondents were less likely to be planning construction than other respondents in 2020. Some 59.5% of health club respondents said they had plans for construction, compared with 73.3% of non-health-club respondents. Nearly half (48.6%) of health club respondents said they would be renovating their existing facilities. Another 13.5% said they planned to build new facilities, and 13.5% were planning additions to their existing facilities. (See Figure 55.)

In 2020, health club respondents were planning to spend an average of $1,110,000 on their construction plans. That's 68% lower than the average amount planned by respondents in 2019, $3,470,000.

The features most commonly included among health club respondents' facilities in 2020 include: fitness centers; locker rooms; exercise studio rooms; Wi-Fi services; classrooms and meeting rooms; childcare centers; indoor tracks for running and walking; indoor aquatic facilities; indoor courts for sports like basketball and volleyball; and concession areas.

Health club respondents were far less likely to report that they had plans to add features at their facilities. While 44.2% of non-health-club respondents had such plans, just 13.5% of health club respondents said they were planning to add features, down from 20.8% in 2019.

Those with plans to make additions at their facilities said they would be adding fitness centers, splash play areas, park restroom structures, Wi-Fi services, and concession areas.

Programming

Offering innovative and effective programs is crucial to the health club business, helping drive new memberships while keeping existing members engaged.

The top 10 programs offered in 2020 at health club respondents' facilities include: fitness programs (provided by 91.9% of health club respondents); group exercise programs (89.2%); functional fitness programs (78.4%); personal training (78.4%); mind-body balance programs like yoga and tai chi (73%); nutrition and diet counseling (62.2%); programs for active older adults (54.1%); educational programs (40.5%); holidays and other special events (37.8%); and aquatic exercise programs (35.1%).

Programming types that saw growth from 2019 to 2020 include: group exercise (up from 83.3%); functional fitness (up from 75%); and nutrition and diet counseling (up from 52.1%).

The number of health club respondents in 2020 who said they were planning to add programs at their facilities was up slightly. Some 29.7% of health club respondents said they had such plans, up from 27.1% in 2019. This compares with 35.3% of non-health-club respondents in 2020 who were planning to add programs at their facilities.

The most commonly planned program additions among health club respondents were:

1. Special needs programs (did not appear in 2019)
2. Functional fitness programs (did not appear in 2019)
3. Fitness programs (up from No. 5)
4. Group exercise programs (no change)
5. Mind-body balance programs like yoga (did not appear in 2019)
6. Programs for active older adults (down from No. 3)
7. Swimming programs (did not appear in 2019)
8. Nutrition and diet counseling (down from No. 2)
9. Aquatic exercise programs (down from No. 8)
10. Personal training (no change)

New to the list in 2020 are: special needs programs; functional fitness; mind-body balance; and swimming programs. These programs replaced holidays and other special events; day camps and summer camps; sports tournaments and races; and youth sports teams. RM