Trends in Health, Fitness & Sports Clubs
A Look at Trends in Health, Fitness & Sports Clubs
Over the next few pages, we'll dig into the trends reported by health club respondents to the Industry Report survey, which includes not just health clubs, but also sports clubs, fitness clubs and medical fitness facilities. These respondents made up 5.7% of the survey population in 2022.
Health club respondents were most likely to be located in the West and Midwest regions of the United States. Some 37.9% said they were in the Western states, and 29% were located in the Midwest. Another 12.9% were from the Northeast, and 12.9% were from the South Central region, while 9.7% of health club respondents made their home in the South Atlantic region.
Nearly half (48.4%) of health club respondents were in suburban communities, while nearly one-third (32.3%) were found in urban areas, and nearly a fifth (19.4%) were in rural areas.
On average, health club respondents said they reach a population of 57,560 people, up from 54,070 in 2021. More than two-thirds (68.8%) of health club respondents said they reach a population of 20,000 or fewer people, compared with 52.1% of non-health-club respondents. And while just 9.4% of health club respondents said they reach a population of 100,000 or more, 17.4% of non-health-club respondents reach an audience that size.
A full 96.9% of health club respondents said they were with private organizations. Three-quarters (75%) were with for-profit facilities, while 21.9% said they were with private, nonprofit facilities. Another 3.1% were with an "other" type of organization, not public or governmental.
In 2022, health club respondents said they manage an average of 1.7 individual facilities, down from 2.9 in 2021. Health club respondents were highly likely to report that they manage just a single facility. More than three-quarters (78.1%) of health club respondents said they manage just one facility, compared with 42.6% of non-health-club respondents. On the other hand, while 15% of non-health-club respondents said they manage 10 or more facilities, just 3.1% of health club respondents have 10 or more facilities to manage.
Respondents from health clubs were much less likely in 2022 than in 2021 to report that they form partnerships with other organizations. Some 62.5% of health club respondents in 2022 said they form such partnerships, down from 78.4% in 2021. This compares with 83.5% of non-health-club respondents and 88.2% of non-health-club respondents, respectively. The most common partners for health clubs were health care and medical facilities. More than one-third (34.4%) of health club respondents said they had partnered with health care facilities, compared with 15.9% of non-health-club respondents. Other common partners for health clubs were corporate and local businesses (28.1%), local schools (25%), nonprofit organizations (18.8%), and colleges and universities (15.6%).
Health club respondents were far more likely than others to report that their primary audience is made up of adults and seniors. Some 68.8% of health club respondents said adults were their primary audience, compared with 16.3% of non-health-club respondents. And while 6.3% of health club respondents said they primarily reach seniors, just 2.7% of non-health-club respondents named seniors as their primary audience. Another 25% of health club respondents said they primarily reach all ages.
Revenues & Expenditures
Revenues for health club respondents tend to be more volatile than others, which makes sense given their mostly-for-profit nature. In typical years, around half of health club respondents will report that their revenues had increased in the preceding year, with between one-fifth and one-quarter reporting decreases. The pandemic obviously shook this pattern up significantly, and in 2020 nearly three-quarters (73%) of health club respondents saw their revenues decline. Like many businesses, they continued to struggle in 2021, with 41.9% reporting a decrease in revenues, 19.4% indicating that revenues had held steady, and 38.7% reporting an increase. (See Figure 58.)
Health club respondents tend to be optimistic about future revenue prospects, and this year's report supports that trend, with 58.1% expecting revenues to increase in 2022 and 67.9% expecting an increase in 2023. Still, nearly one-fifth (19.4%) of health club respondents are expecting their revenues to fall this year, and 7.1% expect a decrease in 2023.
Health club respondents in 2022 reported a dramatically lower average operating cost than the average for 2021. In 2022, health club respondents had an average operating cost of $490,000, 62.9% lower than the average of $1,320,000 reported in 2021. Looking forward, they expect their costs to grow 26.5% between 2021 and 2023, to an average of $620,000.
Health club respondents in 2022 recovered an average of 71.3% of their operating costs via revenues, down from 76.4% in 2021. More than half (51.6%) of health club respondents said they recovered more than 70% of their operating costs via revenues, compared with 35.7% of non-health-club respondents. And while 16.1% of health club respondents said they earned back 30% or less of their operating cost via revenues, 26.5% of non-health-club respondents had a recovery rate of 30% or less. Another 3.2% of health club respondents said they recovered between 31% and 50% of their costs via revenues, while 6.5% recovered between 51% and 70% of their costs.
Not surprisingly, when asked about their revenue sources, health club respondents overwhelmingly named membership and admission fees. In fact, 90.3% of health club respondents said membership and admission fees were a source of funding for their facilities, compared with 60.4% of non-health-club respondents. The next most common source of funding for health clubs was facility rentals and private events, though only 35.5% named this as a source of funding for their facilities. (See Figure 59.)
Continuing last year's bucking of the trend, health club respondents in 2022 were again slightly more likely than non-health-club respondents to report that they had taken action to reduce their operating expenditures. (Health clubs usually are less likely to have taken such action than their peers.) Some 86.7% of health club respondents said they had acted to reduce their expenses, compared with 84% of non-health-club respondents. This is down slightly, as 91.9% of heath club respondents had taken such action in 2021.
The most common measure health club respondents had taken to reduce their costs was reducing staff. More than half (53.3%) of health club respondents said they had reduced staff. Another 43.3% said they had reduced their hours of operation, or cut programming and services. And 30% said they had increased fees, or improved energy efficiency.
Health Club Facilities
The pandemic had an obvious and dramatic impact on health clubs in terms of revenues, as shown, as well as facility usage. Three-quarters (75%) of health club respondents said the number of people using their facilities dropped in 2020, and 46.9% reported a decrease in 2021. At the same time, 2021 began to show some signs of recovery, with 43.8% of health club respondents indicating the number of people using their facilities had increased. (See Figure 60.)
Health club respondents were relatively optimistic about 2022 and 2023. Some 64.5% of health club respondents said they expected to see an increase in usage in 2022, and 74.1% expect an increase in 2023. At the same time, the number of health club respondents expecting usage of their facilities to drop fell to 19.4% for 2022 and 7.4% for 2023.
Health club respondents are generally among the least likely to be planning construction, and in 2022, the smallest number of health club respondents had construction plans than in most other years of the survey. Just half (50%) of health club respondents in 2022 said they are planning construction over the next few years, down from 51.4% in 2021. This compares with 71.8% of non-health-club respondents in 2022 who have construction plans. Just under a third (31.3%) of health club respondents said they were planning renovations to their existing facilities, while 25% were planning additions. And just 9.4% said they had plans to build new facilities. (See Figure 61.)
Health club respondents in 2022 were planning to spend an average of $1,980,000 on their construction plans, a 38.1% decrease from 2021, when they were planning to spend $3,200,000. That said, it is still 78.4% higher than the average for 2020 of $1,110,000.
The features most commonly included among health care respondents' facilities in 2022 include: fitness centers, locker rooms, exercise studio rooms, Wi-Fi services, indoor courts for sports like basketball and volleyball, indoor aquatic facilities, childcare centers, classrooms and meeting rooms, indoor tracks, and outdoor sports courts and outdoor aquatic facilities.
As is generally the case, health club respondents were much less likely than their peers from other facilities to indicate that they had plans to add features at their facilities. Some 18.8% of health club respondents in 2022 said they would be adding features at their facilities, down from 21.6% in 2021. This compares with 40.3% of non-health-club respondents in 2022 (and 37.5% in 2021) who had plans to add features at their facilities.
The features health club respondents were most likely to be adding include exercise studio rooms, ropes courses or challenge courses, fitness centers, fitness trails and outdoor fitness equipment, outdoor sports courts, locker rooms, Wi-Fi services, outdoor aquatic facilities, or childcare centers.
Programming is central to most health club operations, driving new memberships and helping existing members engage with one another, keeping them coming back to the facility again and again. And indeed, a full 100% of health club respondents said they provide programming of some kind at their facilities.
The 10 most commonly offered programs at health club respondents' facilities in 2022 include: fitness programs (provided by 90.6% of health club respondents), functional fitness (84.4%), group exercise programs (75%), personal training (75%), mind-body balance programs like yoga (59.4%), nutrition and diet counseling (56.3%), programs for active older adults (37.5%), aquatic exercise programs (37.5%), holiday events and other special events (34.4%), and therapeutic programs (28.1%).
The only program offered by more health club respondents in 2022 than in 2021 was functional fitness, which increased by 11.4 percentage points, from 73% in 2021.
Just 21.9% of health club respondents in 2022 said they were planning to add programs at their facilities over the next three years. This is down from 32.4% in 2021 and 29.7% in 2020, and compared with 36.5% of non-health-club respondents in 2022 who had plans to add programs at their facilities.
The most commonly planned program additions for health club respondents were:
- Mind-body balance programs like yoga (up from No. 10)
- Swimming programs (was not among top planned programs in 2021)
- Fitness programs (up from No. 9)
- Functional fitness programs (down from No. 3)
- Programs for active older adults (no change)
- Special needs programs (did not appear in 2021)
- Nutrition and diet counseling (down from No. 2)
- Individual sports activities like swimming and running clubs (did not appear in 2021)
- Therapeutic programs (down from No. 7)
- Group exercise programs (down from No. 8)
Asked about the top concerns and issues for their facilities, health club respondents were most likely to name staffing issues as their top concern, but they were much less likely to be concerned about staffing than other survey respondents. Some 51.6% of health club respondents said staffing issues were a top concern, compared with 64.8% of non-health-club respondents. Health club respondents were also more likely than non-health-club respondents to name marketing and increasing participation (41.9% vs. 36.2%), general fitness and wellness (41.9% vs. 23.5%), and older adult fitness and wellness (25.8% vs. 11.9%) among the top issues facing their facilities. RM