Health, Fitness & Sports Clubs

A Look at Trends in Health, Fitness & Sports Clubs

PHOTO COURTESY OF MYERS ANDERSON ARCHITECTS

 

According to the International Health, Racquet & Sportsclub Association (IHRSA), more than 180,000 clubs worldwide were home to 144.7 million members, earning $84 billion in revenue in 2014. The top market globally was the United States, where 54 million members belonged to a club, and revenues were $24.2 billion.

 

The ongoing strengthening of the health club market should come as no surprise. Americans rely on health clubs to connect them with fun and effective fitness offerings, from simple cardio workouts using treadmills, stationary bikes and elliptical trainers to circuit workouts with weights, group fitness, personal training and so much more.

Health club operators know that providing creative programming and innovative fitness opportunities is a key to successful business, which is all about attracting new members and retaining existing ones. And, fitness equipment manufacturers help serve this need by coming up with new ways to work out.

While the general survey population was most likely to be from the Midwest, health club respondents were largely located in the West and Northeast. Some 34.9 percent of health club respondents said they were located in the West, while 23.8 percent were in the Northeast. Smaller numbers were located in the Midwest (19 percent), South Atlantic region (12.7 percent) and South Central region (9.5 percent).

More than half (55.6 percent) of health club respondents said they were located in suburban communities. Another 27 percent were found in rural areas, and 17.5 percent were located in urban communities.

On average, health club respondents said they serve a population of 62,900 people. More than half (54.7 percent) of health club respondents said they reached a population of 20,000 or fewer people, compared with 46.4 percent of non-health-club respondents. At the same time, 14.1 percent of health club respondents said they reached a population of 100,000 or more people, compared with 19.6 percent of non-health-club respondents.

Health club respondents were most likely to be with private, for-profit facilities. Some 64.1 percent said they were for-profit. Another 20.3 percent reported from public organizations, and 15.6 percent said they worked for private, nonprofit organizations.

Respondents from health clubs managed an average of 2.3 facilities. They were far more likely than non-health-club respondents to report that they managed just a single facility. Some 76.6 percent of health club respondents manage only one facility, compared with 34.7 percent of non-health-club respondents.

Respondents from health clubs are among the least likely to report that they form partnerships with other organizations, though a majority do so. While 71.4 percent of health club respondents said they partner with outside organizations, 89.9 percent of non-health-club respondents form such partnerships. The most common partners for health club respondents include: corporate or local businesses (44.4 percent of health club respondents partner with them); local schools (33.3 percent); healthcare or medical facilities (27 percent); local government (23.8 percent); and colleges and universities (20.6 percent).

Health club respondents were much more likely than others to report that their primary audience was made up of adults age 19 to 64. Some 56.3 percent of health club respondents said they primarily reached adults, compared with 16.5 percent of non-health-club respondents. Health club respondents were also slightly more likely to serve seniors 65 and older, with 7.8 percent naming this as their main audience. This compares with just 2.6 percent of non-health-club respondents who said that seniors were their primary audience. The remainder of health club respondents said their primary audience was made up of children ages 4 to 12 (1.6 percent), college students (1.6 percent), or teens ages 13 to 18 (1.6 percent).

Revenues & Expenditures

Slightly more health club respondents reported an increase in revenues in 2015 than in 2014, but at the same time, a larger percentage also reported a decrease in revenues. While 45.2 percent said their revenues increased from 2013 to 2014, nearly half (48.4 percent) reported an increase from 2014 to 2015. At the same time, while 17.8 percent said their revenues fell from 2013 to 2014, nearly a quarter (24.2 percent) reported a drop in revenues from 2014 to 2015. (See Figure 53.)

Looking forward, health club respondents are, as is generally the case, very optimistic about their future revenue growth. Some 78.3 percent said they expect revenues to increase from 2015 to 2016, while 80.7 percent projected an increase in revenues from 2016 to 2017.

When it comes to operating expenses, those from health clubs were among the only respondents who reported an increase from 2014 to 2015. While the general survey population reported a decrease of 2.6 percent to operating expenditures in that time period, health club respondents saw a 39.8 percent increase, from an average of $961,000 in 2014 to $1,343,000 in 2015. Looking forward, however, health club respondents are among the only ones expecting operating expenses to fall from 2015 to 2017. While the general survey population projected a 5.8 increase in operating expenditures in that time frame, health club respondents are expecting an 8.6 percent drop, to an average of $1,228,000 in 2016.

On average, health club respondents report that they recover 67 percent of their operating costs via revenue. This compares with 49.6 percent of operating costs recovered via revenue for all respondents. Reflecting the largely for-profit nature of this audience, health club respondents were far more likely than others to report that they earned 91 to 100 percent of their operating costs back via revenue. While just 16.3 percent of non-health-club respondents said they earned between 91 and 100 percent of their operating costs back via revenue, for health club respondents, 43.5 percent recover at least 91 percent of their operating costs via revenues. Some 17.7 percent health club respondents said they earn less than 30 percent of their costs back via revenues. Another 11.3 percent earn between 31 and 50 percent of their operating costs via revenues, and 8.1 percent earn 51 to 70 percent of their costs back. More than half (53.2 percent) of health club respondents said they earn 71 percent or more of their operating costs via revenue.

Health club respondents were slightly more likely than others to report that they had taken actions to reduce operating expenditures at their facilities. While 83.4 percent of non-health-club respondents said they had taken such action, 87.1 percent of health club respondents said they had taken action to reduce operating costs. The most common actions they had taken include: improving energy efficiency (56.5 percent); reducing staff (40.3 percent); increasing fees (37.1 percent); and putting construction or renovation plans on hold (19.4 percent).

Health Club Facilities

A growing number of health club respondents are reporting that the number of people using their facilities is increasing year-over-year. While 47.9 percent of health club respondents said that membership had risen from 2013 to 2014, 51.6 percent reported an increase from 2014 to 2015. At the same time, however, the number of respondents who reported a decrease in membership also grew, from 15.1 percent reporting a decrease from 2013 to 2014 to 19.4 percent reporting a decrease from 2014 to 2015. (See Figure 54.)

 

Looking forward, health club respondents are optimistic about membership increases, as is generally the case with this portion of the survey population. Some 68.9 percent of health club respondents said they expect to see utilization of their facilities increase from 2015 to 2016, and 77.8 percent expect an increase from 2016 to 2017.

 

After reporting a significant decrease in the percentage of health club respondents who said they were planning construction last year, this year saw a slight increase in the number who plan to build. In 2015, 54.1 percent of health club respondents were planning construction, down from 69 percent in 2014. This year, 56.2 percent of these respondents said they are planning construction, with 43.8 percent planning to renovate their existing facilities, 20.3 percent planning additions, and 14.1 percent planning to build new facilities. (See Figure 55.)

 

Health club respondents in 2016 are planning to spend an average of $2,500,000 on their construction plans, 29 percent less than the average for all respondents. That said, health club respondents were the only group to report that their budgets for construction had increased from 2015 to 2016. While the average construction budget for all respondents fell by 12.5 percent from 2015 to 2016, health club respondents saw a 55.8 percent increase, from an average of $1,605,000 in 2015 to $2,500,000 in 2016.

 

The features most commonly included among health club respondents' facilities in 2016 include: fitness centers; exercise studio rooms; locker rooms; Wi-Fi services; indoor aquatic facilities; indoor courts for sports like basketball, volleyball and racquetball; childcare centers; concessions; outdoor aquatic facilities; and classrooms and meeting rooms.

The percentage of health club respondents who said they had plans to add features at their facilities over the next three years dropped from 27 percent in 2015 to just 15.6 percent in 2016. This compares with 43.6 percent of non-health-club respondents who have plans to add features in 2016.

Programming

Creative and effective programming is one of the keys to successful business for health club operators. That means continually refreshing the programming offered to be sure members are satisfied and excited to come back for more.

The top 10 programs currently offered among health club respondents' facilities include: fitness programs (provided by 89.1 percent of health club respondents); mind-body balance such as yoga and tai chi (81.3 percent); personal training (81.3 percent); programming for active older adults (59.4 percent); nutrition and diet counseling (53.1 percent); aquatic exercise programs (50 percent); holidays and other special events (46.9 percent); swimming programs (45.3 percent); individual sports activities such as running clubs or swim clubs (42.2 percent); and sport-specific training such as golf lessons or tennis instruction (39.1 percent).

Programming types that saw growth from 2015 to 2016 include: nutrition and diet counseling (up 7.2 percent); swimming programs (up 6.1 percent); and active older adults programs (up 4 percent).

The percentage of health club respondents who plan to add programming at their facilities grew from 23 percent in 2015 to 28.1 percent in 2016. This compares with 31.1 percent of non-health-club respondents who are planning to add programming at their facilities.

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

  1. Educational programs (did not appear in 2015)
  2. Individual sports activities such as running or swim clubs (no change from 2015)
  3. Nutrition and diet counseling (up from No. 6)
  4. Fitness programs (down from No. 3)
  5. Sports tournaments and races (did not appear in 2015)
  6. Mind-body balance programs such as yoga and tai chi (down from No. 1)
  7. Active older adult programs (did not appear in 2015)
  8. Personal training (up from No. 9)
  9. Special needs programs (down from No. 7)
  10. Daycare or preschool programs (down from No. 8)