Feature Article - June 2019
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2019 State of the Managed Recreation Industry

A Look at What's Happening in Recreation, Sports and Fitness Facilities

By Emily Tipping

Suburban respondents' revenues were more likely to change in 2018, compared with those from urban and rural areas. Some 45.2 percent of suburban respondents reported an increase in 2018, compared with 41.1 percent of urban respondents, and 39.5 percent of rural respondents. At the same time, while 12.6 percent of suburban respondents said their revenues decreased in 2018, 11.3 percent of urban respondents and 10.9 percent of rural respondents reported a decrease.

Respondents from facilities that were more likely to be private vs. public (i.e., camps, community centers, Ys and health clubs) were more likely than those that lean more toward public organizations (parks, colleges and schools) to report that their revenues had increased from 2017 to 2018. More than half of respondents from camps (54.2 percent), community centers (51.9 percent), Ys (51.5 percent) and health clubs (51.1 percent) said their revenues had increased from 2017 to 2018. This compares with 45.5 percent of parks, 28.5 percent of colleges, and 13 percent of schools. At the same time, respondents from Ys (25 percent), colleges (17.4 percent) and schools (11.5 percent) were more likely than others to report that their revenues had fallen from 2017 to 2018. Interestingly, among health club respondents, there was far less volatility in revenues than is usually seen, with just 6.4 percent reporting a decrease to revenues in 2018 (compared with 21.9 percent reporting a decrease in 2017), possibly reflecting the strengthening economy.

Similarly, looking forward, respondents from Ys, camps, community centers and health clubs were the most optimistic regarding revenue increases in 2019 and 2020, while colleges and schools continued to be more likely to expect revenues to either remain the same or decrease.

From 2018 to 2019, respondents from Ys (63.8 percent), camps (60 percent) and community centers (56.5 percent) were most likely to expect an increase in revenues, compared with just 30.5 percent of colleges and 17.7 percent of schools. From 2019 to 2020, increases in revenues are more likely for respondents from Ys (72.3 percent), camps (69.7 percent) and health clubs (62.5 percent).

After hitting an aberrant high of $2,044,000 in fiscal 2016, the average annual operating expenditure for respondents to the Industry Report survey has risen steadily over the past couple of years, and is expected to continue to increase more gradually. (See Figure 13.) In 2018, respondents saw a 1.1 percent increase to their average operating expenditures, from $1,800,000 in fiscal 2017 to $1,820,000. This represents a 25 percent increase since the average reported in 2012, of $1,456,000.

Looking forward, respondents are expecting their operating expenses to climb by 3.8 percent over the next two years, to an average of $1,830,000 in 2019 and $1,890,000 in 2020.

Respondents from urban communities reported a 13.8 percent increase in their average operating expenses, from $2,100,000 in 2017 to $2,390,000 in 2018. At the same time, rural respondents saw their average cost fall 1.9 percent, from $1,040,000 in 2017 to $1,020,000 in 2018; and suburban respondents reported a 4.9 percent drop, from $2,260,000 in 2017 to $2,150,000 in 2018.

Looking forward, rural respondents are expecting the greatest increase to their average operating expenses over the next two years. From 2018 to 2020, rural respondents said they expect their average operating expenses to grow 4.9 percent, to an average of $1,070,000. They were followed by suburban respondents, who projected a 4.2 percent increase, to $2,240,000. Urban respondents projected a 3.3 percent increase in average operating expenditures from 2018, to $2,470,000 in 2020.

From fiscal 2017 to fiscal 2018, only respondents from the Midwest reported an increase to their average operating expenditures, while all other regions saw a decrease. Among those in the Midwest, average operating expenses increased 33.6 percent, from $1,460,000 in 2017 to $1,950,000 in 2018. The greatest decrease was seen among respondents from the South Atlantic region, reporting a 29.5 percent drop from an average of $2,340,000 in 2017 to $1,650,000 in 2018. They were followed by the Northeast (a 6.7 percent decrease, from $1,350,000 to $1,260,000); the South Central region (a 3.3 percent decline, from $1,830,000 to $1,770,000); and the West (a 2.2 percent decrease, from $2,290,000 to $2,240,000).

Looking forward, every region except the West projected increases to their operating expenses from 2018 to 2020. In the West, respondents projected a 1.3 percent decrease in operating expenses, from an average of $2,240,000 in 2018 to $2,210,000 in 2020. The greatest increase is expected by those in the South Central region, who projected that their expenses would increase 8.5 percent, from $1,770,000 in 2018 to $1,920,000 in 2020. They were followed by those in the South Atlantic region (projecting a 7.3 percent increase, from $1,650,000 to $1,770,000); the Midwest (up 5.1 percent, from $1,950,000 to $2,050,000); and the Northeast (up 4.8 percent, from $1,260,000 to $1,320,000).