BY MI C H AE L SC OT T S C U D D E R
FORECASTING THE NEXT 5 YEARS IN THE FITNESS INDUSTRY
AN INDUSTRY EXPERT EXAMINES HOW TODAY’S SOCIOECONOMIC CLIMATE WILL AFFECT TOMORROW’S BUSINESS OUTLOOK.
Someone once said that predicting the future is easy; it’s understanding the present that’s so difficult! That said, I’m still going to attempt to make some predictions about what the next 5 years may bring for the health and fitness business, based on what is happening now. Also included are proactive strategies that fitness operators can implement to respond to these influences.
July-August 2002 IDEA HEALTH & FITNESS SOURCE
Good News, Bad News
GOOD NEWS, BAD NEWS
As this article goes to press in the late spring of 2002, our maturing industry seems to be in a state of flux. The U.S. economy has been through a 2-year wringer, our lifestyles have become more hectic, and our belief in the invulnerability of our nation has been mightily challenged. The good news is that the health and fitness business continues to grow; last year’s membership numbers edged up 3 percent to a new record of 33.8 million and the number of clubs increased by a few hundred to just under 18,000 facilities, according to recent figures released by the International Health, Racquet & Sportsclub Association (IHRSA). The bad news is that the national club membership attrition rate still hovers at the 40 percent mark, profit margins are diminishing and, despite our best efforts, the number of Americans who belong to a health club remains a dismal 12 percent. The fitness industry has enjoyed an unprecedented decadelong upward trend in facility growth and membership sales, accompanied by diversification into profit-center areas, such as personal training, specialized group fitness modalities and food-and-beverage operations. However, we have also lost many experienced fitness professionals to other fields, largely because we lag far behind other industries in terms of pay rates, benefits and career path opportunities. As people from different demographics flock to our clubs (witness the growth of the 40-plus market in our membership rolls), the industry is grappling with high employee turnover, poor staff training and a lack of systematic approaches to management. Clubs everywhere are dealing with high capital costs, growing service expenses and inadequate pricing, while trying to stay competitive in a marketplace replete with consolidations and acquisitions by the larger “chain” or multiclub players.
Lack of Leisure Time
Over the past decade, the majority of American workers found themselves spending more time on the job; this was particularly true of adults in the 30 to 55 age group. As the cost of living soared everywhere, more and more families came to rely on two paychecks to make expenses meet. If these trends continue, leisure time will probably decrease even more. This, in turn, could cause a slowdown in the growth of club memberships as workers scramble to find free time for their families and other obligations. Lack of leisure time could also affect some of the services fitness businesses offer, such as personal training. Proactive Strategies. Here are some ways fitness facility managers can respond to the lack of leisure time:
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