| News & Know How | First Person
CBI Spends 10 Minutes on the Line with
Pedro Videla
W
hat insights do you have to offer about the economic
downturn and when it’s expected to recover? In the
meantime, how can health clubs make themselves
recession-resilient? What’s the best thing that operators
can do for employees and members, right now, that
will leave a lasting impression? What are the hidden
opportunities in this recession?
Pedro Videla holds their looks, they will view their membership dues
an M.A. and a Ph.D. now that as discretionary spending—which tends to be
in economics from the people are wondering how we can best emerge highly cyclical. However, when members see
University of Chicago. from this recession stronger and more competi- clubs as a place to improve their health, they will
He heads the economics tive, I will cover these issues and others when keep their memberships longer, which can help
department and serves I address the 9th Annual IHRSA European
the sector become counter-cyclical.
as associate dean of
“
these are the most challenging times that most
of us can ever remember. Because I k
Congress, October 22-24, in Dublin.
My family, for example, belongs to a high-qual-
the MBA program at
ity, multipurpose club, Egara, in Matadepera,
IESE Business School
While this is not another Great Depression, it is a
Spain. I purchased this membership to provide
in Barcelona.
nasty downturn. the International Monetary Fund
(IMF) predicts that the global gross domestic
an atmosphere for my children where sport is
product (GDP) will decrease by 1.3% this year, the
part of daily life. the club offers tennis, field
first time in 70 years that real GDP has declined
hockey, swimming, fitness, and riding.
worldwide. Predictions are that the recovery will
Right now, clubs should lock in their customers by
begin by the first quarter of 2010. Unfortunately,
offering special services at lower prices, provided
unemployment will continue to increase. the U.S.
they let members know that prices will increase
GDP needs to grow at 2% to 2.5% to stop the
in better times. In this manner, you “finance” their
growth of unemployment.
participation. Some clubs are waiving member-
the U.S. will be the first to emerge with some good
ship fees for unemployed individuals. I would be
news by next year—provided the government
grateful for all my life if someone did that for me
manages the fiscal deficit. With the stimulus pack-
and my family.
age, the government is trying to substitute private
As for your employees, you can lock them in, too,
consumption with government consumption. the
with training that provides a career path. Just be
risk is that this huge increase in government
sure the training is specific to your club, so they
spending may cause interest rates to rise and
don’t take that knowledge to a competitor.
undermine future economic growth. the U.S.
Federal Reserve must work to reduce the risk of
Some of the biggest mistakes that clubs can make:
inflation. And we cannot come out of this with a
First, not to adjust. Second, to overreact. third, not
huge tax burden for the private sector. Small
to realize that recessions are part of the business
and medium-sized firms create the most jobs
cycle… soon, we will be up again. therefore, firms
and wealth.
need to make the necessary changes in order to
create and sustain a competitive advantage when
the current recession is due to a substantial the recovery comes. this, I think, is the single best
decline in private consumption, which makes up recipe for dealing with recessions.
.org
70% of GDP in the U.S., which, in turn, makes up
30% of the world GDP. Such a decline affects the
It has been said that recessions are too important
For information about the to be wasted. I agree.
9th Annual IHRSA European
health club sector, but clubs can influence how it
”
—|
Congress, log on to does so. If people see clubs as a place to improve – Patricia Amend; Pamend@aol.com
www.ihrsa.org/congress.
www.ihrsa.org | OCtOBER 2009 | Club Business International
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