Special excerpt:
2009 IHRSA
Profiles of Success
T
he 2009 IHRSA Profiles of continue to attend clubs, participate in membership dues revenue. In com-
Success, from which the club activities, and invest in nondues parison with the fourth quarter of
following excerpt is drawn, programs, indicating the important 2008, participants reported growth
paints a distinctly positive role of exercise for the North Ameri- in total sales, membership dues, and
picture of the industry’s performance can public. nondues revenue, with nondues sales
in 2008. Integrating information from
up by 16.6%. Consecutive quarterly
IHRSA surveys on club operations
Industry at a Glance growth points to the industry’s resil-
and consumer behavior, this report
IHRSA’s Quarterly Index survey of 14 ience in maintaining performance in
demonstrates that clubs—a lingering
leading U.S. health and sports club the midst of an economic downturn.
recession notwithstanding—are con-
companies, representing 183 club
Overall, IHRSA’s Quarterly Index
tinuing to “hang tough.” locations, indicated overall improved
reported steadily improving perfor-
mance over the first six months of
Total revenue for clubs increased by an
2009. When compared to the first
quarter of 2009, IHRSA Index clubs
average of 12.3%, with membership and reported increases in select club per-
nondues revenues improving by 12.2%
formance metrics for the second quar-
ter of 2009. Total revenue increased
and 12.7%, respectively.
by 0.2%, nondues revenues improved
by 2.8%, and EBITDAR soared by
7.0%. Additionally, EBITDAR as a
Resisting the Recession percent of total revenue improved. In
Long thought to be a recession-resilient
performance in 2008. Total revenue
the second quarter of 2009, EBITDAR
industry, North American fitness clubs
for clubs increased by an average of
was 30.7% of total revenue, while
held solid ground in 2008. In the U.S.
12.3%, with membership and non-
first-quarter 2009 EBITDAR was
and Canada, health club revenues
dues revenues improving by 12.2%
26.0% of total revenue.
totaled $21.2 billion for more than
and 12.7%, respectively. Participating
33,000 commercial and nonprofit facil-
clubs also reported an average
Publicly Traded Firms
ities serving over 50 million members.
increase of 9.3% in earnings before
The year 2008 also proved to be a
In the U.S. alone, members attended
interest, taxes, depreciation, amorti-
successful year for publicly trade
their clubs an average of 101.2 days
zation, and rent (EBITDAR) for 2008.
companies within the industry. The
per year, reflecting the industry’s utility
Nonetheless, the first quarter of
three publicly traded health club
in helping consumers “sweat away”
2009 posed challenges for Index
firms also occupy distinctive niches.
concerns and worries about the cur-
participants. Eighteen leading club
Ranking high on IHRSA’s Global 25
rent economic recession.
companies, representing a total of
list, Life Time Fitness (NYSE: LTM)
In spite of the industry’s success in
530 facilities, reported struggling
reported revenue of $770 million in
2008, the club sector, like any other
performance in the first quarter of
2008, an increase of 12% from the
industry, is not entirely recession-
2009 relative to the first quarter of
previous year, 147% from 2004. This
proof. However, solid club-companies
2008. Total sales decreased by 3.6%,
multipurpose, resort-like club com-
led by savvy operators found success
and membership and nondues rev-
pany services more than 500,000
by occupying specific niches and
enue dropped by 1.0% and 8.1%,
memberships through its 81 clubs.
employing sound management strate-
respectively.
Revenue in 2009, combined for the
gies. Business models ranging from In spite of overall wavering perfor- first and second quarters, amounted
national fitness-only multi-chains to mance, select clubs reported improve- to $419 million, on pace to exceed
niche-specific franchises have ments. Most respondents (56%) revenue from last year.
achieved and maintained a healthy reported increases of over 1.0% in Town Sports International Holdings,
bottom line regardless of the economy. total membership accounts, while 33% Inc. (NASDAQ: CLUB), a multi-club
Although cash-strapped, consumers reported similar increases in total chain concentrated in urban and sub-
www.ihrsa.org | MARCH 2010 | Club Business International
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