How is the Industry Doing—Really?
In the u.S. and
Canada, revenues
totaled $21.2 billion
for more than 33,000
commercial and
nonprofit facilities.
urban markets, reported $507 mil- considering the surrounding economy. revenues having increased from $4.17
lion in revenues for 2008, a growth Business owners and entrepreneurs million to $4.32 million per club. Non-
of 7% from 2007. Town Sports Inter- contended with limited credit for cap- dues revenue also improved by 0.5%,
national (TSI) had 164 club locations ital expenditures and a consumer as revenue per individual member
and over 500,000 members in 2008. populace reluctant to spend their lim- increased by roughly 5%, from $761.84
First and second quarter earnings ited discretionary income. Rising to $801.76. Having proactively
for 2009 exceed $250 million. unemployment rates and decreased employed cost-management initia-
Health Fitness (AMEX: FIT), a pub- employee salaries and wages posed a tives, respondents, overall, reported a
licly traded club company offering challenge for a lucrative health club median EBITDA of 18.2%, up 0.9%
corporate fitness programs and man- industry that has historically engaged from 2007. The ability of strong clubs
agement, generated $78 million in affluent consumers. Legislative discus- to increase revenue and control costs
2008, representing 11% growth from sion on healthcare reform provided attests to the resilience of the industry
2007. With over 300 corporate clients,
the industry with a unique opportunity
in a downtrodden economy.
this club company served 225,000
and challenge to attract consumers in
members in 2007. For the first and sec-
need of physical activity. Participating Industry
ond quarters of 2009, Health Fitness
Despite these challenges, IHRSA’s data Survey Clubs
reported revenues of $38 million.
2009 Industry Data Survey respon- Report Increased
dents, overall, posted solid growth and Membership overall
Slow, but Positive, Growth club performance. From 2007 to 2008, Member retention is one of the pri-
The year 2008 proved to be a challeng- participating clubs reported revenue mary goals of a health club, especially
ing one for the business marketplace, growth of 2.6%, with median total when new-member acquisition may
be particularly challenging. This year’s
sample of responding clubs managed
to attain solid retention rates, at 72.4%
for all clubs, and attract new mem-
bers, indicated by a net membership
growth of 4.2% for 2008. This year’s
sample outperformed respondents,
overall, to the 2008 Industry Data Sur-
vey in this regard, as all clubs reported
a median 1.9% membership growth
from 2006 to 2007. Furthermore, the
annual account-replacement ration
for this year’s respondents ranked
higher than last year’s sample, at 1.61
versus 1.29. Hence, this year’s sample
added 161 accounts for every 100
cancelled accounts. —|
70
Club Business International | MARCH 2010 | www.ihrsa.org
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