» Canadian Forum

Looking Ahead

downturn means that my crystal ball is only as good as the next guy’s. But, hopefully my thoughts on potential responses to eco- nomic shifts caused by this storm will help you come out of this on as firm a footing as possible.

R

On the plus side…

• The fitness industry has historically been recession resistant,

experiencing increases in the number of members and gross rev- enues – albeit somewhat muted – during the recessions of the 80s and 90s. • The average income of fitness members

tends to be above the national average. The eco- nomic crisis may have less effect on this segment of population. • Over the past decade, the number of “core

members” (100+ facility visits per year) has steadily risen. This indicates that the proportion of customers who are truly connected to our fa- cilities has a demonstrated pattern of growth. • Industry-wide member retention has been

John Frittenburg

improving for some time. • Non-dues revenue as a proportion of gross in-

come has been steadily climbing indicating that facility patrons are taking advantage of value-added services in the club (like per- sonal training) or spending money in the club’s pro shop, restau- rant, spa, etc.

On the negative side…

• This is not the recession of the 80s and 90s. It is already worse

in many ways and is not expected to get better soon. • While the number of fitness facilities grew over 2006/07, the

total number of club members was relatively flat, possibly indicat- ing that the industry’s historical strength was beginning to wob- ble before the economy tanked. • Money magazine reports that 52% of the people it polled

would be willing to give up their gym memberships to save money. • Checkfree reports that it has observed a 5% decline in mem-

bership sales in the United States in 2008, a 20% increase in non- renewals and a decline of 15% in non-dues revenue.

What the experts are saying…

• There seems to be consensus that people will reduce large pur-

chases and become more conservative in their spending. • Although people still have to eat, it is likely that they will re-

place restaurant dinners with more in-home dining. A recent Ipsos-Reid polls suggests that three out of four Ontarians has al- ready altered dining out habits to save money (either staying home or choosing less expensive restaurants). • “Trading down” will be popular especially in the area of fashion, where costly, high end items will be replaced with good

54 Fitness Business Canada May/June 2009

looking yet inexpensive alternatives. • Large and lavish vacations will likely be replaced with

less-costly affairs and, where possible, people will limit their driving.

BY JOHN FRITTENBURG

ecently, I was asked about the impact that the world- wide economy is likely to have on the fitness industry. I should begin by mentioning that although I have been consulting to the fitness, sport and recreation industry for the past 30 years, the unprecedented nature of this

But they’re also saying…

• Most people will protect their small indulgences – the “lip-

stick effect” – treating themselves to little luxuries to make themselves feel better and more comfortable. • People will buy justifiable items – things that they need,

can’t do without or that have become part of their way of life. • People will continue to do things that are relatively easy,

inexpensive and not too time consuming. Several economic pundits suggest that this economic crisis

is likely to forever change the way many industries do busi- ness. Some even suggest that it would be foolhardy to expect to return to the pre-recession status quo. The gurus on The Business News Network suggest that the bright lights will take this opportunity to retool their business models to survive in the short term and position themselves to be top performers once things turn around. I think that this sentiment holds true for our industry. It is

quite likely that our focus and the manner in which we pack- age and promote our services will be redefined. I would not be surprised if the industry moved from concentrating on the health and wellness of customers to a far more holistic and comprehensive concern for their overall wellbeing. This sort of shift could create new service prospects, produce partnerships with a broader range of disciplines and present opportunities to test the market potential of a host of new products and services. I feel safe in predicting that there will be club casualties

during this recession. But, these failures will likely be caused by what operators did in the years leading up to the down- turn rather than their inability to adjust to changing economic conditions.

Where to from here?

• Keep a positive atmosphere in your facility. The last thing

your customers need is to be greeted by a doom and gloom re- ceptionist worried that her job is in jeopardy. • If you’re the manager or owner, be highly visible. These

times call for the concept of “management by walking around” to be ratcheted up several notches. • Frequently communicate and listen to your staff because

they will be the best barometers of what’s going on in your fa- cility. Also, keep them in the loop to reduce the chance of un- founded rumours about cutbacks, etc. • Strengthen your internal marketing initiatives paying par-

ticular attention to the non-core users. • If you don’t already have some sort of stress relief com-

ponent as part of your wellness program, create one. If you do have one, add to it and make in front and centre in your inter- nal and external promotional efforts. • Look for ways to contain costs without compromising cus-

tomer service. Multi tasking staff responsibilities is one good method of achieving this. • Take a page out of Richard Florida’s book Who's Your City?

and help your staff inject creativity into their jobs to help them become contributors to your success. FBC

John Frittenburg is president of The JF Group, a nationally recognized con- sulting firm specializing in fitness, sport, and recreation. John’s expertise includes facility management and operations, partnerships, marketing, customer service and organizational effectiveness. For over 30 years, the company has served a host of clients in the private, public and not-for-profit

sectors throughout North America. Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56