| CBI Interview |
economic climate, do you think we’ll see much in the way of mergers and acquisitions over the next few years?
MN: Yes. The larger firms will probably increase their market share through acquisitions. However, smaller compa- nies will continue to enter the industry, which will tend to offset the consolidation by larger companies.
CBI: Finally, if you were to com- pare the club industry with others that you’re familiar with, how would you rate its attractiveness as an investment—on a scale, say, of 1 to 10, with 10 being the most attractive?
MN: While it’s difficult to rate this indus- try’s appeal to investors, we do look at investment risk. To calculate the overall risk score, IBISWorld assesses the risk tied to industry structure (structural risk), expected future performance (growth risk), and economic forces (sensitivity risk). Risk scores are based on a scale of 1 to 9, where 1 represents the lowest risk score, and 9 the highest. We’ve assigned this industry an
overall risk score of 3.92 out of 9. We’ve also forecast overall risk in
the sector to be low through the end of 2012. The primary positive factors affecting this industry are low revenue volatility and a growing contribution to the U.S. economy. This year, risk, over- all, will decline from the medium-low level seen in 2011 because of favorable movements in per capita disposable income in the U.S.
CBI: One more question, strictly out of curiosity. Would you, personally, regard a health club as an attractive investment opportunity?
MN: I’m not in the position to say whether or not clubs are a good investment—that’s not my field. However, what I can emphasize is that they’ve seen year-over-year growth, and have a strong outlook based on the continued trend of consumer health-consciousness, especially
ihrsa.org | APRIL 2012 | Club Business Internat ional 37
among the baby boomers, who are likely to boost the demand for clubs over the next four years. Overall, there’s a very positive “take-
away” for IHRSA members in the Gym, Health & Fitness Clubs in the U.S. report. Its tagline sums it up quite succinctly: “Working out: Operators will remain resilient as demand from health- conscious consumers grows.” —|
– Jon Feld,
jfeld@inc.com CLUB DATA DOWNLOAD
For additional statistics, analysis, and insights on the health and fitness club industry, visit
ihrsa.org/research. Available resources include the quarterly IHRSA Trend Report on club consumer behavior; the annual IHRSA Health Club Consumer Report; and IHRSA’s annual Profiles of Success publication. —|
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