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dollars from non-dues related services, i.e. personal train- ing, Pilates, nutritional counseling, spa services, etc. Not only does non-dues revenue contribute to the bottom line, it historically has been linked to higher member reten- tion. “The more they pay, the longer they stay” has been a longtime industry axiom. It is not uncommon for clubs within the industry to post membership attrition rates of 40%-50% in a given year, the fact that the clubs from this study keep seven out of ten of their members during this tough operating environment is a testament to the ability of these clubs to create a strong symbiotic relationship be- tween member and club. Maintaining membership levels is essential to a strong operation as it allows a club to spend less time and money on attaining new members. Possibly attributable to the poor consumer spending environment, the typical respondent reported drop in net membership of -1.3% and slight decline in member retention from 2011 to 2012.


FITNESS-ONLY CLUBS REPORT ADVANTAGE OVER MULTIPURPOSE CLUBS AND STUDIOS Fitness-only clubs outperformed multipurpose clubs and


studios in 2012. Fitness-only clubs reported higher operat- ing profit as a percentage of total revenues (25.0% vs. 17.4%


and 20.6%, respectively). Fitness-only clubs did this by do- ing a good job at managing expenses. In particular payroll expenses were significantly lower for fitness-only clubs (35.2% vs. 47.6% and 42.7% for multipurpose clubs and stu- dios, respectively). Multipurpose clubs reported a signifi- cantly higher member retention ratio (73.6% vs. 65.6%) and higher membership growth (0.8% vs. -2.2%) than fitness only clubs. As one might expect, the multipurpose clubs derive a much higher percentage of revenue from non-dues sources with nearly 40% of total revenue coming from non- dues related revenue.


INDEPENDENT CLUBS OUTPERFORMED CLUBS THAT WERE PART OF MULTI-CLUB GROUPS IN 2012 Clubs that were part of a chain or multi-club group re-


ported weaker operating profits than independent clubs (14.0% vs. 22.6%). Independent clubs reported more total revenues per club than clubs that are part of a multi-club group; however, the multi-club groups were able to retain more members (74.3% vs. 70.0%). Clubs that are part of a chain or multi-club group reported slightly lower payroll expense as a percent of total revenues (44.3% vs. 45.5% of total revenues). FBC


PLEASE NOTE: The numbers reported in this Club Operating Benchmarks section are medians, indicating that half of respondents fell below the figures reported, and the remaining half had a figure above that which is reported.


CLUB OPERATING BENCHMARKS-BY CLUB TYPE


FINANCIAL Total Revenue (000s) Revenue Growth Dues Revenue


Non-dues Revenue*


Personal & Group Training Revenue Operating Expenses Operating Profit


Revenue per Membership Account


MEMBERSHIP Rate of Member Retention (Accounts) Net Membership Growth


Operating Expenses per New Membership Account


OPERATIONS Total Payroll as % of Revenue


Fitness Equipment Reinvestment Expenses as % of Revenue


ALL CLUBS 2012 2011


$750.0 $800.0 0.5%


FITNESS-ONLY CLUBS


2012 2011


MULTIPURPOSE CLUBS


2012 2.8% 2011


STUDIOS 2012 0.3% 2011


$547.0 $653.8 $1,728.1 $1,810.8 $450.0 $600.0 -1.2%


67.6% 65.6% 78.3% 73.5% 60.3% 61.0% 74.7% 72.2% 32.4% 34.4% 21.7% 26.5% 39.7% 39.0% 25.3% 27.8%


9.4% 11.1% 19.8% 19.6% 7.9% 6.3% 9.7% 9.7%


80.0% 82.1% 75.0% 77.2% 82.6% 83.3% 79.4% ISD 20.0% 17.9% 25.0% 22.8% 17.4% 16.7% 20.6% ISD


$686 $720 $558 $661 $797 $796 ISD


71.6% 72.1% 65.6% 66.9% 73.6% 70.3% ISD -1.3%


-2.2% $1,615 $1,741 $842 $1,146 0.8% $1,904 $2,164 ISD ISD ISD ISD ISD 44.9% 45.1% 35.2% 35.4% 47.6% 47.6% 42.7% 40.8% 3.0% 1.9% 2.4% 1.6% 3.8% 2.9% 4.0% 3.3%


*Includes Personal & Group Training Revenue Note: Each median was independently calculated for each individual set or subset of responses to a given question or line item. As a result, normal mathematical relationships may not always exist between figures. All Clubs: 57 firms represent 173 facilities. Fitness-Only Clubs: 36 firms represent 122 facilities. Sports/Multipurpose Clubs: 14 firms represent 25 facilities. Studios: 7 firms represent 22 facilities.


March/April 2014 Fitness Business Canada 25


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