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Global Perspective INDUSTRY INSIGHTS


What will be the forces shaping the health club industry around the world in 2014? IHRSA’s expert panel offers its thoughts


KRISTEN WALSH, ASSOCIATE PUBLISHER, IHRSA O


urs is a US$75bn industry. Every day, 150,000 facilities worldwide help over 132 million health club


members improve their health. What will these and other industry numbers look like in 2014 and beyond?


North America The US economy is on the rebound, according to Dr Sherry S Cooper, executive vice president and chief economist of economic research for BMO Financial Group in Canada: “Retail sales are accelerating as household net worth


is rising relative to income. Consumer confi dence is up, which will be good for the health club industry as the fi nancial crisis and ensuing rise in unemployment crushed discretionary spending.” In fact, the green shoots of growth


have already been seen in the fi tness industry. The IHRSA Index – which demonstrates the fi nancial performance of the commercial health club industry in the US – has shown improved year-on-year performance for three consecutive years. But optimism is still cautious. “While signs of recovery and strengthening are


appearing, the industry still maintains a conservative approach along all business operations: staff levels are lean, facility reinvestments have been cut back, debt is being paid down, and facilities are trying to manage their cash fl ow by revising leases and mortgages and seeking new terms with creditors,” says Melissa Rodriguez, IHRSA’s senior research manager. The US health club industry is ripe for


consolidation, adds Rick Caro, president of Management Vision, an industry consultancy based in New York City: “The theme for over 16 years from the fi nancial community is that the health club industry is one of the most fragmented they have ever studied.” “As more and more customers gravitate


Niche operations such as cycling microgym SoulCycle are fl ourishing in the US 48 Health Club Handbook 2014


toward the higher and lower ends of the market, mid-market players will come under continued pressure,” says industry consultant Bryan O’Rourke, co-founder and CEO of Integerus. “At the high end, spa and resort facilities are fl ourishing, along with experiential niche models such as cycling and mind-body studios. At the budget end, operations with business models like that of Planet Fitness are expanding. Many clubs in the middle are trying to be everything to everyone, but they’re at the greatest risk.”


www.healthclubhandbook.com


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