Health Club Industry Growth Still Anticipated

Overland Park, KS — Despite the economy, rising unemployment and price cutting at many health club companies, several polls indicate that the fitness industry will fare better than other industries during this recession.

The fitness industry is still projected to grow this year by 4 percent, according to IBISWorld Inc., an industry and market research company. Anthony Gikas, a senior research analyst with Piper Jaffray, was quoted in the St. Paul (MN) Pioneer Press as saying that the health club industry is still expected to grow 5 percent to 10 percent a year — although he did say that slower growth might occur for the next year or two.

Financial Week magazine predicted that despite the economy, the health club industry would increase by 2.2 percent in 2009 and listed it as one of the industries that would prosper this year. The magazine noted that with the obesity epidemic and the aging Baby Boomer population, plus rising health care costs, insurers and corporations would have reasons to promote preventive practices, such as health club memberships.

Some of the top club operators also indicated that they expect growth this year. A survey of clubs who made Club Industry's Fitness Business Pro's Top 100 clubs list last year found that 10 of the 19 responders say that their membership will increase in 2009 compared to 2008. Twelve of the club operators also said that their revenue would increase in 2009, while two said it would decrease, and five indicated it would stay the same.

In early December, Money magazine surveyed its readers to see what they would not give up in the recession. One of the top items they would not give up was their gym membership. Forty-eight percent said they wouldn't give up their health club membership compared to 41 percent who wouldn't give up eating out, 35 percent who wouldn't give up their extra car and 30 percent who wouldn't give up premium cable. Items that those surveyed would give up included new gadgets (89 percent), sporting events (87 percent), big vacations (83 percent), expensive clothes (80 percent) and cultural events (78 percent).

Another poll, sponsored by Anytime Fitness and conducted by Opinion Research Corp., found that 60 percent of those surveyed would not give up their club memberships despite the economy. Another 23 percent plan to downsize to a more affordable health club. When choosing health clubs, 21 percent said convenience or atmosphere was the top consideration, while 54 percent said cost was the most important factor.

Prospects' cost concerns may be the reason many health club operators dropped initiation or enrollment fees in January, cut monthly dues, offered monthly memberships and offered a certain number of free personal training sessions.

Equinox, New York, offered a 50 percent discount on its initiation fee. Members would get that fee back if they worked out 36 times in the first three months. Through March 6, Waco, TX-based Curves is offering 50 percent off its initiation fee and one free month. Sports Club LA, Los Angeles, offered lapsed members two months of free membership if they paid the one-time initiation fee, which can be at least $600. Gold's Gym International, Irving, TX, dropped its enrollment fee. LA Boxing offered a 30-day money-back guarantee. Wilmington Athletic Club, Wilmington, NC, began offering month-to-month memberships for the first time.

The Arthur M. Glick Jewish Community Center in Indianapolis waived its $300 enrollment fee in January and offered 50 percent off dues for the first three months. The YMCA of Greater Indianapolis offered a plan where instead of paying the $99 enrollment fee, the fee was based on the day of the month. People who signed up for a membership on Jan. 5 paid $5. People who signed up on Jan. 20 paid $20.

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