The Fitness Industry Shown below are recent fitness industry statistics provided by IHRSA (International Health, Racquet and Sports club Association) Though there are many similarities between the health club industry and other retail, health promotion, hospitality and leisure time businesses, the industry is distinctive in various ways. Among them are the following: The industry continues to grow during economic downturns. Whereas during the economic downturns most retail and hospitality businesses experience contraction, the health club industry has, over the past 20 years (including three recessions), continued to grow… It has become a convenience business. Because workout frequency is crucial to reaping the rewards of regular exercise, clubs need to be convenient. This means that they need to be as close as possible either to where members work or to where they live. An axiom of this business is “Closer is always better.” It is difficult to overstate the important of convenience. For most consumers, convenience trumps price. A health club member will pay $10 to $50 more per month to belong to a club that is convenient as opposed to one that may be less expensive, but is also less convenient. Because convenience is such a fundamental factor in club success, site selection is of paramount importance. Most successful clubs are found at the center of upscale marketplaces that have both residential and commercial components. Convenience implies more than proximity. It also entails accessibility. A club can be— as the crow flies—incredibly close, yet, at the same time, inaccessible. Many factors contribute to inaccessibility, including traffic patterns, traffic jams, signage problems, the lack of parking, safety and security issues, dangerous access or egress, etc. The industry enjoys ‘annuity-like’ features. Most retail businesses begin the first day of each month with zero sales for that month. This is not true of the health club industry. On the first business day of each month, almost every club gets an electronic funds transfer payment into its bank account of somewhere between $40,000 and $400,000. At almost all clubs, club members authorize their club to extract their monthly dues payment from their bank account on the first business day of the month. In most clubs even in difficult times, these fund transfers are relatively stable. Most clubs under most circumstances gain at least as many new members each month as they lose old members. Few retail businesses have the luxury of posting such a significant portion (70% to 90%) of their monthly sales on the first business day of the month. The impact of the media. On an annual basis, this industry receives hundreds of thousands of pages of free promotion, extolling the myriad benefits of regular
exercise. This extends from the nation’s most prestigious publications (such as the Journal of the American Medical Association) to tabloids. Regarding the power of the media relative to the fitness business, three factors stand out. First, every major media outlet, whether print or electronic, has a health journalist part of whose job it is to report on new research that points to the benefits of regular exercise. Second, American lifestyle journalists are continually reporting how the nation’s most prominent celebrities—whether they be political figures such as President Bush or Colin Powell, or TV personalities like Oprah Winfrey or Regis Philbin, or Hollywood stars such as Arnold Schwarzenegger, Jennifer Lopez or Julia Roberts, or sports celebrities such as Tiger Woods and Andre Agassi, or music mavens like Britney Spears or Bruce Springsteen—are all involved in regular exercise on a daily basis and who consider their involvement with exercise to be essential to their performance. Third, pick up any issue of any major women’s magazine and you will find numerous articles that either implicitly or explicitly advise and encourage its readers that the path to health and...
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