Health Clubs 2015: The Things that will Plague Us… and Save Us

January 12, 2015

By: Michael Scott Scudder

I guess if you’re lucky enough to last in this business for more than a decade, some folks think you’re wise…and they ask you for “predictions.”  So here are some of mine for the New Year.

I have access to over 7 years of my own quarterly and annual fitness-business research…plus spreadsheets on over 20 years of other industry studies.  One thing that persistent surveillance of numbers does is to give not only a history of what has happened, but also a glimpse of what can happen in the very near future.  Here’s some strong possibilities for 2015.

BIG COMPANIES WILL BUY MORE CLUBS AND PUT PRESSURE ON INDEPENDENTS IN HUNDREDS OF MARKETS:

Estimably 9% of clubs in the Top 100 control over 40% of U.S. club memberships.  Anticipate that more regional chains and multi-club operations will be bought up and that large players will control even greater percentages of national memberships.  POSITIVE: Smart independents will “un-standardize” offerings and become much more competitive.

“MEMBERSHIP UNBUNDLING” WILL CONTINUE:

Over 1/3 of U.S. clubs have already either a la carted or unbundled prices.  We’re now seeing it even in higher-price facilities.  More clubs will unbundle in efforts to compete.  POSITIVE: Many clubs will reach wider potential prospect audiences by unbundling.

STUDIO AND NICHE FACILITY GROWTH INCREASES:

Some experts say that there are over 20,000 “under the radar” niche facilities presently existent in the U.S – with annual growth rates at more than 15%.  Studios will challenge established clubs not only for training and program dollars, but also for membership revenues.  POSITIVE: Aware operators will change training offerings and compensation, keeping productive trainers in-house and providing better member-client services.

MEMBERSHIP PRICES WILL DECLINE YET FURTHER:

There has been a consistent decade-long year-by-year drop in membership prices. As more budget clubs arrive in markets – and as unbundling persists – expect that monthly dues will trend downward again in 2015.  POSITIVE: Modern-thinking facilities are concentrating on predictably-profitable ancillary-income production…with many now producing over 40% of monthly income in training, program and other-than-membership sales.

CLUBS WILL USE THEIR TECHNOLOGIES TO GREATER ADVANTAGE:

As on-boarding has become more sophisticated and member-use tracking has become part of weekly operations, clubs have turned to their software applications for business solutions.  2015 will be the year that management-software companies with “dashboarding” draw much attention.  POSITIVE: Independent clubs will operate with much more objectivity, efficiency and effectiveness.

(Michael Scott Scudder is Founder/CEO of Fitness Business Council, the independent club business network.  Michael can be contacted at 575-613-1004 or mss@fitnessbusinesscouncil.com.