What's the Truth?

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As the year progresses, we are getting conflicting information about how much this recession is affecting the health club industry. Just how worried should club operators be? A recent (and I would say unscientific) "survey" from Northwestern Mutual Foundation (in which people could launch away one of eight worries that included health and fitness, hunger, education funding, illness, retirement planning, natural disasters, financial security and wealth accumulation) found that people who visited its Web site to launch away their cares chose to launch away "health and fitness" more than any other care. That kind of surprised me considering the financial situation today, but I also saw it as a good sign that people understand that their health and fitness are very important--and perhaps that bodes well for the industry.

The International Health, Racquet and Sportsclub Association also recently released a survey of their member clubs that found that 68 percent of respondents had an equal, better or much better January 2009 than January 2008 in revenue. IHRSA did not break out what percent of respondents had an equal year, better year or much better year, instead lumping those responses together, but the association for for-profit club owners does promise to release more details at the IHRSA trade show next week. However, even if IHRSA reveals that the majority of the respondents had an equal January this year to last, I still see that as a positive, considering the economy's state of turmoil.

Our own talks, however, with club operators show more of a mixed view of the year so far. And details from manufacturers are mostly negative. Private manufacturers and service providers mostly put on a stiff upper lip when we spoke to them about how the recession was affecting them. Matrix, which is private, won't release financials for its quarters, but it reported a revenue increase in 2008. However, publicly traded manufacturers (Cybex, Life Fitness, Nautilus) who released their fourth quarter 2008 and year 2008 financials revealed that buying slowed in the fourth quarter for them.

So that's why I wasn't surprised that today BusinessWeek listed the health club industry as one of the industries where "cautious consumers are causing chaos." The article notes increased attrition at Life Time Fitness and Town Sports International, both publicly traded health club companies.

So what do you think? How has the recession affected the industry? Are you seeing higher or lower revenue in the first quarter? What is your attrition like? What about club usage? Are you buying equipment and services this year like you did last? Comment here to let us know how the recession is affecting you.

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