OVERLAND PARK, KS -- January was a mixed bag for club operators, according to a handful of club owners and two veteran club consultants that Club Industry’s Fitness Business Pro surveyed.

Many clubs are reporting a similar January this year to last year, according to conversations that consultant Rick Caro, president of Management Vision, has had with club operators. The club owners he spoke with run the gamut — some operate several hundred clubs, while some are smaller club operators, and all are at various price points, he says.

Michael Scott Scudder, owner of Club Management Education & Training Online, says that the consensus from the two dozen club operators he’s spoken with is that January in general was a bit of a disappointment. Many of these operators are multi-club owners from across all three segments of the industry (high-end, middle, low-price). Many of them didn’t reach their sales targets and had sales targets that were down from January 2008. They also did not have higher membership sales in January 2009 than in January 2008.

Both consultants heard that attrition was better this January for many club operators.

“In some cases, they controlled attrition better or maybe non-dues revenue didn’t grow as much as in the previous January, but they made up for it with a net gain in membership greater than the previous year,” Caro says.

Caro adds that some club operators are working harder to “save” people who want to quit by offering them reduced or free memberships if they are having financial difficulties.

Cost cutting that some clubs implemented in the fourth quarter started to kick in this year, Caro says. However, he noted that a lot of club operators are worried about what the rest of the year will bring, even if January was good for them.

Some club operators are still smarting over January numbers. One 21,000-square-foot club operator in New York, who asked not to be named, said that he had a slower January this year than last. In January 2008, he had 67 new members. In January 2009, he had 35. Revenue in January 2008 was $120,000, but this January, revenue was down by $20,000. (He did not offer an attrition number.) Usage of his club was also lower in January this year, with 21,214 workouts compared to 22,328 last January.

Club One, San Francisco, had a slower January this year than last, according to Bill McBride, COO. Although he wouldn’t provide actual numbers, he noted that dues revenue, ancillary revenue (including personal training), memberships and usage were down this January compared to last January. However, retention was up.

“We had net membership gain and saw good improvements on retention. We are cautiously optimistic,” McBride says.

Still other club operators report increases in January. Life Time Fitness Executive Vice President and Chief Financial Officer Mike Robinson told financial analysts in a call Thursday morning on preliminary 2008 results that January memberships were encouraging.

“Although the mix of new memberships continues to put pressure on average dues, we saw a net membership increase of approximately 20,000 memberships compared to the net 10,000 memberships added in January 2008,” he said. “We were ahead of our internal plan on new membership acquisition, and attrition was relatively stable in January 2009, as compared to the last part of 2008.”

Robinson said that Life Time’s fourth quarter revenue was affected by several factors.

“Not only did we see more individual memberships enroll, as compared to couple and family memberships, but we also saw an impact from new lower-priced dues programs, which gained wider acceptance than anticipated,” Robinson said. “The focus of these new dues programs has been on identifying opportunities for certain underserved audiences to more readily establish memberships with us and drive higher membership growth.”

The program with the highest acceptance was a “young professionals” membership plan where individuals ages 26 and under qualify for up to $20 in lower monthly dues. In the fourth quarter, the company’s employees also could refer one friend or family member to join at a reduced enrollment fee, and a $20 reduction in monthly dues per member.

“It was the success of these types of programs that led to very good membership growth, but lower dues growth than anticipated,” Robinson said.

Membership “deals” typically are common in January for many club operators. In late November 2008, Planet Fitness ran a three-day sale in the Boston and New Hampshire market that gained the company 8,000 new members for about 43 clubs, according to company spokesperson John Craig. The promotion was $1 down, $10 per month, and it was promoted mostly on radio as a “got a buck, you’re in luck” campaign. In December, the franchisor ran a weeklong radio/TV campaign in New England (excluding Vermont) and New York for $99 a year that added about 50,000 new members, Craig says.

“The activity inside our clubs is probably higher than it’s ever been,” Craig says. “I don’t think it’s any accident that a low-cost model is really clicking with people right now. It seems like it has extra-special appeal in times like these. Why pay $50 a month when you could pay $10 to $20 a month?”

Scudder says that several Planet Fitness owners confirmed to him that their sales were up. One out of every four sales came from members of other clubs that were more expensive, they told Scudder.

“[Members] were shifting gears because they felt they had to save money,” Scudder says.

Scudder compares the low-price players’ success to that of Wal-Mart, whose sales also increased in January.

Fitness 19 operators also told Scudder that their sales were strong in January.

“One can make a case that some part of the membership marketplace is going to stay with fitness but is going to stay conscious of price,” Scudder says. “I don’t know if that is consistent with club member behavior as much as it is consistent with retail buyer behavior.”

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