As I filled up my Ford Taurus the other day, I quickly realized the $3.15 per gallon price for the gas would be ringing up a higher charge on my credit card than I had seen in a while for this expense. As I watched the numbers continue to climb on the monitor, I wondered how much more I'd be willing to pay for gasoline. For when that time comes, I considered my options for alternative forms of transportation: taking the bus to work (but then I'd have to leave home earlier, and I couldn't run errands at lunch), carpooling with friends (but then I couldn't work late when I need to), riding my bike (but then I'd have to worry about the weather and sweating on the way to work) or buying a hybrid vehicle (but I'd first have to pay off the bathroom remodel and unexpected car expenses I just incurred).
Nothing seemed a possibility in the transportation area. So I started thinking about other expenses I could do without. The organic foods, the smoothies, the Monday night movies, the season tickets to the theater … all possibilities. But when the idea of cutting out my gym membership crossed my mind, I couldn't even consider it. I may not be the typical club member because my job revolves around this industry, but the main reason I wouldn't consider dropping my membership is because it's too important to my quality of life right now.
Does that mean that as your members face rising gasoline prices, a mortgage crisis, rising credit card debt and the possibility of a recession, that they will drop their membership to your club as an unnecessary extra? I can only guess it depends on how much you've worked your way into their daily lives. The industry has weathered past recessions without too much damage. Because financial pundits sometimes say you don't know you're in a recession until you're coming out it, it's difficult to say whether a recession has arrived yet (or even will arrive). Therefore, it's too early to say how members will react.
During the two weeks prior to writing this column, I read the financial reports coming out in our industry and listened in on some of the financial calls with Wall Street analysts that the various fitness equipment manufacturers and Life Time Fitness held (Town Sports International is set to release its financials the day after this issue goes to press). So far, the financials for most of them show increases in revenue and sales. Of course, most of those financials relate to how the companies performed several months ago. We won't see their first quarter financials until April or May. A couple of the executives at these companies came right out in their calls with analysts and said that they expect slower growth this year due to a possible economic downturn.
So I'm still in a wait-and-see mode, both on whether we're in a recession or just an economic downturn (although isn't that just a less fear-inducing way of saying recession?) and on what I'm going to cut out as my expenses rise. So far, my health club has convinced me that I can't live without it. I hope you've convinced your members of the same. If you haven't, maybe you better start now.