IHRSA's goal is to have the fitness industry reach 50 million members by the year 2010. Can we pull it off?
For those involved in the health and fitness industry, the “Golden Arches” represent the archetypical enemy, packing on the pounds in a country that has tipped the scales as the fattest nation on earth. One in two adult Americans — 97 million — are overweight, and 58 million are obese. Compare these stats with McDonald's, the epitome of unhealthy nutrition, bragging of “billions served.”
While it would be overly simplistic to blame Ronald McDonald and friends for obesity (certainly inactivity is also at fault), it would be egregious not to try to understand the fast-food giant's success with consumers. For the sake of the health industry, we need to target those “billions” and get them into health clubs.
Well, maybe billions is setting the bar a bit high. Millions would be sufficient — 50 million, in fact. That's the number of members that IHRSA would like to see in U.S. health clubs by 2010. Globally, the goal is 100 million.
A noble plan, but is it realistic? John McCarthy, IHRSA's executive director, thinks so.
“We wanted to set a goal that we felt we had a reasonably high chance of reaching,” he says.
Consider the numbers. As of 2000, there were 32.8 million health club members (about 11.6 percent of the total U.S. population of 281 million) in the United States, according to the most recent IHRSA/American Sports Data Health Club Trend Report. The United States Census Bureau projects that there will be as many as 311 million people living in this country by 2010. So in order for our industry to hit the 50 million mark, fitness facilities must bring in 16 percent of the total population.
Gary Cooper — leisure research analyst for Banc of America Securities, and author of its October 2000 Fitness Industry Overview — estimates that clubs must grow 5.2 percent annually to achieve this goal: “That strikes me as aggressive, but it's definitely doable.”
Doable if clubs remain aware of changing demographics. For example, baby boomers currently comprise nearly 40 percent of the health club population, according to the Fitness Industry Overview. As boomers age, their needs will change. To retain the boomer market through 2010, clubs must add more low-impact programming (e.g., yoga, Pilates, water exercise classes), argues Herb Lipsman, vice president of development for the Texas-based Houstonian Hotel, Club and Spa, as well as an IHRSA board member.
“It doesn't take a crystal ball to predict what will happen — 10,000 baby boomers are reaching age 50 every day,” he says.
Boomers won't be the only population driving clubs toward 50 million members. To achieve long-term growth, clubs must also look at younger generations, who could prove a bonanza for the fitness industry. Although people between the age of 18 and 34 currently comprise 33 percent of the club membership, the echo boomers — a demographic between the ages of 6 to 24 that currently numbers 74.7 million — will be bulking up this segment during the next decade. That's why IHRSA has singled out echo boomers as a big part of its 50 million initiative.
By recognizing prospects (such as echo boomers) and taking steps to attract them, clubs increase the likelihood of reaching the 50 million goal. As Ed Trainor, vice president of fitness services and product development for the Town Sports International (TSI) chain, points out, clubs can't stick to “business as usual” and expect to hit the mark.
For starters, Trainor, like IHRSA, suggests that clubs concentrate on kids' programming, to assure the financial longevity of the fitness industry. “If we work at both ends and get them in the clubs when they're young, then we'll have them when they're middle-aged,” he reasons.
Trainor also believes that clubs must demonstrate their expertise to the medical community, which typically dismisses the fitness industry as unprofessional. By showing doctors and other specialists that clubs can help improve the health of patients, clubs can develop business-building medical partnerships that result in referrals.
“We've improved through education and training, and we're now qualified to be able to handle special populations,” Trainor says.
These special populations include physical therapy patients and people suffering from conditions such as diabetes and heart disease. As McCarthy points out, these and other health problems are rampant, and, by contributing to the continuum of care, the fitness industry can move closer to 50 million members.
While Lipsman suggests that clubs look toward special populations to reach 50 million, he believes that the fitness industry can increase participation by concentrating on an obvious demographic: women. “If you focus on the women, who are more predisposed to thinking about fitness, then the men and children will come,” Lipsman says. “I don't think the industry has really taken that approach before.”
Other approaches include offering something more than just a membership. Certain people will never sign up for a regular membership, but that doesn't mean that health clubs can't serve them. “I think the way in which we'll get to [50 million members] is to broaden the options that we have for people in joining a fitness club,” says Jill Kinney, the COO and co-founder of Club One Inc., a large, California-based health club chain.
To reach people who aren't exercising in a traditional club setting, clubs must share their expertise in nontraditional fitness setting (e.g., corporate fitness sites, community centers, etc.), Kinney reasons. She speaks from experience. While Club One owns 20 commercial centers with a membership base of 80,000, it also manages 50 corporate fitness centers that collectively serve 500,000 people. This works out to be 4,000 people per club, and 10,000 per corporate location.
Kinney believes that convenience attracts more people to the corporate centers. Plus these sites have a somewhat “captive audience”; in other words, the employees and the fitness center are in the same location.
As Kinney demonstrates, convenience is often what people need to get started on an exercise program — and to stick with it. In fact, the convenience (or location) of a facility is the No. 2 reason why people join clubs, according to the Fitness Industry Overview.
Not surprisingly, convenience also accounts for the popularity of fast-food chains. Still, there's a big difference between the convenience of, say, a McDonald's and the convenience of a health club. You don't need to go far to find a cheeseburger. So should there be a health club on every corner?
That may be taking things a little too far, but McCarthy does believe that the industry requires 8,000 new clubs to handle the growing membership base. However, at first glance, this doesn't seem to leave much growth for existing clubs. Current estimates indicate that the 17,000 fitness facilities in the United States serve approximately 1,900 members each (on average). If, by 2010, membership grew from 32.8 million to 50 million and the number of clubs grew from 17,000 to 25,000, then each club would average 2,000 members each. This only equals compounded annual growth rate of 0.007 percent, or 118 more members per club within 10 years.
This begs the question: Does this industry really require more clubs?
Yes, Trainor answers: “I think there's more room for more clubs and there's a need for more clubs.”
McCarthy, himself, argues that, while certain geographic locations are congested with clubs, there are still many marketplaces in the country being underserved. An expansion of existing clubs, or the opening of new facilities, would benefit both the industry and the consumer, he points out.
Gene LaMott, COO of Gold's Gym International, offers one caveat. If clubs decide to expand, they must not overlook their own capacity. “I would just caution the businesses as they expand that they don't expand outside of their abilities,” he warns.
More clubs would mean more convenience, but what about people who have never tried a club? Will convenience alone draw them in? Probably not. That's why McCarthy stresses that, in order to reach the goal of 50 million members, clubs must improve community-based programming, as well as the current industry standards and ethics — to make people comfortable in health clubs.
Fortunately, if IHRSA's “Fitness American-style” survey is any indication, people are interested in the benefits of exercise. Even though many Americans are overweight, 97 percent of the people who participated in the survey placed maintaining good physical health at the top of their personal priorities. In addition, 91 percent ranked keeping up their physical appearances highly.
If the majority of Americans value health and physical appearance, then they can learn to value health clubs. “The industry is on the right path,” says McCarthy, “but there are two or three areas where we need to work together and improve together. We really have to reach out in our communities because there are millions and millions of Americans who are uncomfortable walking into a health club.”
Charley Swayne, owner of the Valley View Fitness & Racquet Club in Wisconsin, would like to see IHRSA invest in a national initiative that will draw these “uncomfortable” prospects into clubs. Possible ideas, he says, include a nationwide IHRSA Club Day or Month in which members of the public would be encouraged to tour their local health club.
Swayne would also like IHRSA to find out what intimidates people about clubs and then come up with solutions. “As an association, they've got the money,” he says. “They can set up the focus groups. It's just a matter of throwing the money on the table…. They can figure out what they need to get those groups.”
Finally, Swayne would like to see IHRSA raise its 50 million goal by 25 percent. He feels that the association has aimed too short with 50 million, that clubs can hit that number without even trying.
“It will happen if everybody just does nothing,” he argues. “The rate of growth right now…it's going to happen. If anything, the goal is too low.”
Lipsman disagrees. “When we set the goal, we wanted a goal that would push us as an industry, but we'll still be able to claim victory,” he explains. “I'm very confident we'll achieve [50 million] and then some.”
But again, that achievement will only come by reaching out to the people who avoid health clubs, while making plans to work with key demographics. And, at the same time, clubs must not become so consumed with growth that they forget about their loyal customers, McCarthy reminds.
“We really have to, on a daily basis…, just appreciate the members that we do have,” he says. “It's a daily challenge to treat members well.”
The Top 10 Markets for Industry GrowthIHRSA's 50 Million Members by 2010 report recognizes 10 unique opportunities — called “mega-opportunities” — for beefing up club membership. These market targets are as follows:
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By the Numbers
Do you think the club industry can grow to 50 million members? Let us know. Mail us at: Letters to the Editor, Club Industry, One Plymouth Meeting, Suite 501, Plymouth Meeting, PA 19462. E-mail: jerry_janda@intertec.com Fax: (610) 238-0992