Another year has come and gone. Some things change; most do not. Predictions come true, or they are laughed at because the opposite occurred.
A brief review of some things I forecasted in the past two years may interest you. Please note that in many cases official industry data will not be published for several months. Thus, some of my information is gleaned from private surveys.
Prediction: A devastatingly affected middle-of-the-market.
What has happened: The largest number of 2006 club closures has come in this sector.
Prophecy for 2007: More of the same.
Prediction: Very low or no net growth in clubs this year.
What has happened: So far, a slight single-digit growth factor. Many clubs closing, many new clubs opening, particularly studio-type, smaller facilities.
Prophecy for 2007: An actual net loss in club numbers by the end of the year.
Prediction: A shift of a major portion of members to lower-priced clubs.
What has happened: It has begun in earnest. The biggest beneficiary of membership change has been the teens-per-month membership facilities led by Planet Fitness.
Prophecy for 2007: More of this happening at a faster pace. The continuation of commoditization will drive average membership prices even lower.
Prediction: Zero growth in the net membership.
What has happened: Looks like it has happened again.
Prophecy for 2007: Limited growth in this area. Look for the low-pricers to primarily attract new-to-fitness members, thus increasing the net numbers for the first time in three years.
Prediction: Several equipment manufacturers either merging or closing their doors.
What has happened: This did not happen. As a matter of fact, several new companies entered the equipment marketplace this year.
Prophecy for 2007: Your guess is as good as mine. I can't see why small independents are coming in given the power of the major manufacturers.
Prediction: A total upheaval in the group-exercise sector of the fitness marketplace.
What has happened: Just beginning to take hold. Clubs are recognizing that they can no longer carry weakly attended classes or net-loss departments.
Prophecy for 2007: More of the same plus a movement towards pre-packaged programming.
Prediction: Continued growth in the nonprofit fitness facility sector.
What has happened: The nonprofits now have more members than the for profits.
Prophecy for 2007: If the economy is slack and/or if oil, gas and food prices escalate again and/or if local clubs close, expect more growth in nonprofit memberships.
Prediction: Changes in sales and retention strategies.
What has happened: Operators that are seeing fewer prospects come through their doors (because of the failure of advertising) have recognized the need for all-out fights against member attrition.
Prophecy for 2007: Expect these efforts to continue and to contribute to higher net-membership numbers by the end of the year.
Prediction: National economy affects health-club membership purchases.
What has happened: Lower pricing in general has helped to keep membership numbers at least somewhat steady, despite an uncertain economy. Less available discretionary income has certainly affected areas like personal training and other fee-based programs in many clubs.
Prophecy for 2007: Consensus has it that the economy will slow further. Membership purchases will be directly tied to interest rates, unemployment and gas prices.
Note: Scudder will write From the Lip every other month in 2007.
Michael Scott Scudder owns and operates MSS FitBiz Connection, an online-based club consulting and training service. Scudder can be reached at 505-690-5974 or mss@michaelscottscudder.com.