In 2015, the health club industry experienced more bifurcation, franchise growth, and growth in high-volume, low-price clubs. The 2016 Top 100 Health Clubs list reflects those trends.
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Even though the Club Industry 2016 Top 100 Health Clubs list features many of the same health club companies as last year in about the same order, a dive below the surface of the list reveals some subtle changes in the direction of the health and wellness industry.
"The 2015 year was a period of impressive growth amidst the various franchise companies, specifically targeted clubs and several of the largest club companies," said Rick Caro, president of consulting company Management Vision, New York. "Many grew organically and a few via significant acquisitions."
Last year's list, which was based on 2014 revenue, included three companies with revenue of more than $1 billion: LA Fitness, 24 Hour Fitness and Life Time Fitness. On this year's list, which ranks companies by 2015 revenue, two more clubs, Equinox and ClubCorp, joined the $1 billion club.
High-volume, low-price clubs did well in 2015, too, with Caro pointing specifically to Planet Fitness, Vasa Fitness, The Edge and Xperience Management Group.
Core Power Yoga, which didn't report revenue numbers so we estimated a five percent increase for it, and EXOS, which manages in-house corporate fitness centers, also had major growth years, according to Caro.
As in most years, the club companies at the top of the list are the most private about their revenue. To get the numbers for these companies, we went to various financial sources in the industry, and we noted those in the list, as well in the text below where appropriate.
The list ranks companies by 2015 revenue. As such, it is not meant as a ranking of clubs by quality, customer service or any other non-financial factor.
The Top 10
LA Fitness, Irvine, California, ranks No. 1 again this year with $1.912 billion in 2015 revenue, a number we gained from industry sources. That compares to $1.85 billion in 2014 revenue, also a number from industry sources. Part of the company's growth came from the November 2015 acquisition of 11 clubs in Arizona from 24 Hour Fitness. LA Fitness already had 37 clubs in the state. In December, LA Fitness closed three of the 24 Hour clubs it acquired in Phoenix.
The November deal moved 24 Hour Fitness, San Ramon, California, which ranks No. 2 on the list, out of the Arizona market for now, but 24 Hour grew in its Midwest presence by acquiring the assets of two LA Fitness clubs in Oklahoma and one in Nebraska. (24 Hour Fitness sold those three clubs and the rest of its Midwest clubs to Genesis Health Clubs, Wichita, Kansas, this year for an undisclosed sum.) Those acquisitions likely helped 24 Hour Fitness grow its 2015 revenue to $1.418 billion, a number arrived at through industry sources, compared to $1.330 billion in 2014, a number also derived from industry sources.
Coming in at No. 3 on the list is Life Time Fitness, Chanhassen, Minnesota, at an estimated $1.354 billion. As a public company until June 2015, Life Time had disclosed its 2014 financials in filings with the Securities and Exchange Commission (SEC), and the estimated revenue for 2015 was based on a 5 percent increase from its 2014 reported revenue of $1.29 billion.
ClubCorp, Dallas, one of the three public companies on the list, ranks No. 4 with reported 2015 revenue of $1.1 billion compared to reported 2014 revenue of $844.16 million. Much of ClubCorp's growth came from acquisitions in 2015. In March 2015, ClubCorp acquired six golf and country clubs for $44 million, and in December 2015, the company purchased another country club.
Equinox, New York, ranks No. 5 with revenue of $1.070 billion in 2015, a number we estimated using a variety of financial sources. In 2014, we estimated Equinox, which includes Blink and SoulCycle, had revenue at $882 million. In July 2015, SoulCycle announced it would file for an initial public offering (IPO), but as of early August 2016, the IPO had yet to happen. In April 2015, Equinox announced it would open luxury hotels for health-conscious travelers, and most of the hotels would include a fitness center. In November 2015, Equinox opened its first location in Houston. In March 2015, Blink announced that it would add 12 clubs in 2015, and in June 2015, Equinox announced it would start franchising its Blink brand.
Equinox CEO Harvey Spevak said in January 2016 that he anticipated the company to have big unit growth this year, too, with the expectation of opening 10 clubs.
Coming in at No. 6 is the second public company in the industry, Town Sports International (TSI), New York. TSI was one of just four club companies that reported a decrease in revenue in 2015. Its 2015 revenue was $424.32 million, a 6.5 percent decrease from 2014. TSI's total revenue has declined every year since 2011 when it was $466.9 million, according to the company's SEC filings.
Despite the decline in revenue, the company posted its highest member count ever—541,000— in 2015, according to the company's 2015 financial disclosure released in March. The increase in 2015 membership over 2014 was primarily due to the introduction of a lower pricing membership model, TSI noted in the SEC filing. TSI completed the introduction of the lower pricing model in the second quarter of 2015. Approximately 80 percent of the company's clubs were operating under the lower pricing model at the end of 2015 with the remaining clubs compromising the passport-only model.
"This model gives us an opportunity to recapture market share and compete against certain other gyms that opened in our markets," TSI stated in the SEC filing. "We believe our offerings are compelling because we include group exercise classes, top-of-the-line equipment, pools and courts with price of certain memberships, when available. We continue to consider and make pricing adjustments in order to increase revenue while also driving membership growth."
The third public company on the list, Planet Fitness, Newington, New Hampshire, ranks No. 7 on the list with $330.5 million in 2015 revenue from corporate-owned clubs and franchisee fees. As with all franchisors on the list, Club Industry asks them not to report individual franchisee revenue since each franchisee can report its own revenue to be considered for the list. When the company released its 2015 financials, it noted that its 2015 revenue was an 18 percent increase from 2014 revenue. (Club Industry had estimated Planet Fitness' 2014 revenue at $279.8 million because the company did not report its revenue for the 2015 list.) In the 2015 financial filing, Planet Fitness also projected 2016 revenue of $365 million with the anticipation of adding 210 to 220 franchised locations in 2016.
Planet Fitness went public in 2015, debuting on the New York Stock Exchange in August of last year.
The Bay Club Co., San Francisco, ranks No. 8 with reported revenue of $219.33 million, a 35 percent increase from 2014 revenue of $162.36 million. Part of that revenue growth was due to club purchases the company made in 2015, in particular, the April 2015 purchase of the 11 Spectrum Athletic Clubs for an undisclosed sum. Spectrum Athletic had appeared on the 2015 Top 100 Clubs list at No. 30 with $46.71 million in 2014 revenue. The acquisition moved The Bay Club Co. into the Los Angeles market and added 33,000 members to the company. Matthew Stevens, president and CEO of The Bay Club Co., had served as CEO of Spectrum Athletic Clubs for five years prior to joining The Bay Club Co. in 2008 when the company was still known as Western Athletic Clubs.
The Bay Club Co. also made a June 2015 purchase for an undisclosed amount of an Active Sports Club in San Jose, California, in the Silicon Valley area. The company already had two other locations in the area: Bay Club Cupertino and Bay Club Santa Clara.
No. 9 on the list is XSport Fitness, owned by Capital Fitness, Chicago. XSport reported 2015 revenue of $193 million compared to $190 million in 2014 revenue. The company reported 36 clubs at the end of both years.
No. 10 on the list is Crunch with $161 million in 2015 revenue. At the end of 2015, Crunch had 50 corporate-owned clubs, 99 franchised locations and four licensed locations. That compares to 46 corporate-owned clubs, 80 franchised locations and four licensed locations at the end of 2014.
Hospital-Based Wellness Center Performance
This year's list included four companies with decreases in revenue, and other than the aforementioned TSI, they were hospital-based companies.
Akron General Health & Wellness Centers, Akron, Ohio, reported a 1.25 percent decrease in revenue to $17.48 million in 2015 for its four sites, placing it at No. 55 on the list. In August 2015, Akron General merged with the Cleveland Clinic. Prior to that, Akron General had been an affiliate of the Cleveland Clinic.
LifeBridge Health and Fitness LLC, Baltimore, came in at No. 95 on the list with $5.26 million, which was a 3 percent decrease from 2014 revenue.
The Fitness Center at University Hospitals Avon Health Center, Avon, Ohio, also had a 3 percent decline in revenue in 2015, reporting $3.06 million for a rank of No. 99.
In addition to these decreases, three other wellness-affiliated companies reported flat numbers in 2015. Midtown Athletic Clubs, Chicago, owns eight multipurpose clubs, but it also manages 22 hospital and corporate wellness facilities. In 2015, the company, which ranks No. 14 on the list, had a flat year, reporting $101.7 million in revenue.
At No. 34, Healthtrax International, Glastonbury, Connecticut, which develops and manages hospital and corporate wellness centers, had a flat year, reporting $36.98 million at its 16 owned facilities and two managed facilities.
TriHealth Fitness and Health Pavilion, Cincinnati, Ohio, which is part of the TriHealth hospital system, reported a flat year with $6.3 million in revenue. The Medical Fitness Association-certified, multipurpose health and wellness center ranked No. 89 this year.
Even though these six companies didn't report increases, 10 medical-based or wellness-oriented facilities on the list did report revenue increases, and we estimated an increase for two more companies that declined to report their revenue.
The wellness-oriented company with the largest revenue increase in 2015 was No. 21, acac Fitness & Wellness Centers, Charlottesville, Virginia, which reported a 26 percent revenue increase. acac offers several medical wellness components and partnerships at its 11 sites, and it reported $57.97 million in 2015 revenue.
Plus One Holdings Inc., New York, declined to offer its 2015 revenue, but the company, which is part of Optum, a health care system, and which develops and manages 300 on-site wellness programs for corporate clients, was estimated to have a 5 percent increase in revenue, which would give it an estimated 2015 revenue of $56.99 million.
Active Wellness LLC, Sausalito, California, owns and operates seven of its own health clubs, but it also manages 53 wellness facilities for corporations, residential facilities and hospitals. The company, which ranks No. 29 on this year's list, reported an 8 percent increase in revenue to $45 million.
As a service of the Ochsner Health System, Elmwood Fitness Center, Harahan, Louisiana, reported $14.3 million in 2015 revenue for a 2 percent increase, landing it at No. 60 on the list.
Centegra Health Bridge Fitness Centers, Huntley, Illinois, which is part of the Centegra Health System, was not far behind Elmwood at No. 63. It reported a 2.5 percent increase in revenue, bringing its revenue to $12.34 million.
Dedham Health and Athletic Complex, Dedham, Massachusetts, is not a part of a health care system, but it does offer a large wellness program and partnerships with the medical community. For 2015, Dedham reported $12 million in revenue, a 2 percent increase from 2014 for its one facility. It ranks No. 67 on this year's list.
The Claremont Club, Claremont, California, also is not affiliated with a health care system, but it offers medical wellness in its Project Walk program and other rehabilitation programs. Claremont ranked No. 69 this year with $11.81 million in 2015 revenue, a 4.5 percent increase.
Sparrow Michigan Athletic Club, which is part of the Sparrow health care organization in East Lansing, Michigan, reported the highest increase in hospital-based facilities with a 4.3 percent increase for $11.03 million, landing it at No. 70 on the list.
Although Cooper Aerobics Enterprises, Dallas, is not affiliated with a hospital, it is medically oriented, and it reported a 5 percent increase in revenue to $10.69 million in 2015, placing it at No. 71 on the list.
Health and Fitness Centers of Northwestern Lake Forest Hospital, Lake Forest, Illinois, reported a 3 percent increase in 2015 revenue to $8.34 million. The Northwestern Medicine facility ranked No. 80 on this year's list.
Baylor Tom Landry Health & Wellness Center, Dallas, is a medically integrated facility. It did not report its revenue this year, but we estimated a 3 percent increase to $5.89 million for its one facility.
Premier Health & Fitness Center, Tallahassee, Florida, which is a subsidiary of Tallahassee Memorial Hospital, had a 1 percent increase in revenue in 2015, reporting $4.85 million and ranking No. 96.
Top 100 Caliber Companies Not on the List
Every year, several companies who deserve to be on the list decline to provide their information, and we are unable to secure accurate estimates from other sources. The following companies likely should be on the list but are not for this reason:
- The Alaska Clubs, Anchorage, Alaska
- American Family Fitness, Glen Allen, Virginia
- California Family Fitness, Orangevale, California
- Chicago Athletic Clubs, Chicago
- Fitness 19, Maple Valley, Washington
- Fitness USA, West Bloomfield, Michigan
- Genesis Health Clubs, Wichita, Kansas
- Gold's Gym International, Irving, Texas
- In-Shape Health Clubs, Stockton, California
- Lucille Roberts, New York
- New York Health and Racquet Club, New York
- O2Fitness, Raleigh, North Carolina
- PRO Sports Club, Bellevue, Washington
- Titan Fitness Holdings (Fitness Connection), McLean, Virginia
- World Gym International, Los Angeles
- WOW! Work Out World, Wall, New Jersey
- YouFit, St. Petersburg, Florida
Access the Top 100 List Here
Editor's Note: The companies on the Top 100 Clubs list are ranked by 2015 gross revenue, not by any other standard. Club Industry allows franchisors to report revenue from corporate-owned facilities and franchisee fees but not revenue from individual franchisees, as each franchisee can report its revenue separately to be considered for the list.
A big thank you to Rick Caro, president of Management Vision, for his help with the list and the analysis this year. And thank you to all the club companies who submitted their forms this year.