State of the Fitness Industry: What’s In Store for 2013

The "fiscal cliff" storm clouds that threatened the economic structure of this nation—and the fitness club industry, for that matter—still hovered in the final weeks of 2012.

President Barack Obama and House Speaker John Boehner reached across the aisle in mid-December to work on a compromise to eliminate scheduled tax hikes and automatic government spending cuts that would reduce the budget deficit. Had there been no effort to rectify the economic situation prior to the New Year, many experts predicted a return to a recession, which would have an enormous impact on the fitness industry.

Even before a resolution to the fiscal cliff situation, fitness club operators perhaps faced more questions in 2013 than in previous years. Will more clubs consolidate in 2013? Will there be more high-volume, low price (HVLP) clubs? What other competitors will challenge the traditional for-profit club model? What economic challenges will members face? And how will the industry address the obesity epidemic?

Despite those questions, insiders in the fitness industry were hopeful for an improved economic outlook in 2013, and that was before fiscal cliff negotiations intensified.

"I think 2013 is going to be a wild year," says Thomas Plummer, founder of the National Fitness Business Alliance, Marstons Mills, MA. "Everybody's going to feel good this year. Most of my clients I've talked to—and we deal with people in a little over 30 countries—they're mostly happy. It was a good year [in 2012], a good run. All the indicators seem to be leading to a very, very good year coming."

Mark Mastrov, co-founder of New Evolution Ventures, Lafayette, CA, which runs a variety of club concepts, including Crunch, Crunch franchise clubs, UFC Gym and Madonna's Hard Candy Fitness, says a lot of factors will play into the decisions club operators will make in 2013.

"It's going to be one of the more interesting years that we've seen," Mastrov says. "I think a lot of us coming into 2012, there was a lot of enthusiasm around the economy improving, and I think our businesses, for the most part, saw improvement [last] year. I think it's a year that you have to be very careful on where you're spending your capital, whether it's growth or acquisitions, or whether it's improvements in existing facilities, or whether it's increased labor."