The Health and Fitness Industry Today

1
The Health and Fitness Industry Today
2
The Movement

• Past 50 Years
• Those exercising 100 days/year outside of the
  home
• 1960 10 million
• 2000 55 million
• Why the huge increase?
• Those exercising in the home is equal
• Explain this phenomenon
• What makes home-based training such an attractive
  option?
• Stereotypes
• Convenience
• Fear
• Lack of Education

3
Why You Are Here
Number of US Clubs 29,069 (1/06)
Number of Members 41.3 Million
Number of IHRSA Clubs 4,200 (1/06)
Revenue Generated in 2005 15.9 Billion
Source IHRSA/American Sports Data 2005 Health
Club Trend Report
4
Usage Patterns Rising
Source IHRSA/American Sports Data 2005 Health
Club Trend Report
5
Participation Rates

• Only 22 meet ACSM guidelines
• Explain the disparity between participation rates
  and guideline compliance
• Lack of quality education on the topic
• Barriers to exercise (work, home, etc.)
• Social issues
• What is the answer?
• Programming
• Convenience

6
The Future is Bright

• 59 of inactive Americans report a desire to
  become more active
• We must bridge this gap
• How do you reach this market?
• Consider softer approaches
• Exercise Lite
• More user friendly programming
• Less intimidating settings
• Employees should mirror market
• Consider décor design

7
Major Types of Settings

• Commercial
• For profit
• 26 of market share
• 8 market penetration
• Trends
• Less single-purpose clubs
• Racquetball, Tennis
• More multipurpose
• Less indoor-only
• More 4 season clubs
• Greater emphasis on programming
• Less sales-based clubs
• Movement away from annual dues
• More month-to-month plus initiation fees
• Holds club accountable to provide quality service

8
Fitness Industry Data
Source IHRSA/American Sports Data 2005 Health
Club Trend Report
9
The Movement
Source IHRSA/American Sports Data 2005 Health
Club Trend Report
10
Participation Rates
Source IHRSA/American Sports Data 2005 Health
Club Trend Report
11
The Major Players

• Golds Gym www.goldsgym.com
• 500 Locations
• Inexpensive (35/month)
• Appeal to 18-35 population
• Tend to be less service-based
• Ballys Fitness www.ballyfitness.com
• 350 Locations
• Inexpensive (35/month)
• Similar market as Golds
• Very sales driven
• Club Corporation of America
• 250 Locations
• More expensive (55/month)
• High-end nature
• More service-based

12
Major Types of Settings

• Corporate
• On the rise in recent years
• Corporations use it to attract employees
• Part of the package
• Good tool for retention
• Dependent on size of the workforce
• Vast majority of U.S. corporations have lt100
  employees
• Typically found in corporations With gt750
  employees

13
Corporate Settings

• Benefits to corporation
• Greater productivity
• Enhanced retention rates
• Lower health care costs
• Lower absenteeism
• Inherent Differences
• Not based on sales
• Constant membership base
• Get to know members VERY well
• Totally driven by employee productivity outcomes
• Usually the first extra to be cut from budget

14
Clinical Settings

• 1000 hospital-based facilities
• Increasing rapidly
• Movement toward total care model
• Health care health fitness
• Closely associated with outpatient services
• Physical therapy
• Sports medicine
• Cardiac rehabilitation
• HCAs see the benefit and
• Health care administrators are now beginning to
  realize the value of prevention
• Reduced revolving door effect
• Increased revenue
• Total wellness model

15
Community Settings

• Nonprofit programs
• Tough competition
• Receive federal/state funding
• Offer extremely low membership rates
• YMCA, YWCA, JCCs
• Typically attract members with lower SES
  (socioeconomic status)
• Usually have pools, sports programs, and
  multipurpose facilities
• Also include hotels, condo-based fitness centers,
  apartment-based fitness centers

16
Management Functions

• Promotion
• Programming
• Management
• Different settings place varying emphasis on
  these 3 areas
• Depends on their vision/mission
• Staff availability
• Nature of competition/lack thereof

17
Commercial Functions
29
42
29

• Why do commercial centers spend the most time
  promoting?

18
Corporate Functions
25
37
38

• Why do corporate centers spend the most time
  managing?

19
Clinical Functions
25
37
38

• Why do clinical centers spend the most time
  managing?

20
Community Functions
37
38
25

• Why do community centers spend the most time
  programming?

21
Where do you fit?

• Manager
• Administers daily operation
• Regulate budget
• Guide and direct staff
• Supervisor
• Hire and dismiss staff
• Oversee program and staff
• Evaluate staff
• Exercise Leader
• Guide participants
• Conduct classes

• Assessor
• Conduct participant testing
• Interpret results
• Planner
• Assess organizational needs
• Establish program goals
• Motivator
• Rah, Rah
• Sales promotion
• Educator
• Influence participants
• Inform staff

• Emphasis on each area will vary in all 4 settings

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Facility Differences
Area Commercial Corporate Clinical Community
Administrative 3,095 - 8 2,109 5 1,758-5 1,695-4
Exercise Areas 16,419 42 18,059 49 16,688 49 16,806 43
Warm-Up Areas 3,895 10 4,050 11 4,895 13 3,450 9
Multipurpose 1,375 4 2,461 7 3,403 9 2,475 6
Locker Rooms 6,450 17 6,466 18 4,950 13 7,087 18
Storage 1,027 3 963 3 1,631 4 858 2
Laundry 422 1 422-1 675-2 450-1
Nursery 774 2 ------ ----- 900-2
Snack Bar 844 2 ----- ----- 675-2
Circulation 4,458 11 2,350-6 1,800-5
Total Sq. Ft. 38,729 36,871 37,800 38,421
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Business Modifiers

• Objectives
• Commercial
• PROFIT Primary Objective
• Expected from all profit centers
• Unless the department contributes to membership
  fees
• Fitness/Group Exercise
• Secondary Objectives
• High level of service
• Staff development
• Program implementation

Does this action indirectly or directly
contribute to the bottom line?
24
Business Modifiers

• Corporate
• Primary Goals
• ltAbsenteeism
• ltHealth Care Costs
• gtProductivity
• ltTurnover
• All three must be monitored closely
• Secondary Goals
• Improve employee morale
• Increase enthusiasm

25
Business Modifiers

• Clinical
• Difficult to identify clear objectives
• Increased community visibility for the hospital
• Enhance institutional loyalty
• Increase patient volume -
• Some programs operate independently
• Profit becomes primary objective
• Managed much like a commercial program

26
Business Modifiers

• Community
• Depends on the goal of overarching organization
  (YMCA, JCC, etc.)
• Each entity will take on the characteristics of
  their organization
• Community enhancement
• Outreach to lower SES populations
• Elderly/Children

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A Final Note

• Target Population
• Influences every decision made within a given
  health/fitness organization
• Corporate
• Finite of members
• Important to develop relationships, but difficult
  to stay motivated based on lack of profitability
• Commercial
• Infinite of members
• May be less service oriented based on
  availability of members
• Market competition is beginning to cause
  increased service mindedness

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The more precious the prospective member
becomes, the more program intensive the facility
and staff become