As stated in the recent Cybex-sponsored IHRSA State of the Industry April update, this year, for the first time in 10 years, health club membership in the US has stalled at 41.3m members.
However, IHRSA executive director John McCarthy says that, for several reasons, this is not altogether bad news.
“Firstly, every industry needs a periodic pruning,” says McCarthy. “Bearing in mind that the number of clubs had risen by 89 per cent from 15,372 in January 2000 to 29,061 in January 2006, a weeding out of marginal operations is overdue.
“The stall warns first time club developers against haphazard development and investment and encourages all operators to check their location, scale, price, visibility and accessibility to move forward on a positive footing. It also underlines the important of revenue per membership and puts a premium on retention.”
McCarthy also highlighted the fact that mature clubs (which have been in operation for three years or more) can use this period to prove their success.
“This stall rationalises the expectations of investors and tells them that mature clubs that consistently manage to grow their membership by 2-4 per cent a year and grow their revenues by 6-9 per cent are doing well,” he says.
“Remember industry growth also stalled between ‘89-’90, ‘91-’92 and between ‘94-’95. After each of these periods, industry growth resumed its upward course,” McCarthy concluded.
