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Friday
Feb052016

This Week in the Fitness Industry: 3 Leading Health Club Chain CEOs Talk to CNN Money

3 Leading Health Club Chain CEOs Discuss Profitability, Strategy
CEOs from several leading health club chains, including Equinox, Planet Fitness, and Anytime Fitness, discussed their profitability and strategies with CNN Money. The article examines the differences in the companies’ business models and target demographics, noting that their diverse methods have led each of them to earning about $1 billion in annual sales. "It's Darwinism, survival of the fittest," Anytime Fitness CEO Chuck Runyon told CNN. "It makes every single club owner have to perform better, invest back in their business."

Study: Upping Exercise May Not Translate to More Calories Burned
Increasing exercise does not necessarily increase calories burned, according to a study by researchers at City University of New York. The study found that, while upping physical activity to expend more calories works to a point, the body ultimately adjusts to keep energy use stable. For the study, researchers examined energy expenditure in 332 adults, age 25 to 45, from populations in Ghana, South Africa, Seychelles, Jamaica, and the U.S. They found that energy expenditure increased alongside increases in physical activity for less active people—but at higher levels of activity, calorie burn plateaued. “I think this paper adds to what we’ve known for a while now, (that) diet is a more effective tool for weight loss than exercise,” the study’s lead author told Reuters. “You still need to exercise, I’m not saying it can’t help with weight loss, exercise is super important for your health.”

Virgin Active, Planet Fitness Find Success in Africa
Virgin Active’s 120 health clubs in South Africa are thriving, and its success has the global brand considering expanding throughout Africa, The Economist reports. In addition to South Africa, the company runs two gyms in Namibia, one in Botswana, and is planning to open a location in Kenya later this year. Virgin is also thinking of opening sites in Ghana and Zambia. “While Virgin Active runs swanky health clubs with fluffy towels and shoeshine services, its popular Jabulani gym is a no-frills branch with lower fees,” The Economist said. “A rival chain, Planet Fitness, has found success with a similar lower-cost model. In places such as Dakar, where gyms are few and expensive, residents take to the beach for group workout sessions.”

Millennials’ ‘Social Fitness’ is Changing the Sports Industry
The millennial generation’s social approach to fitness has changed the sports industry, said a Forbes contributor. Unlike baby-boomers, who are prone to purchasing fitness equipment to get in shape, millennials pursue a healthy lifestyle through experiences with friends. “Millennials, unlike boomers, do not want to be defined by their activities. They would be more inclined than the older generation to say, ‘I run, but I’m not a runner.’ Millennials do not want to be classified based on a particular fitness activity. Instead, they want to try lots of different activities and share these experiences with friends, making fitness activities social ones.”

Fitbit Hopes New Fitness Tracker Will Invigorate Brand
Fitbit’s latest wearable tracker, the Alta, is expected to start shipping in North America in March and become available worldwide in April, TechCrunch reports. The tracker comes with a $130 price tag and the potential to breathe new life into Fitbit’s product line; the company’s stock price fell after it announced the Blaze smart fitness watch at CES 2016. “This is the company’s first mainstream product launch since January 2015 when the company started shipping the Charge HR — which itself was just a follow-up to a previous Fitbit product,” TechCrunch said. “Fitbit is likely counting on the Alta to keep the company at the forefront of the fitness tracker scene.”

Friday
Feb052016

New E-book Provides Tools for Heart Health Promotion Programs 

Hearts are top-of-mind in February, and not just because of Valentine’s Day. 

February is American Heart Month in the United States, a month focused on raising awareness for heart disease risk and educating the public about heart health and disease prevention. Additionally, the first Friday in February is designated “Go Red For Women” day, a day to highlight the risk women face from heart disease.

Research has consistently demonstrated that physical activity is effective for the prevention of cardiovascular disease, including heart attack, heart failure, high blood pressure, and stroke. As a source for health information in your community, your club is positioned both to educate the public about heart disease and to provide a solution for prevention.

The February issue of “12 Months of Health Promotion” will help you get started, with resources that will enable you to develop a health promotion program, run an awareness initiative, or educate your members on the health benefits of exercise for heart disease.

February resources include:  

  • Medical Wellness Toolkit
  • Building a Health Promotion Program in your Health Club Toolkit
  • “The Health Benefits of Exercise Report” and archive
  • Health-related blog posts to read and share 

“12 Months of Health Promotion” is a monthly series of e-books that will provide information, resources, and ideas to help you capitalize on the communication opportunities available to you in the U.S. and around the world. Look for a new issue at the beginning of each month.

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Friday
Feb052016

How Technology Could Shape the Health Club of the Future

This article is part of a series on technology opportunities for the fitness industry.

Ray O’Connor, owner of the Wisconsin Athletic Club based in West Allis, WI, and an IHRSA board member, is among the more digitally discerning club operators in the fitness industry. He owns seven multi-purpose clubs and manages six corporate fitness centers throughout Wisconsin—all of which he outfits with the latest state-of-the-art fitness equipment. 

O’Connor also has a passion for technology’s potential impact on health clubs. Last March, the 30-year industry veteran attended a tech forum at the IHRSA International Convention & Trade Show in Los Angeles for ideas on how technology can better serve his club’s members. Tech giants Apple, Samsung, and Under Armour also attended the forum. (Preview the technology sessions happening at IHRSA 2016 in Orlando.) 

I asked O’Connor for his thoughts on the opportunities technology provides for better engaging and serving consumers. In short, he envisions many opportunities, but all of them can be grouped, more or less, into three larger buckets. 

Bucket #1: Friction-free Activity Tracking to Motivate Members 

Logging one’s exercise habits is an excellent tool for sustaining motivation, provided that the tracking process is easy. Despite the leaps and bounds engineers have made to create wearables like heart rate monitors, step counters, and mobile apps more user-friendly, O’Connor says there is still room for improvement. 

“Measuring how hard you work out needs to be seamless. Members should barely realize they’re using whatever technology it is they’re using to track their efforts. It should be a part of every day life, like sending an email from your smartphone,” O’Connor says. “For instance, a heart rate monitor is probably the best way to measure how much effort you put into a work out. But the adoption of heart rate monitors by members isn’t 100% because using them can be challenging, either because it’s unfamiliar, awkward, or uncomfortable.” 

There’s good reason to iron out the kinks with wearable heart rate monitors, and similar technology, too. 

“Seamless activity tracking could provide club operators with a wealth of information they can use to educate, motivate, and retain members,” O’Connor says. 

Continue reading "How Technology Could Shape the Health Club of the Future."

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Friday
Feb052016

Health Clubs Report Membership Growth in New IHRSA Survey

Health clubs are growing membership and improving retention, according to IHRSA’s newly released Industry Data Survey, and the accompanying publication, IHRSA Profiles of Success.

The comprehensive, 71-page report provides a detailed analysis of the annual performance of leading IHRSA clubs, providing benchmarks for factors such as retention, nondues revenue, and EBITDA (earnings before interest, taxes, depreciation, and amortization).

The current issue of Profiles is based upon membership and financial data for 2013 and 2014 provided voluntarily by 124 club companies, representing 5,759 facilities. It provides performance indicators for several club types, including fitness-only, multipurpose, independent, and multi-club facilities. There are also breakouts by club size, and by the monthly dues they charge.

Overall, the results are pretty remarkable. 

“IHRSA’s annual Industry Data Survey results indicate that leading club operators continue to play to their strengths, as the respondents recorded improvements in key financial and membership metrics,” said Jay Ablondi, IHRSA’s executive vice president of global products. “This year’s results show that multipurpose and independent clubs reported strong retention results in 2014, while fitness-only and chain facilities posted high net membership growth. Revenue increased for all segments on a year-over-year basis.” 

Here’s a small sampling of the wealth of data contained in Profiles of Success:

  • Membership: The survey respondents reported a net membership growth of 3.7% for 2014, after an annual increase of roughly 3% per year from 2010 to 2013. While revenues per club member fell from $753.60 in 2013 to $702.70 in 2014, overall revenue grew 5.3% for 2014.
  • EBITDA: This metric rose from 15.9% of total revenue for 2013 to 16.6% of total revenue for 2014. Pretax earnings as a percentage of revenue jumped from 6.8% in 2013 to 8.1% for 2014.
  • Retention: Multipurpose and independent clubs reported median retention rates of 69% and 79%, respectively.
  • Net membership growth: Fitness-only clubs reported a median net membership growth of 4.2%, while clubs that are part of a chain achieved a median net membership growth of 9.4%, the highest among all segments.
  • Revenue growth: Fitness-only clubs reported the greatest revenue growth (+8.9%). Multipurpose clubs generated the greatest revenue per individual member ($810.80). Smaller clubs generated less revenue per individual member ($637.50) in comparison with larger clubs ($1,298.60), but achieved greater gross revenue growth (8.2% vs. 3.5%).
  • Enrollment fees and dues: Clubs in the survey reported charging a median of $49 for enrollment fees and $69 for monthly dues. A club member paid a median of $828 in annual dues last year. This annual dues figure represents an increase over the $780 reported for 2013, and is well above the $720 reported for 2012.

Read the full "The State of the Industry" article in the February issue of CBI.

Thursday
Feb042016

2016 Legislative Opportunities: Encouraging Healthy Workplaces and Communities

This post is the fourth in a series of four that demonstrate how IHRSA works to promote legislative opportunities that would increase access to regular physical activity and healthy lifestyles. View the first post herethe second post here, and the third post here.

At many levels of government, lawmakers are recognizing the importance of a healthy, active population. IHRSA has seen a number of cities roll out initiatives designed to help their residents eat better, move more, and pursue a healthier life.

Policies encouraging physical activity in the community are important because physical activity can be a step-by-step process, and initiatives that encourage more walking or active commuting, and that offer fitness classes in public spaces, can move people to a point where they are ready to join a health club.

In Boston, for example, the city promotes its Fitness in the City initiative, which offers free fitness classes outside or in public buildings, while other cities have focused on nutrition labeling, transportation, and improving access to safe spaces for walking. In addition, more business leaders are also recognizing the importance of a healthy, active workplace—more than 400 CEOs have signed the CEO Pledge to make physical activity a priority in their workplace.  

At the state government level, IHRSA has seen a range of bills promoting healthier habits, including public health education campaigns, tax incentives to encourage corporate wellness initiatives for small businesses, financial incentives to encourage healthy behaviors among seniors, and establishment of task forces to research feasibility and effectiveness of health initiatives. These policies will impact health clubs to varying degrees, and IHRSA follows legislation that could have an impact on clubs and drive more members to fitness facilities. 

In 2012, Massachusetts passed legislation instituting a state tax credit to reimburse small businesses for 25% of the cost of implementing a certified employee wellness program, applicable for up to $10,000. Similar legislation has since been passed or proposed in several states, including Wisconsin, New York, Iowa, and Rhode Island. IHRSA supports and advocates for the passage of legislation that encourages employee wellness initiatives and makes them more accessible to small businesses, and works with regulators to encourage the inclusion of physical activity promotion in the definition of a certified wellness program. 

IHRSA is following several bills in 2016 that would promote healthier schools, workplaces, and communities. If you’re interested in pursuing policies to promote physical activity and health in your community, contact gr@ihrsa.org for more information. 

Thursday
Feb042016

Rx for Future Success: Balancing Mission and Margin in Medical Fitness

The health club industry is experiencing growing sophistication with respect to the fitness sciences, increased collaboration with physicians and other healthcare providers, and improved understanding of how to successfully balance the “mission” (member results) vs. “margin” (club profitability) equation.

It’s an eclectic transition, one requiring the participation of a host of parties, including colleges and universities, education and certifying organizations, trainers, club operators, healthcare professionals, health and fitness industry associations, and others.

And the 18 facility, Glastonbury, CT-based Healthtrax not only has success stories to share about the rewarding outcomes possible, but is also a serviceable exemplar. The company was recently awarded the Management Excellence Award by the Medical Fitness Association (MFA), which recognizes outstanding achievements within the medical fitness industry.

Hiring the Right People

Medically oriented fitness centers are sometimes regarded as noble, altruistic ventures that are economically tenuous, but Bob Stauble, the cofounder and chief development officer of Healthtrax, will have none of that. He not only believes that it’s possible to achieve a proper balance of mission vs. margin, but has also demonstrated it—repeatedly. 

Other operators see a dichotomy between mission and margin—between producing solid, positive results for members/patients and what they regard as the industry’s reliance on high-pressure sales and marketing tactics to generate revenues. Such tactics can “smother” a club’s mission, Stauble said.

“It’s all about employing the right people,” he said. “Hiring, training, and keeping the best people—those who strive to excel in all that they do every day— produces great margins without high-pressure sales, and without compromising high mission levels.”

Training the Trainers

The training of trainers—both before and after they’ve been hired by Healthtrax—helps guarantee that it always fields the “best people.” All of its trainers are required to possess a college degree in exercise science, kinesiology, or a related field, and must be certified by the American College of Sports Medicine (ACSM) or the National Association of Sports Medicine (NASM).

These and other education and certifying bodies, such as the American Council on Exercise (ACE), and industry trade groups, such as IHRSA, are also involved in elevating the knowledge and skill levels of fitness professionals so they can operate in increasingly sophisticated, medically attuned environments. Certifying organizations are not only constantly reviewing and, as needed, revising their core offerings, but a growing number are now developing health coaching and other healthcare-based programs.

Collaborating with Physicians

Sometimes, even a thoroughly credentialed and highly regarded personal trainer may not impress a doctor enough to prompt patient referrals.

“They don’t have any way of knowing whether a club is ensuring that their trainers are using what they’ve learned,” Stauble said. “Doctors feel really bad about prescribing treatments that require a patient to write a check for more than their usual copay.”

To overcome these obstacles, Healthtrax implemented a program that works like this: A physician sends a referral form for a patient to the club. The club consults with the patient, and, then, notifies the physician whether the patient has decided to participate in the program. Once enrolled, the patient works with a trainer to formulate a workout plan based on their current health status, the doctor’s recommendation, etc.

The program allays two of a potential referrer’s primary fears. It provides Healthtrax with success stories to present as evidence of the effectiveness of the club and its trainers, and it doesn’t require a significant or long-term financial commitment. 

Read the full "Rx for Future Success" article in the February issue of CBI.

Thursday
Feb042016

How Health Clubs Can Mark World Cancer Day

February 1 marks the beginning of Cancer Prevention Month in the United States, and February 4 is World Cancer Day.

The American Institute for Cancer Research (AICR) estimates that nearly a third of cases of the most common cancers—that's 340,000 cases—could be prevented if people moved more, weighed less, and ate more healthfully. Globally, cancer claims 8.2 million lives every year, 4 million of them prematurely (between the ages of 30 and 69).

World Cancer Day is about raising awareness and education about cancer, and pressing individuals, organizations, and governments to take action.

The History of World Cancer Day

World Cancer Day was established in 2000 at the World Summit Against Cancer for the new millenium in Paris. The Paris Charter, which officially marked February 4 as World Cancer Day, focused on promotion of the research for curing as well as preventing the disease, improving patient service, and raising awareness globally. World Cancer Day is marked every year on the fourth of February.

Get Involved

Health clubs are providing their members the tools they need to prevent cancer everyday—a safe, supportive place to exercise and maintain a healthy weight, and information on good health and nutrition. In 2016, the IHRSA Foundation will work to develop new evidence-based programs for people living with cancer, and to document program best practices.

 IHRSA has joined the AICR's "Together We Can" campaign to help raise awareness about the healthy habits—including regular physical activity and nutritious food choices—that can help prevent cancer. Your club can mark World Cancer Day on social media in a few ways:

Click to download World Cancer Day images optimized for social sharing.Spread the word about the health benefits of exercise for cancer patients and survivors. Click the folder to download a folder of images optimized for social sharing. Share them on Twitter, Facebook, and Instagram! 

Join the conversation on Twitter, Faceook, or Instagram using the hashtags #WorldCancerDay, #cancerprevention, and #WhyGetActive 

Share how your club is helping your community prevent and fight cancer using the hashtags or 

Learn more at worldcancerday.org.

Thursday
Feb042016

IHRSA 2016 Session Spotlight: Discover How to Deliver Quality Member Service

Technological advances are changing how consumers experience health clubs—largely for the good. But implementing new technology in your club isn’t enough to improve customer service.   

“Some clubs are starting to rely too much on technologies and scripting,” says Bill McBride, president and CEO of Active Wellness & BMC3. “These are tools, but service starts with philosophy, hiring, training, and—most importantly—leadership.”

McBride will explain how health club operators should approach technology in a way that enhances the customer experience in his IHRSA 2016 session, “The Service Fallacy: Discover How to Deliver Quality Member Service.”

He suggests that club management set themselves up for success during the hiring process by bringing service-oriented individuals on board. Then, it’s up to leadership to make sure those staff members understand the brand culture and train them on customer service and customer experience.  

“Focus first on foundations,” he says. “Then use technology solutions to support your foundations and belief system of member experience and member engagement." 

Attendees will leave McBride’s Monday, March 21 session with: 

  • Clarity on how to approach service
  • How to use tools to enhance commitments
  • How to create a value system for ROI

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Wednesday
Feb032016

2016 Legislative Threats: AEDs, Privacy, and More

This post is the fourth in a series of four case studies that demonstrate how IHRSA works to protect your health club from legislation that could harm your business. View the first post here, the second post here, and the third post here.

Over the last few weeks, IHRSA has highlighted threats posed by state legislatures to impose restrictions on health club membership contracts, limit access to qualified personal trainers, and to tax healthy lifestyles. While these are some of the issues that are likely to appear in multiple state legislatures, there are a number of other topics that could arise in 2016 and negatively impact your health club.

IHRSA’s Public Policy team has become very adept at predicting where we will fight battles and proactively work to mitigate threats. However, politics is inherently unpredictable, with lawmakers subject to pressure from constituents, current events, and their own ambitions. What follows are a few of the issues that could arise in your state in 2016.

Automated External Defibrillators (AEDs)

Currently, 11 states and the District of Columbia require health clubs to maintain an AED on premises. Given how states often borrow legislative language from one another, it is possible that each of the other 39 states could consider requiring clubs to house an AED at some point. For states that already have a mandate, there exists the threat of the law being changed to increase legal risks for clubs.

In every case, IHRSA works to ensure that bills mandating AEDs provide health club operators and staff with adequate liability protection for both the use and non-use of an AED, contain reasonable staffing requirements, and provide adequate compliance time. Heading into 2016, IHRSA anticipates extra attention will be given to the issue in Connecticut, Georgia, New York, Ohio, and Pennsylvania.

Privacy

Over the last few years, one of the most commonly addressed issues by state legislatures across the country is that of extending civil rights protections to transgender individuals. IHRSA does not view this type of legislation, which grants necessary protections in regard to employment, housing, and education, as a threat.

However, IHRSA is working to educate lawmakers on how these laws uniquely impact health club locker rooms and may expose well-intentioned operators to increased legal risks. IHRSA expects the issue to continue to gain momentum, with a likelihood of every state giving some consideration to transgender rights, if they have not enacted a bill already (17 states have passed laws granting protections in places of public accommodation).

And more…

IHRSA deals with many types of legislation that could impact every aspect of your health club business. Childcare, spas, tanning, liability waivers—you name it. This year, we anticipate childcare and/or kids’ camps legislation in Arizona, California, Illinois, and Minnesota, rules for spas and pools in Massachusetts, and rules for clubs that offer tanning in almost every state. We are also keeping an eye out for proposals that would restrict or prohibit the use of liability waivers in clubs, an issue that could arise in any state in which consumer protection becomes a hot topic.

The best way for you to prepare for any one of these issues, or any other that might arise, is to stay well informed by subscribing to IHRSA’s Legislative Alerts and routinely visiting your state page. Also, if you hear of any other legal or legislative updates going on in your state, please share them with IHRSA and other clubs in your area.

Wednesday
Feb032016

Value Proposition: Visual Fitness Planner

Any truly effective sales process revolves around the presentation. What you put in front of prospective members—i.e., the roadmap to their potential success—is what, ultimately, will help them decide whether to choose your club.

And success is often rooted in what people see; according to a study by researchers at Ohio State University and the Journal of Education, people typically retain only 10%-20% of what they read, but almost 65% of the information they obtain visually.

Daron Allen, the president and CEO, and Mario Bravomalo, the founder, of Visual Fitness Planner (VFP), have spent the better part of the past 15 years creating—and constantly improving on—a technology and data-driven, sales-presentation solution that’s designed to leverage the power of visual learning.

It all started in 1999, when Allen and Bravomalo, who were both working for the Osteopathic Medical Center of Texas (OMCT), an affiliate of the Osteopathic Health System of Texas (OHST), in Fort Worth, developed the prototype for the product that was to become the Visual Fitness Planner.

While difficult to develop, the premise underlying the Planner was relatively simple: write a software program that could produce a visual representation of how a person’s body could change, with exercise, over a period of time. In short: generate digital “after” images before a person had done a single workout.

Since the product’s conception, the Fort Worth, TX-based VFP has evolved in dramatic, transformative ways.

“Today, we harness the power of visual learning, and of our own data, to help clubs map out ideal membership and personal training sales presentations—ones specific to their facilities and customers,” Allen told CBI. “Given the high cost of member acquisition, it’s essential that every presentation be of the highest quality, every single time, when any staffer gives it.”

Read the full "Value Proposition: Visual Fitness Planner" in the February issue of CBI.