The International Health, Racquet & Sportsclub Association is the fitness industry's only global trade association representing over 10,000 for profit health and fitness facilities and over 600 supplier companies in 75 countries.

 

 



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Friday
Nov072014

Investing Revenues Back into Your Club

It is time for the third key stat every gym owner and manager should be aware of. IHRSA blogged about the first two - culled from information from Profiles of Success - earlier this week

Key Stat #3: The top-performing health clubs invest a median of 17.1% of total revenue in club facilities and equipment. 

Overall, clubs that participated in the Industry Data Survey reported investing a median of 5.4% of total revenues back into the club. Investing in capital expenditures not only maintains the club, it can also contribute to an increase in revenues and the bottom line. 

Profiles of Success highlights that profitable clubs reinvest more into facilities and equipment that less profitable facilities. Clubs that reinvested a median of 17.1% of total revenue into fitness equipment, grounds & facility, and office equipment were among the top 25% performers. These clubs reported the following results:

  • Revenue growth of 6.5%, compared with 1.5% for the bottom 25% (who reinvested a median of 1.7% of total revenue).
  • Rate of member retention of 78.5% compared with retention rate of 68.1% for the bottom 25%.
  • Net membership growth of 4.6%, in comparison with 2% for the bottom 25%. 

PREVIOUS BLOG ENTRIES

Key Stat #1 - Lifetime value of a member

Key Stat #2 - Sales and marketing cost per new membership

It’s clear that clubs who invest back into their facilities and equipment perform better than those who do not. New and innovative equipment and programs can play a key role in keeping members engaged and looking forward to what’s next at their club!

For more on IHRSA Profiles of Success, visit ihrsa.org/profiles. Contact research@ihrsa.org.

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