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Wednesday
Dec312014

Club Revenue Up in Q3

From an economic standpoint, the good news continued for IHRSA clubs during the third quarter of 2014. Bottom line: The data revealed that consumers spent more.

As the unemployment rate fell, fees for club dues and lessons, as well as for all items, climbed steadily throughout the summer. In June, for example, the increase in the cost of all items outpaced those for club dues and lessons, while, in July and August, the situation reversed, with dues increasing faster than the price for all items.

Specifically, dues rose by 1.92% in June, by 3.04% in July, and by 1.95% in August. Lesson fees were also rising, as they’ve been doing since March. They were up by 1.62% in June, 1.95% in July, and 1.65% in August, as the momentum continued.

Fees for all items grew by 2.07% in June, by 1.99% in July, and by 1.70% in August.

Should unemployment continue to improve, revenues from fees should, likewise, continue to grow, thanks to the greater disposable income consumers will have to spend on health and leisure activities.

However, as any club veteran understands, the revenue increases experienced this summer represent a distinct departure for the industry. Fee hikes are usually associated with growing demand, reflected by high levels of member traffic and an expanding membership base; historically, though, the summer months tend to be among the slowest of the year for clubs.

According to the IHRSA Industry Data Survey, the results of which appear in the current edition of IHRSA Profiles of Success, the clubs that responded to the survey reported that 2013 was a typical year in that sense—the summer months were, indeed, the slowest in terms of membership growth. But when club operators respond to next year’s survey, the results of which will be published in the 2015 edition of Profiles, the increases they recorded this past summer will finally surface.

In addition to the impact produced this year by a drop in unemployment levels, fee increases during the third quarter might also be weather-related. July was an unseasonably cool month nationwide, and while temperatures rose in August, some parts of the country recorded record rainfall. At a time of year when consumers traditionally enjoy the beach and other warm-weather outdoor activities, some may have delayed their summer vacations or spent them indoors—hopefully, at their health clubs.

For additional information on the figures cited here, please log on to ihrsa.org/research. For more on the IHRSA Health Club Consumer Report, please go to ihrsa.org/consumer-report.

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