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.

 

 



From educational tools and events to promotional programs and public policy initiatives, IHRSA brings you success... by association!

Join | Renew
Pledge Your Support

 
Search IHRSA Blog

Welcome to the IHRSA Blog

The Online Home of IHRSA.org news.

Blog Home |  Subscribe to our RSS Feed

Entries in revenue (10)

Friday
May122017

Selling a Better Life: Where Personal Training Meets Revenue 

The following is an excerpt from “How to Increase Trainer Revenue: Volume 1,” available for free on the IHRSA Exclusive Member Content App.

Few necessities in running a business are as fraught with as many contradictions as “sales.”

As consumers, the term “salespeople” can have negative connotations because of bad experiences in retail and telemarketing. Who hasn’t had a shopping experience disrupted by an aggressive salesperson who shadows you as you browse or badgered you into looking at a more expensive option? 

Continue reading "Selling a Better Life: Where Personal Training Meets Revenue."

Click to read more ...

Tuesday
Feb142017

Transform Your Gym’s Group Training into a Revenue Engine 

This is an IHRSA featured post, brought to you by EXOS.

How to introduce individualization to a class setting for greater results

According to the 2015 IHRSA Health Club Consumer Report, about 43% (two out of five) health club members participate in group training. That equals about 22.1 million members, and that number keeps growing for several reasons...

Continue reading "Transform Your Gym’s Group Training into a Revenue Engine."

Click to read more ...

Tuesday
Aug022016

10 Exciting New Revenue Streams for Health Clubs

“Ancillary revenue.” It’s not a particularly exciting term, but if you’re a health club owner, just the thought of it can raise your heart rate well beyond your training zone.

And for good reason:

“Generally speaking, ancillary services account for a quarter of a club’s total revenues,” said Melissa Rodriguez, IHRSA’s senior research manager. “So operators need to be creative in terms of coming up with new nondues revenue services, and getting members—and nonmembers—to make use of them.”

It’s not a new notion for IHRSA clubs, and, especially in recent years, a fair number have been using them quite successfully. “Many have managed to boost their profitability to pre-recession levels—or even higher—by tapping nondues revenue sources.”

What have they been up to? Club Business International checked in with a host of operators, consultants, and industry suppliers to find out.

NO. 1: A Boutique Within a Club

For an extra $40 a month, a member of GymIt, a high-volume/low-price (HV/LP) bran with two locations in the Boston area, can train like a professional boxer inside a state-of-the-art BOXFIIT modular classroom.

The studio and associated programming are the creation of EveryBodyFights (EBF), a high-end boxing business cofounded by George Foreman III, son of the two-time world heavy-weight boxing champion.

The turnkey EBF studio comes equipped with bags and special lighting and décor, and the classes incorporate patented BOXFIIT techniques developed by Foreman. Clubs pay a monthly licensing fee for EBF, and instructors are BOXFIIT-certified. Certification costs $400, and includes continuing education credits and access to a library of more than 50 hours of video demonstrating 100 custom workouts and 200 boxing moves.

“The BOXFIIT curriculum was designed for members of both genders and of all ages and fitness levels,” said Ben Eld, EBF’s marketing manager. The program, he says, tends to attract individuals 22 to 38 years old, who earn $75,000 to $250,000 a year, and 60% of them are women.

Matthew Harrington, the president of GymIt, explained, “We wanted a way to differentiate ourselves from other low-cost clubs, and to offer a boutique fitness experience at a much more affordable price.”

GymIt offers approximately 30 EBF sessions per week. Members and nonmembers can take classes for $20 each or $140 for 10; members also can pay $40 for an unlimited monthly pass. “We reached 200 members on the monthly add-on pretty quickly following the launch,” said Harrington, “so we’ve seen a pretty significant increase in our nondues revenue.”

Continue reading "10 Exciting New Revenue Streams for Health Clubs."

Click to read more ...

Tuesday
May172016

How Giving Personal Trainers Strategic Goals Drives Health Club Revenue

Personal training programs can be a huge profit-driver for health clubs, but many clubs aren’t maximizing the revenue opportunities for a number of reasons, says Luke Carlson, CEO of Discover Strength in Chanhassen, MN. 

“In all service-based businesses, we really have to make sure we have the right people—but the importance of having the right people is amplified when its such an intimate relationship, like with personal training,” he says. “We need to have mechanisms in place to make sure our people component is strong.” 

Giving Personal Trainers Strategic Context 

One of those mechanisms Carlson employs is a quarterly conversation that managers have with personal trainers to help them work toward organizational strategic goals. During those meetings, managers and trainers discuss three critical points:  

  • The trainer’s embodiment of the club’s core values
  • Specific feedback regarding the trainer’s performance around their key roles
  • The trainer’s progress on their quarterly objectives or priorities  

“So many trainers are coming to work everyday trying to give good customer experiences, but don’t know from managers or leaders what to do to drive the whole organization forward,” he says. “These conversations provide trainers with that strategy in the context of the personal training department.” 

Examples of Quarterly Objectives for Personal Trainers 

A strategic quarterly objective might be for each trainer to reach out to clients that haven’t been to the club for three months and recapture 10 of them. 

“If we assign that objective to four or five trainers and they achieve it, we just got 40 or 50 clients back in the door,” Carlson says. “So no objective is more important for that trainer to be doing in those 90 days.” 

Another quarterly objective might be for trainers to recruit clients to join a specific club program. 

Take, for example, a new personal training program geared toward brides, grooms, and wedding parties looking to get in shape ahead of the big day. The program may be marketed in the club and on social media, but tasking individual trainers to recruit members “brings it down to the ground,” Carlson says. 

“We look at what the whole department and club needs to accomplish and just assign those quarterly objectives to each trainer,” he says. “By doing that, strategic goals become very bite sized.” 

Learn More Personal Training Program Strategies at the IHRSA Institute

Carlson will go even more in depth on those strategies and more during his IHRSA Institute session, “Personal & Group Training Management.” The Wednesday, August 3 presentation will feature 10 tools and mechanisms that will drive performance for the whole personal training department. 

“I’m going to talk about how we really need to look at the department—not only how do we become better at personal training, but how do we become better managers, leaders, and business people,” Carlson says. 

Learn more about the IHRSA Institute, August 2-5 in Chapel Hill, NC.

Monday
May162016

IHRSA Report: Health Clubs Saw 5.3% Revenue Growth from 2013 to 2014

This feature is brought to you by the IHRSA Store spring sale. Now through June 30, save 25% on reports, webinars, and all other resources in the IHRSA Store by using promo code 2016SALE at checkout. 

Overall, health clubs posted revenue growth of 5.3% from 2013 to 2014, according to our 2015 Profiles of Success report. 

Multipurpose and independent clubs reported median retention rates of 69% and 79%, respectively. Fitness-only clubs reported a median net membership growth of 4.2%, while clubs part of a chain achieved a median net membership growth of 9.4%—the highest among all segments observed. 

"IHRSA's annual industry data survey results indicate that leading club operators continue to play to their strengths as 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 multipurpose and independent club reported strong retention results in 2014, while fitness-only and chain facilities posted high net membership growth. All segments increased revenue on a year-over-year basis.” 

The report provides a detailed analysis of the annual performance of leading health and fitness clubs, including key performance metrics such as revenue and membership growth, payroll, member retention, non-dues revenue, and EBITDA. Profit center analysis as well as income statement and balance sheet data are also provided. 

Additional key findings include:  

  • Fitness-only clubs reported the greatest revenue growth across all segments by club type (+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%).
  • Total payroll claims a median 39% of total revenue for all responding clubs. 
  • Clubs reinvested roughly 3% of total revenue into fitness equipment.
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.

Thursday
Apr042013

Industry looking positive according to IHRSA Index

For the third consecutive time, year-over-year performance has improved, according to IHRSA Index results. 

IHRSA Index shows the financial performance of the commercial health club industry.

The Index results for the quarter ending Dec. 31, 2012, and year-end were released on March 28.

Read on for the rest of the story.

Thursday
Feb282013

Life Time Fitness sees fourth quarter, year-end revenue increases

Life TIme Fitness announced its achieved double-digit increase in its fourth quarter and year-end financial results.

Revenue for the fourth quarter finished at $275.3 millon, a 9.7% increase from last year's $250.9 million; end-of-the-year revenue for 2012 came in at $1.127 billion, an 11.2% increase from $1.014 billion.

“For 2012, I am pleased to report double-digit growth in revenue, operating profit, net income, and earnings per share,” said Bahram Akradi, chairman, president and chief executive officer, in a press release on the Life Time website. “We also saw total-center revenue growth above 10%, along with solid revenue-per-membership and same-store-sales."

For more, click here.

Monday
Dec032012

Learn ways to increase non-dues revenue with this week's webinar

Are you looking for new ways to generate revenue, outside of what you take in from dues?

This week's webinar, "Growth By Numbers: Strategies to Increase You Non-Dues Revenue," might just give you the ideas you haven't thought of, and ways to execute them.

Bonnie Patrick Mattalian, vice president of MediFit, will be the presenter of the webinar, which is Thursday, Dec. 6, 2-3:30 EST. The topics she will touch on include:

  • Understand how to define your target market to determine what programs and services will appeal to those groups;
  • Identify how to set pricing, effectively market and sell to various types of potential participants;
  • Discover multiple ways to ensure participants sign up for and are engaged in ancillary services;
  • Identify current and upcoming trends in the industry around ancillary services and programs;
  • Explore case studies to give real life ideas on successful program and service implementation strategies.

For more information and to register for the webinar, sponsored by Cybex, click here.

Monday
Nov022009

Personal Training Revenue

This week, experts Barry Klein and John Atwood discuss what percentage of a club's revenue should come from personal training:

Q: “In a fitness center only club of 8,500 sf with a beginning membership of 1,000 and membership of 2,000 when mature, what is the benchmark percentage of revenue between membership fees and personal trainer fees?”

A: The target membership vs. non-membership revenue for most clubs is generally 80%-20%. For most small clubs, personal training is the key non-dues revenue source, so – assuming there might be health bar, pro shop, tanning, etc. – at least 15% of revenue will need to come from personal training.

However, specific circumstances need to be considered. An 8500 square foot club that already has 1000 members is at reasonable capacity. Growing to 2000 members implies a facility with a low price point whose success is predicated on an abundance (over abundance?) of members. It’s difficult to imagine such a club having a clientele that would lend itself to the target split of 80/20 dues vs. non-dues. Personal training might just be a “cherry on top”.

By comparison, an 8500 square foot facility with only 500 members would likely be much more dependent on personal training and other non-dues sources. At 1000 members, it seems a 15% target would be reasonable. Indeed, much more could be possible. But, to grow to 2000 members, it seems that the energy and investment of the club would have to go toward that growth, and personal training might have to take a back seat.

Barry Klein, Owner
Elevations Health Club
barry@elevationshealthclub.com
www.elevationshealthclub.com

A: The benchmark for all clubs non-dues revenue has hovered around 30%, with 10.7% for clubs less than 20,000 feet, and 8.1% for fitness-only clubs.

The personal training piece of this shows high end clubs reporting 10%-15% of total revenue coming from personal training, while the all clubs sample shows 3%-11%; and among fitness-only clubs 6%-14%. Keep in mind that these numbers represent a fairly small sample group and include only clubs that have their act together enough to keep and report their numbers.

Personal training should be the largest piece of your non-dues revenue equation If you plan to have personal training as a major focus in your club then these numbers fall short for you. You really need to know what the benchmark would be for clubs that are your size, demographic, fitness-only, and focus on personal training. Clubs that focus on personal training of course do much bigger PT numbers and the benchmark, if it were available, would reflect that.

Personal training should be the largest piece of your non-dues revenue equation and as a goal I would recommend that you shoot for 15-20% of overall revenue from personal training.

One concern regarding your club model is that 2000 members in an 8,500 square foot club is a stretch, and if you hit 2,000 there may not be space for multiple trainers, with multiple clients, using the fitness area along with all the regular members.

John Atwood, Principal
Atwood Consulting Group

508-654-6244
john@atwoodconsultinggroup.com