As a slumping economy and worries about job losses cause more stress in our lives, people are trying harder to balance their physical and fiscal health. Can you afford to keep that health club membership? Can you afford not to? It may seem insignificant in the face of such weighty matters, but exercise can help you weather the stress of hard times and local health clubs want to make sure you’re getting your money’s worth.
Health clubs have historically fared well during economic downturns. This time around the results seem to be mixed. A recent survey by the American Heart Association found that 57 percent of respondents said the economy had impacted their ability to pay attention to their health and 25 percent had cancelled their gym or health club memberships in the past six months.
Another recent study conducted jointly by Opinion Research Corporation and Anytime Fitness found that 60 percent of fitness club members nationwide plan to keep their current membership despite the economic downturn, 23 percent plan to join more affordable gyms, and 17 percent plan on dropping their memberships.
2009 Not So Bad
Luckily, the northshore is blessed with above-average incomes and below-average unemployment, making the health club picture here a bit healthier. “I don’t think there’s any business that’s recession-proof, but we’ve actually had a decent year with increases in both membership and revenue,” said Dion Grossnickle, General Manager of Cross Gates Family Fitness in Slidell.
“We have only seen positive growth and have netted new members every month. But we did see the numbers slow toward the end of the year,” said Olaf Ross, Owner of North Cypress Fitness in Hammond. This growth is likely due, in part, to moving from a 10,000 square foot facility in downtown Hammond to a 32,000 square foot facility on six acres just a year and a half ago. “That’s the beauty of where we are. We’re the largest and only full-service club in the parish,” he said.
Don’t think local health clubs aren’t concerned though. Not all clubs in the area reported membership growth in 2009. In fact, most clubs said their membership numbers were flat for the year. The industry has also changed radically in the past few years, with the proliferation of small, 24-hour fitness clubs that are now almost as plentiful as coffee shops. The market is saturated with health clubs large and small, giving members more choices than ever.
Customer Mindset is Key
“The economy has drastically changed the way we do business. We’re concentrating more than ever on member retention,” said Ross. And retaining those members has everything to do with customer mindset. That mindset seems to revolve around three things: the importance of health and fitness as a necessity, not a luxury; getting the most value for the money; and fighting off boredom.
“People are valuing and understanding the importance of their health,” said Sandy Franco, Owner of Franco’s Athletic Club in Mandeville. This is evidenced by the fact that most local clubs reported an 8-12 percent upswing in club visits for 2009. “Members are using the club more, that’s a good sign to me,” she said.
Although members may be using the health club more often, they’re spending less money when they do. All local clubs reported a downward trend in revenues for ancillary services like juice bars, restaurants, coffee shops, spas, and pro shops. Even though revenues for these ancillary services are down, clubs continue to offer more of them to their members. “We’re adding things so people can spend more time here,” said Grossnickle, whose Cross Gates club added spa services to their lineup last year.
Something for Everyone
“Members are expecting more and deserve to get what they expect – otherwise they may decide to cut club membership out of their budget,” said Lara Newman, Membership Services and Marketing Director for Pelican Athletic Club in Mandeville. “People are pinching their pennies more, they’re looking for more bang for their buck,” said Ross.
Well, you asked for it, you got it. Today’s health clubs are more resort than fitness center. There’s really no need to ever go anywhere else and that’s just what club owners are aiming for. “There’s something for everyone to do and you never get bored,” said Ron Franco, Owner of Franco’s Athletic Club.
This fits right in with the recent trend to take “staycations” instead of expensive vacations. “This past summer, we were their vacation,” said Franco. And why not? For the price of a 3-day vacation at Disney, you can get a whole year’s worth of membership for the family that includes swimming, tennis, and a seemingly endless array of fitness classes and equipment.
And this doesn’t even take into account the social aspects of a health club membership. “This is where their friends are. Everyone has friends that are members of Cross Gates,” said Grossnickle. “We’re not in the health club business, we’re in the entertainment business,” he said.
But Wait, There’s More
Most companies tend to make cutbacks when hard times hit, like when the airlines stopped serving meals and snacks and started charging for bags. But this is certainly not the mentality of the health club industry locally. In fact, they are doing just the opposite – investing in their clubs.
“We’ve had to get creative and put more value in our memberships,” said Newman, who notes that Pelican Athletic Club has focused on adding more free classes and training this past year with things like “Spin University”, a free 4-week indoor cycling program; “FIT Swim”, a free 1-week introduction to swimming fitness; and “Quick Start”, a free 4-week program that featured two 30-minute group training sessions, a cardiovascular interval training session, and six 45-minute educational seminars with a nutritional counselor and personal training director. “The main reason why people come to, and stay with Pelican is our programs,” she said.
Other clubs are focusing on facility upgrades, with Holiday Fitness (previously Downtown Fitness in the Holiday Inn, Covington) adding a nursery and all new cardio equipment in 2010. North Cypress in Hammond has plans for doubling the number of tennis courts from four to eight and adding outdoor seating and covered areas, as well as more outdoor programming. Cross Gates is currently adding new equipment and a cardio entertainment center.
“We’re focused on spending money now. Whoever invests now in their business, if they can stick it out, will be doing great when the economy bounces back,” said Grossnickle.
That’s exactly what Franco’s is hoping for as they forge ahead with plans to build a brand new, full-service health club in north Covington that’s been 10 years in the making. Plans for the 75,000 square foot club utilizing the latest in green engineering are 80 percent complete. “We’re hoping to get started in the next 90 days and would like to finish within 14 months of breaking ground,” said Ron Franco.
“We feel the population in Abita, Bogalusa, Folsom, and downtown and north Covington can support a new club. Not only that, they need a club, a meeting place for families and friends to be together and spend time together. We’re hoping our timing will coincide with an economic turnaround,” he said.
Keeping Them Coming Back for More
Health clubs are constantly searching for ways to keep people engaged and interested in exercising. The primary reason people let their memberships lapse is non-use. “We fail if they pay their dues and never show up. We want to make sure they come and use the club and tell others about it,” said Grossnickle.
The top trend in fitness is group personal training. People want assistance, but many cannot afford a personal trainer. The answer is small group training and local clubs have jumped on the bandwagon in a big way.
North Cypress and Cross Gates are both launching a military-style TRX (Total-body Resistance eXercise) Suspension Training program in January. Cross Gates has hired new fitness coaches and is even constructing a new building that will be solely devoted to their “Cross-Fit Crusade”. “It’s cost-effective for the member, there is motivation and accountability, and people are seeing incredible results,” said Grossnickle.
Franco’s will debut a new program in February that takes the concept of the Biggest Loser and PX-90 and give you the “best of both worlds”, according to Sandy Franco. The PX-90 workout uses the training science of muscle confusion. By constantly introducing new moves and routines, every stage becomes as effective as the first. “You will have the accountability and the support that you need. Nutritionists will be on staff, workouts will be given, and results will be measured,” said Franco.
Afraid of Commitment?
In addition to the usual January specials for new members, many clubs are offering creative payment options to address economic worries. “People are afraid of commitment, so we will be offering a month-to-month payment option, as well as a variety of other payment options to best suit people’s circumstances,” said Sandy Franco.
There’s never been a better time to become a health club member than now. Health clubs are working harder than ever to get and keep you as a member by offering more value for those membership dollars than ever before.
“People are generally tired of the doom and gloom. It’s based on what you value, and if fitness is important to you, you’ll choose to keep it,” said Ross.
“People don’t want to feel guilty about their purchases. They want to buy something they can feel good about. That’s why I see it turning around quickly for us because a health club membership is something that you can feel good about. It’s a great investment with a great return,” said Franco.
“You have to be the biggest value in their life. You need to make sure people can’t live without you,” said Grossnickle.