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BUSINESS PLAN
Your Name Example
Founder
Your Email Address
P: Your Number
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TABLE OF CONTENTS
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EXECUTIVE SUMMARY
COMPANY VALUES
COMPANY SERVICES`
COMPANY OPERATIONS
TARGET MARKET/MARKET ANALYSIS
MARKET SEGMENTATION
MARKETING STRATEGY
MANAGEMENT PLAN
PERSONNEL PLAN
COMPETITORS
PROJECTED LOCATIONS
PROJECT START UP EXPENSES/FINANCIAL NEEDS
SWOT ANALYSIS
PRICING STRATEGY
SHORT/LONG TERM GOALS
ASSUMPTIONS
FINANCIAL PROJECTIONS
MARKET RESEARCH
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EXECUTIVE SUMMARY
Organized recently as a start-up company by founder <<INSERT NAME>>, Box1 Sports Center was
established with the vision of becoming a full-service, state-of-the-art, multi-sport complex. Situated in the
Killeen/Harker Heights area near Fort Hood, the Box1 Sports Center is uniquely positioned to capture an
underserved marketplace for athletic facilities in the central Texas region. Once established, the Box1 Sports
Center will be recognized as a pillar that promotes social and economic development within the city and
surrounding communities.
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According to research obtained from IBIS World, over the next five years, the Gym, Health and Fitness Clubs
industry will lift itself to success, benefiting from the revitalization in consumers’ discretionary spending. As
consumers’ disposable income rises, more individuals will purchase gym memberships that include a plethora
of amenities, compared with low-cost memberships with few amenities that have fared well over the previous
period. Moreover, while many individuals will be time-strapped over the period, which may constrain demand
for gym memberships, this trend will be offset by growing demand for results-driven gyms that can help
individuals achieve fitness goals in shorter time increments.
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For example, personal and group trainers, as well as fitness classes, will be popular. In the five years to 2019,
revenue is forecast to grow at an annualized rate of 2.8% to $30.5 billion due to more consumers purchasing
high-cost industry services, such as cohesive, individualized health plans that include trainers and nutritional
guidance. Profit is also expected to slightly rise from 8.6% of industry revenue in 2014 to 8.9% in 2019, as
many gyms offer more high-margin services, such as group personal training sessions, to strengthen their
product portfolio and bolster member retention rates.
MISSION STATEMENT
VISION STATEMENT
Our Mission Is To Provide A
Our Vision Is To Be
Fun, Safe, and Family-
Recognized As The Premier
Friendly Environment To
Athletic Facility of Choice For
Patrons Located Within The
Patrons In The Central Texas
Central Texas Area.
Region.
Box1 Sports Center
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COMPANY VALUES
Below is an overview of the company’s values that guide the way we conduct our business operations:
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CORE VALUES
 Professionalism: Providing services and support that are in line with acceptable standards and metrics
 Quality: Maintaining facilities, equipment and ammenities in such a way that exceeds our customer’s
expectations
 Integrity: Conducting business in an ethical manner that is above reproach
 Customer-Oriented: Going above and beyond to satisfy our customer’s requests.
Box1 Sports Center
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COMPANY SERVICES
Overview
The vision is for the Box1 Sports Center to be a multisport complex that provides its clients with various
services. A first class fitness and lifestyle center, one full-size basketball court that can also accommodate
many other sports (i.e. volleyball, indoor soccer, etc.), a nutritional food and beverage/lounge area, a lobby,
and other amenities such as an administrative office, male/female restrooms, and a childcare center will all be
available in the facility. Along with these amenities, Box1 Sports Center will provide its clients with qualified
and knowledgeable staff to make sure all of their sport and fitness needs are met satisfactory.
Interior
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The interior of the Box1 Sports Center shall include the following:
1 Full-Sized Basketball Court/Indoor Volleyball Court with multiple baskets
(Approximately 5k sq ft.)
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Supervised childcare for members and non-members while working out; providing a wealth
of activities for children under ten.
State-of-the-Art equipment, free-weights, machines, and cardio equipment with satellite-linked
TVs helping to reach your goals in style.
Box1 Sports Center
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Optional assistance of nutritionists, dieticians, personal fitness trainers, sports-specific
workout and ability trainers to maximize the effectiveness of your hard work.
Food and beverage snack area for patrons to refuel and re-energize before and after
their intense workout sessions. Open from 8:00am to 8:00pm
Box1 Sports Center
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Hours of Operation
Box1 Sports Center will remain open 24 – 7 except for federally recognized holidays.
Other Key Items
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Company Operations
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Box1 Sports Center will also provide the following:
 Facilities and amenities that are ADA& Veteran Accessible.
 Open Gym time for sports specific recreation.
 Specialized Training for athletes who want to improve their skill level.
 Snack Bar/Nutrition Area: 8am – 8pm
 Temporary Daycare accommodations for members and non-members.
 Complimentary Self-Parking and Valet Parking for Special Events.
 Complimentary Wi-Fi. & Utilities
 Marketing & Sponsorship Opportunities.
One full-sized basketball/Indoor Volleyball courts will highlight the main floor of Box1 Sports Center. Along
with these two sports, the floors will be able to accommodate badminton, indoor soccer, dodgeball, touch
football, gymnastics, dance, aerobics, and more. These hardwood courts will be manufactured and installed by
the industry leader, Robbins Sport Surfaces, and will be the premier sports floors in all of Central Texas. With
the added attraction of world class portable basketball systems from JustBasketballGoals or Schelde North
America, Box1 Sports Center will quickly become known as the place to be for leagues, camps, or pick-up
games.
With his/her education and vast experience in this area, the scheduling of events and activities on these floors
will be conducted by one of the fitness center managers of Box1 Sports Center. The development of sports
leagues, camps, and clinics, along with other various day-to-day operations of the facility will also be the
manager’s responsibility.
Box1 Sports Center will house a large fitness and lifestyle center that will match or exceed any other in the
city. This fitness and lifestyle center will include top-of-the-line equipment in free weights, machine weights,
and aerobic machines. This aspect of the facility will be run by a certified strength and conditioning specialist
(CSCS) who will hire and train his/her staff to meet the demands of the members. This person will report to
and work directly with the general partner of Box1 Sports Center and his/her duties will include, but will not
Box1 Sports Center
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be limited to, general supervision, personalized training for members, program development for camps and
clinics, and aiding in the marketing and promotional aspects of the facility.
On the lower level surrounding the courts there will be a food and beverage area where clients of the facility
can replenish their bodies. This area has been placed on the lower level so the clients may have an up-andclose view of the activities on the courts while enjoying their favorite nutritional beverage and/or snack.
Included in this area will be various big screen TVs that will show either sporting events, sports news, or realtime on-court activities that clients can enjoy. This aspect of the facility will be crucial in providing the
desired atmosphere Box1 Sports Center hopes to create.
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A qualified, experienced person will be hired to run this aspect of the facility. He/she will have the
responsibility to meet necessary standards and to report to, and work directly with the general partners of Box1
Sports Center to make sure the needs of the clients in this area are met satisfactory. If additional staff are
required, this person will hire and train those people in accordance with Box1 Sports Center policies.
Other features and services Box1 Sports Center will have include:
1. Full-service restrooms for both men and women. Large benches and sinks facilities will all be included
as well.
2. A childcare area that will allow members and non-members to access the facility at their convenience.
The childcare will be on the first level of the complex and have a large play area that will be
continuously monitored by our certified childcare staff. The staff will be responsible for the care and
well-being of the children they are watching, along with providing a fun and interesting environment
for the children. This service will be offered facility members and non-members for a very minimal
fee.
3. An administrative area housing various offices and a conference room will be located on the main floor
of the facility.
4. A pro shop will be strategically placed in Box1 Sports Center to attract impulsive buyers. Clients will
pass through the pro shop upon entering and exiting the facility. The pro shop will sell our own line of
products and eventually sports shoes and apparel that will be available exclusively at Box1 Sports
Center. The manager will be in charge of inventory for the pro shop, and general staff will be involved
in the daily sales and service.
Box1 Sports Center
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TARGET MARKET/MARKET ANALYSIS
The proposed location for the Box1 Sports Center is the city of Killeen TX, a municipality consisting of a
dense population of past and present military members due to the presence of the Ft. Hood installation.
Our facility intends to serve patrons residing within Bell County and surrounding communities.
Our target customer profile consists of residents with a combined household income of a minimum of $50,000
or more. Based on the demographic of Bell County, our target customer profile is well represented in this
market. Below is a market analysis of our target customer area (research obtained from City of US CENSUS)
Bell County Demographic Analysis
People QuickFacts
Bell County
Texas
NA
326,843
310,235
NA
5.4%
310,235
8.8%
27.8%
9.5%
50.0%
26,956,958
26,505,637
25,146,104
7.2%
5.4%
25,145,561
7.3%
26.6%
11.2%
50.3%
White alone, percent, 2013 (a)
Black or African American alone, percent, 2013 (a)
American Indian and Alaska Native alone, percent, 2013 (a)
Asian alone, percent, 2013 (a)
Native Hawaiian and Other Pacific Islander alone, percent,
2013 (a)
Two or More Races, percent, 2013
Hispanic or Latino, percent, 2013 (b)
White alone, not Hispanic or Latino, percent, 2013
68.2%
22.4%
1.1%
3.2%
0.8%
80.3%
12.4%
1.0%
4.3%
0.1%
4.3%
23.2%
48.9%
1.8%
38.4%
44.0%
Living in same house 1 year & over, percent, 2009-2013
Foreign born persons, percent, 2009-2013
Language other than English spoken at home, pct age 5+,
2009-2013
High school graduate or higher, percent of persons age 25+,
2009-2013
Bachelor's degree or higher, percent of persons age 25+, 20092013
Veterans, 2009-2013
76.9%
7.7%
17.4%
82.8%
16.3%
34.7%
89.5%
81.2%
21.7%
26.7%
43,424
1,583,272
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Population, 2014 estimate
Population, 2013 estimate
Population, 2010 (April 1) estimates base
Population, percent change - April 1, 2010 to July 1, 2014
Population, percent change - April 1, 2010 to July 1, 2013
Population, 2010
Persons under 5 years, percent, 2013
Persons under 18 years, percent, 2013
Persons 65 years and over, percent, 2013
Female persons, percent, 2013
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Mean travel time to work (minutes), workers age 16+, 20092013
Housing units, 2013
Homeownership rate, 2009-2013
Housing units in multi-unit structures, percent, 2009-2013
Median value of owner-occupied housing units, 2009-2013
Households, 2009-2013
Persons per household, 2009-2013
Per capita money income in past 12 months (2013 dollars),
2009-2013
Median household income, 2009-2013
18.9
25.0
131,394
56.7%
25.9%
$122,600
104,049
2.95
$22,857
10,255,642
63.3%
24.2%
$128,900
8,886,471
2.82
$26,019
$50,060
$51,900
15.3%
17.6%
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Persons below poverty level, percent, 2009-2013
Our target customer consisting of households
with a median income of over $50,000 is wellrepresented in Bell County.
Additionally, our target customer consisting of
individuals between the ages of 18 and 65
represents approximately 62% of the population,
which adds up to 202,642 target customers!
Box1 Sports Center
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MARKET SEGMENTATION
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Over the past decade, the industry has experienced substantial growth in demand, and as a result, the
breakdown of the industry’s markets have also changed. The aging population has encouraged health and
fitness clubs to widen their target demographic beyond the traditional market of 18- to 35-year-olds. Industry
operators are increasingly expanding their target market to include 35- to 54-year-olds and individuals aged
under 18. The majority of gym and health club members are female, which account for about 57.0% of all
gym, health and fitness club memberships and have increased in recent years.
Consumers aged 35 and older
The central characteristic of the Gym, Health and Fitness Clubs industry has been the growth in the population
of older members who are joining health clubs. In 2014, IBISWorld estimates that there will be 54.1 million
health club members in the United States. Additionally, about 20.0% of these members will be older than 55,
which signifies the trend of older individuals increasingly implementing active lifestyles.
The industry has also grown significantly within the 35-to-54 age group, with an estimated 13.4 million health
club members (24.8% of the market). The two segments identified can be generally grouped within baby
boomers and generation X profiles. There are about 120.0 million people within these age categories,
accounting for more than 35.0% of the total US population. These segments continue to drive growth in
membership numbers and participation in sport and fitness activities. During the next five years, demand for
industry services from this major market will increase due to a greater proportion of individuals comprising
this age demographic.
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Consumers aged 18 to 34
This age category accounts for the industry’s largest market segment, with an estimated 5.0% market share.
Despite its size, this segment has shown little growth over the past decade, compared with other age categories.
While this demographic is expected to include 10.5 million individuals, this market segment has experienced
slow growth during the past five years. Slow growth can be attributed to this market segment’s strong, yet
stable, demand for fitness options. Furthermore, other fitness activities, such as team sports, have cut into this
market segment’s demand for gym memberships.
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Consumers aged 17 and younger
The 6-to-11 and 12-to-17 demographics are expected to account for 4.0% and 8.0% of market share,
respectively. Growth within these areas (particularly the latter) has been strong over the past decade, as the
echo boom generation (children of baby boomers) has increased in size. Additionally, many parents have been
increasingly purchasing health club memberships for their children in response to rising child obesity rates.
Youth memberships have become one of the fastest growth areas for the fitness club industry, and many clubs
are shifting their focus to target this market segment. Moreover, many school programs, in response to state
budgetary issues, have cut back on physical education classes, which has caused many parents to purchase
alternative fitness options for their children.
MARKETING STRATEGY
Below is an overview of the Box1 Sports Center’s Marketing Plan:
Step 1: Our company shall develop a website to establish a presence on the internet to attract customers.
Step 2: Our company shall establish a profile across various social media platforms to attract and market to
potential customers (facebook, twitter, etc.)
Step 3: Our company shall place ads in various publications (newspapers, magazines, print media, etc.)
Step 4: Our Company will join and participate in networking events, chambers of commerce, and trade
organizations in an effort to build relationships.
Step 5: Our company shall advertise through the purchase of media (radio spots, TV commercials, etc.)
Box1 Sports Center
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MANAGEMENT PLAN
The following diagram highlights the company’s proposed management structure:
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ORGANIZATIONAL STRUCTURE
CEO–Mr. Phillip Smith
-Oversee day to day operations of the company
-Oversee company finances/budgeting
-Purchasing equipment and supplies
-Human Resources: Hiring, Firing, Employee Performance Reviews
-Advertising/Marketing – Business Development
Bookkeeping/Payroll Firm
-Assists in preparing/overseeing the company’s financial records
-Prepares financial reports
-Administers company’s payroll
-Compiles company’s tax returns
Box1 Sports Center
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PERSONNEL PLAN*
Below is a summary of the company’s initial projected personnel plan:
Title
CEO
Food Service Mgr
Food Service Support Staff
Fitness Center Mgr
Fitness Center Support Staff
# of
Employees
1
1
3
1
8
Annual Salary
Total Salary
$50,000
$40,000
$20,000
$40,000
$30,000
$50,000
$40,000
$60,000
$40,000
$240,000
COMPETITORS
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*Fitness Center Based on 24 hour operations
*Food Service Based on 12 hour operations (8am-8pm)
$430,000
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TOTAL ANNUAL SALARY
Below are a list of potential competitors that are currently located within 15 miles of our projected location:
COMPETITOR ANALYSIS
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Key Competitors
1) Anytime Fitness: http://www.anytimefitness.com/gyms/3424/Copperas-Cove-TX-76522
Description: Anytime Fitness of Copperas Cove , TX, is the fitness center that fits your on-the-go
lifestyle. At our Copperas Cove, TX, health club, patrons you can exercise any time using their own
security-access key 24 hours a day, 7 days a week, 365 days a year. Amenities include private showers,
personal trainers, HD TVs, and scheduled workout classes.
Address: 3010 E U.S. 190 Copperas Cove, TX 76522 United States
2) Cove Fitness: http://www.covefitnesscenter.com/
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Description: Cove Fitness is a full service health club that combines a full range of fitness and
exercise equipment and facilities with professional trainers, personally tailored programs, and group
exercise classes. Open from 5:00am to 10:00pm, Cove Fitness has a 20,000 square foot facility and
offers the following amenities top of the line equipment, saunas, whirlpools, tanning beds, and a juice
bar.
Address: 1013 W Hwy 190 Copperas Cove, TX 76522 United States
3) Gold’s Gym: http://www.goldsgym.com/killeentx/
Descrption: Gold’s Gym Killeen in Killeen, TX stocks the very latest cardio equipment, such as
elliptical machines, stair climbers, rowers, treadmills and stationary bikes as well as a full sets of free
weights and high tech strength training equipment. They offer options for every fitness level, from
beginning exercisers to elite athletes looking to sharpen their speed, agility, power and endurance. They
offer a number of workout classes and group training sessions for patrons on a daily basis.
Address: 902 W Central Texas Expy Killeen, TX 76541 United States
4) Family Recreation Center - Lions Club Park: http://www.killeentexas.gov/index.php?section=64
Descrption: City owned and operated community center featuring a fitness center, fitness classes,
family activities, etc (not 24 hours operated).
Address: 1700 E Stan Schlueter Loop, Killeen, TX 76542
Box1 Sports Center
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PROJECTED LOCATIONS
Below are a list of possible locations for our facility in the Killeen TX area consisting of approximately 2-3
acres of available land:
1110 Old FM 440
1110 Old FM 440, Killeen, TX 76549
$195,000
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1.20 AC | Land
Description
Great location for retail, automotive, or special use. Concrete parking lot on the front.
Located West of Hwy 195, Ft. Hood St., between the South access road and Pershing Dr. The lot is behind the
Vet Clinic on Pershing Dr.
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1.46 Acres on Stan Schlueter Loop
Stan Schlueter Loop & Bridgewood Dr, Killeen, TX 76542
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$254,390
1.46 AC | Land
Description
Property is on the corner of Stan Schlueter Loop and Bridgewood Drive. The site has been filled. Cross access
across the corner lot-planned Dollar General on the corner.
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The site is located on the corner of Stan Schlueter Loop and Bridgewood Drive in Killeen, Texas.
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4701 Trimmier Rd., Killeen, TX 76542
Price Not Disclosed
1.50 - 7.93 AC | Land
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PROJECT START UP EXPENSES/FINANCIAL NEEDS
Below is stated estimation of our projected financial needs for the startup of this company:
Projected Need
Projected Start Up Expense
Land Acquisition:1-2 acres
Design & Building Construction To Specifications
(10,000 sq ft at $105/sq ft)
Furniture/Fixtures/Equipment/Amenities
Signage
3 Months of Payroll
Initial Food Inventory/Beverages
Professional Services (bookkeeping/payroll/consultants)
Advertising/Marketing (website, print material, Media Spots etc.)
6 Months of Insurance ($500/month)
Supplies
Office Expenses
Phones/Internet
Uniforms
SUBTOTAL
Working Capital/Unplanned Expenses (5% of subtotal)
TOTAL START UP EXPENSES
$250,000
$1,050,000
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$450,000
$10,000
$107,500
$7,000
$20,000
$20,000
$3,000
$3,000
$5,000
$5,000
$1,500
$1,932,000
$96,600
$2,028,600
SWOT ANALYSIS
STRENGHTS
 Premier Fitness Center Amenities
 State of the Art Equipment/Facilities
 Multiple Activities Housed Under One Roof
OPPORTUNITIES




Capitalizing on an Underserved Market In Killeen
Offering Discounts To Attract Military Customers
Hosting Athletic Leagues, Birthday Parties, Events
Increasing Population Trend In Central Texas
Box1 Sports Center
WEAKNESSES
 Lack of Brand Recognition
 Limited Capital
 Limited Market Share
THREATS
 Increased Competition From Cheaper
Alternatives
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PRICING STRATEGY
Below is a proposed listing of our company’s pricing:
Annual Membership Fee
Family
$1,440 ($120/month)
Adult
$840 ($70/month)
Senior (55&up)
$600 ($50/month)
Youth
$300 ($25/month)
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$130
$80
$60
$35
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Adult
Senior (55&up)
Youth
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Monthly Membership Fees
ADDITIONAL SERVICES

Sports Performance Training: $200/month per person

2-3 Month Youth Sports Leagues (17 and younger): $50/child

2-3 Month Adult Sports Leagues (18 and older): $75/participant

1 Month of Personal Training Sessions: $150/person

Premium Reserved Lockers: $50/month

Food/Beverages: Price varies per menu item
SHORT TERM FINANCIAL GOALS (2 YEARS – Dec 2017)
Below is an overview of the company’s goals to be achieved within the next two –five years:





Financing:
Revenue:
Profit:
Retained Earnings:
Staff:
Box1 Sports Center
Obtain approximately $2.1 mil in start up financing capital
Achieve approximately $2.5 mill in gross revenue
Achieve a minimum of 10% profit margin
Achieve a minimum of $50,000 in retained earnings as working capital
Employ a minimum of 15 employees
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LONG TERM GOALS (5 YEARS – Dec 2020)




Revenue:
Profit:
Retained Earnings:
Staff:
Achieve approximately $3.0 mil in gross revenue
Achieve a minimum of 10% profit margin
Achieve a minimum of $100,000 in retained earnings as working capital
Employ a minimum of 40 employees
FINANCIAL PROJECTIONS
Below is a list of our financial projections for the next three years:
ASSUMPTIONS
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 The company will acquire approximately $2.1mil in start up capital
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 Employer Payroll Liabilities will represent 12% of employee salaries
 The company’s revenue will steadily increase through continued marketing efforts
 The company will initially employ close to 15 personnel at the onset, with staffing levels increasing as
the business grows
 Food/Beverage costs will represent 30% of the Food/Beverage revenue
 The facility will take approximately 12-18 months to construct after land acquisition and design, with
an anticipated completion date of Jan 2017 if financing is received in May of 2015.
 The company’s revenue stream will be cyclical, with more revenue coming in during summer months
 The company will be able to secure approximately 100 memberships through pre-enrollment prior to
opening
Box1 Sports Center
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YEAR 1 PROJECTIONS
Jan-17
Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17
$27,000 $8,000 -$9,250 -$20,500 -$31,750 -$28,925 -$26,100 -$23,275 -$34,525
Nov-17 Dec-17 Total
-$45,775 -$64,775
$72,000
$9,000
$5,000
$86,000
$26,000
$9,000
$5,000
$40,000
Cash on hand (beg. of month)
CASH RECEIPTS
Membership Dues
Amenity/Training/League Sales
Food/Beverage Sales
Subtotal
COST OF GOODS SOLD
Direct Wages
Food/Beverage Inventory
$40,000
$13,500
$9,750
$63,250
$40,000
$13,500
$9,750
$63,250
$40,000
$13,500
$9,750
$63,250
$30,000
$11,000
$7,500
$48,500
$30,000
$11,000
$7,500
$48,500
$26,000
$9,000
$5,000
$40,000
$35,800 $35,800 $35,800 $35,800 $35,800 $35,800
$1,500 $1,500 $2,250 $2,250 $2,250 $2,925
$35,800
$2,925
$35,800
$2,925
$35,800
$2,250
$35,800
$2,250
$35,800 $35,800 $429,600
$1,500 $1,500 $26,025
$48,700 $2,700
$4,450
$10,450 $10,450 $24,525
$24,525
$24,525
$10,450
$10,450
$2,700
$2,700
SUBTOTAL
Loan/Investment principal payment
$2,000
$500
$500
$7,000
$500
$2,500
$200
$2,000
$4,296
$15,200
$6,500
$2,000
$500
$500
$7,000
$500
$2,500
$200
$2,000
$4,296
$15,200
$6,500
$2,000
$500
$500
$7,000
$500
$2,500
$200
$2,000
$4,296
$15,200
$6,500
$2,000
$500
$500
$7,000
$500
$2,500
$200
$2,000
$4,296
$15,200
$6,500
$2,000
$500
$500
$7,000
$500
$2,500
$200
$2,000
$4,296
$15,200
$6,500
$2,000
$500
$500
$7,000
$500
$2,500
$200
$2,000
$4,296
$15,200
$6,500
$2,000
$500
$500
$7,000
$500
$2,500
$200
$2,000
$4,296
$15,200
$6,500
$2,000
$500
$500
$7,000
$500
$2,500
$200
$2,000
$4,296
$15,200
$6,500
$2,000
$500
$500
$7,000
$500
$2,500
$200
$2,000
$4,296
$15,200
$6,500
$2,000
$500
$500
$7,000
$500
$2,500
$200
$2,000
$4,296
$15,200
$6,500
TOTAL CASH PAID OUT
Net Income/Loss
$21,700 $21,700 $21,700 $21,700 $21,700 $21,700
$27,000 -$19,000 -$17,250 -$11,250 -$11,250 $2,825
$21,700
$2,825
$21,700
$2,825
$21,700 $21,700
-$11,250 -$11,250
$30,000
$11,000
$7,500
$48,500
$30,000
$11,000
$7,500
$48,500
$26,000
$9,000
$5,000
$40,000
$416,000
$129,500
$86,750
$632,250
$176,625
Box1 Sports Center
$2,000
$500
$500
$7,000
$500
$2,500
$200
$2,000
$4,296
$15,200
$6,500
$2,000
$500
$500
$7,000
$500
$2,500
$200
$2,000
$4,296
$15,200
$6,500
D
CASH PAID OUT
Advertising/Marketing
Insurance
Office expense
Rent/Lease
Utilities
Professional Fees
Phone/Internet
Miscellaneous (Repairs & Maint., etc.)
Employer/Payroll Taxes
ra
ft
Total Gross Profit
$26,000
$9,000
$7,500
$42,500
$24,000
$6,000
$6,000
$84,000
$6,000
$30,000
$2,400
$24,000
$51,552
$182,400
$78,000
$21,700 $21,700 $260,400
-$19,000 -$19,000 -$83,775
Page 23
YEAR 2 PROJECTIONS
CASH RECEIPTS
Membership Dues
Amenity/Training/League Sales
Food/Beverage Sales
Subtotal
COST OF GOODS SOLD
Direct Wages
Food/Beverage Inventory
$29,000
$9,500
$5,500
$44,000
$29,000
$9,500
$8,000
$46,500
$35,000
$11,500
$8,000
$54,500
$35,000
$11,500
$8,000
$54,500
$47,000
$14,000
$10,500
$71,500
$47,000
$14,000
$10,500
$71,500
$47,000
$14,000
$10,500
$71,500
$35,000
$11,500
$8,000
$54,500
$35,000
$11,500
$8,000
$54,500
$36,000 $36,000 $36,000 $36,000 $36,000 $36,000 $36,000 $36,000 $36,000 $36,000
$1,650 $1,650 $2,400 $2,400 $2,400 $3,150 $3,150 $3,150 $2,400 $2,400
$8,100
$16,100 $16,100 $32,350 $32,350 $32,350 $16,100 $16,100
SUBTOTAL
Loan/Investment principal payment
$2,500
$550
$600
$7,000
$500
$2,750
$200
$2,500
$4,320
$16,600
$6,500
$2,500
$550
$600
$7,000
$500
$2,750
$200
$2,500
$4,320
$16,600
$6,500
$2,500
$550
$600
$7,000
$500
$2,750
$200
$2,500
$4,320
$16,600
$6,500
TOTAL CASH PAID OUT
Net Income/Loss
$23,100 $23,100 $23,100 $23,100 $23,100 $23,100 $23,100 $23,100 $23,100 $23,100
$39,250 -$16,750 -$15,000 -$7,000 -$7,000 $9,250 $9,250 $9,250 -$7,000 -$7,000
CASH PAID OUT
Advertising/Marketing
Insurance
Office expense
Rent/Lease
Utilities
Professional Fees
Phone/Internet
Miscellaneous (Repairs & Maint., etc.)
Employer/Payroll Taxes
Box1 Sports Center
ra
$62,350 $6,350
$29,000
$9,500
$5,500
$44,000
$29,000
$9,500
$500
$39,000
$482,000
$135,500
$88,500
$706,000
$36,000 $36,000 $432,000
$1,650 $150
$26,550
$6,350
$2,850
$2,500
$550
$600
$7,000
$500
$2,750
$200
$2,500
$4,320
$16,600
$6,500
$2,500
$550
$600
$7,000
$500
$2,750
$200
$2,500
$4,320
$16,600
$6,500
$247,450
D
Total Gross Profit
$85,000
$9,500
$5,500
$100,000
ft
Cash on hand (beg. of month)
Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18
Nov-18 Dec-18 Total
-64,775 -25,525 -42,275 -57,275 -64,275 -71,275 -62,025 -52,775 -43,525 -50,525 -57,525 -74,275
$2,500
$550
$600
$7,000
$500
$2,750
$200
$2,500
$4,320
$16,600
$6,500
$2,500
$550
$600
$7,000
$500
$2,750
$200
$2,500
$4,320
$16,600
$6,500
$2,500
$550
$600
$7,000
$500
$2,750
$200
$2,500
$4,320
$16,600
$6,500
$2,500
$550
$600
$7,000
$500
$2,750
$200
$2,500
$4,320
$16,600
$6,500
$2,500
$550
$600
$7,000
$500
$2,750
$200
$2,500
$4,320
$16,600
$6,500
$2,500
$550
$600
$7,000
$500
$2,750
$200
$2,500
$4,320
$16,600
$6,500
$2,500
$550
$600
$7,000
$500
$2,750
$200
$2,500
$4,320
$16,600
$6,500
$30,000
$6,600
$7,200
$84,000
$6,000
$33,000
$2,400
$30,000
$51,840
$199,200
$78,000
$23,100 $23,100 $277,200
-$16,750 -$20,250 -$29,750
Page 24
YEAR 3 PROJECTIONS
Cash on hand (beg. of month)
$100,000
$11,000
$7,000
$118,000
$33,500
$11,000
$7,000
$51,500
$33,500
$11,000
$7,000
$51,500
$42,000
$14,500
$9,500
$66,000
$42,000
$14,500
$9,500
$66,000
$55,500
$16,000
$12,000
$83,500
$55,500
$16,000
$12,000
$83,500
$55,500
$16,000
$12,000
$83,500
$42,000
$14,500
$9,500
$66,000
$42,000
$14,500
$9,500
$66,000
$38,000 $38,000 $38,000 $38,000 $38,000 $38,000 $38,000 $38,000 $38,000 $38,000
$2,100 $2,100 $2,100 $2,850 $2,850 $3,600 $3,600 $3,600 $2,850 $2,850
$33,500
$11,000
$7,000
$51,500
$33,500
$11,000
$7,000
$51,500
$568,500
$161,000
$109,000
$838,500
$38,000 $38,000 $456,000
$2,100 $2,100 $32,700
$77,900 $11,400 $11,400 $25,150 $25,150 $41,900 $41,900 $41,900 $25,150 $25,150
$11,400 $11,400
SUBTOTAL
Loan/Investment principal payment
$2,500
$600
$700
$7,000
$500
$3,000
$200
$3,000
$4,560
$17,500
$6,500
$2,500
$600
$700
$7,000
$500
$3,000
$200
$3,000
$4,560
$17,500
$6,500
TOTAL CASH PAID OUT
Net Income/Loss
$24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000
$53,900 -$12,600 -$12,600 $1,150 $1,150 $17,900 $17,900 $17,900 $1,150 $1,150
CASH PAID OUT
Advertising/Marketing
Insurance
Office expense
Rent/Lease
Utilities
Professional Fees
Phone/Internet
Miscellaneous (Repairs & Maint., etc.)
Employer/Payroll Taxes
D
Total Gross Profit
ra
ft
CASH RECEIPTS
Membership Dues
Amenity/Training/League Sales
Food/Beverage Sales
Subtotal
COST OF GOODS SOLD
Direct Wages
Food/Beverage Inventory
Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Total
-$74,275 -20,375 -32,975 -45,575 -44,425 -43,275 -25,375 -7,475 10,425
11,575 12,725
125
$2,500
$600
$700
$7,000
$500
$3,000
$200
$3,000
$4,560
$17,500
$6,500
$2,500
$600
$700
$7,000
$500
$3,000
$200
$3,000
$4,560
$17,500
$6,500
$2,500
$600
$700
$7,000
$500
$3,000
$200
$3,000
$4,560
$17,500
$6,500
$2,500
$600
$700
$7,000
$500
$3,000
$200
$3,000
$4,560
$17,500
$6,500
$2,500
$600
$700
$7,000
$500
$3,000
$200
$3,000
$4,560
$17,500
$6,500
$2,500
$600
$700
$7,000
$500
$3,000
$200
$3,000
$4,560
$17,500
$6,500
$2,500
$600
$700
$7,000
$500
$3,000
$200
$3,000
$4,560
$17,500
$6,500
$2,500
$600
$700
$7,000
$500
$3,000
$200
$3,000
$4,560
$17,500
$6,500
$2,500
$600
$700
$7,000
$500
$3,000
$200
$3,000
$4,560
$17,500
$6,500
$2,500
$600
$700
$7,000
$500
$3,000
$200
$3,000
$4,560
$17,500
$6,500
$349,800
$30,000
$7,200
$8,400
$84,000
$6,000
$36,000
$2,400
$36,000
$54,720
$210,000
$78,000
$24,000 $24,000 $288,000
-$12,600 -$12,600 $61,800
MARKET RESEARCH
Market Research developed from IBIS World Industry Report
Box1 Sports Center
Page 25
Gym, Health & Fitness Clubs in the USDecember 2014 1
WWW.IBISWORLD.COM
Hit the gym: The industry will remain resilient as
demand from health-conscious consumers grows
IBISWorld Industry Report 71394
ra
Sarah Turk
D
December 2014
ft
Gym, Health & Fitness
Clubs in the US
2 About this Industry
17 International Trade
32 Key Statistics
2
Industry Definition
18 Business Locations
32 Industry Data
2
Main Activities
2
Similar Industries
20 Competitive Landscape
3
Additional Resources
20 Market Share Concentration
32 Annual Change
20 Key Success Factors
4 Industry at a Glance
32 Key Ratios
33 Jargon & Glossary
20 Cost Structure Benchmarks
22 Basis of Competition
5 Industry Performance
23 Barriers to Entry
5
Executive Summary
24 Industry Globalization
5
Key External Drivers
7
Current Performance
9
Industry Outlook
11 Industry Life Cycle
25 Major Companies
28 Operating Conditions
28 Capital Intensity
13 Products & Markets
29 Technology & Systems
13 Supply Chain
29 Revenue Volatility
13 Products & Services
30 Regulation & Policy
15 Demand Determinants
30 Industry Assistance
15 Major Markets
www.ibisworld.com | 1-800-330-3772 | info @ibisworld.com
Gym, Health & Fitness Clubs in the USDecember 2014 2
WWW.IBISWORLD.COM
About this Industry
Industry Definition
This industry operates fitness and
recreational sports facilities that feature
exercise and other active physical fitness
conditioning or recreational sports
Main Activities
The primary activities of this industry are
activities, such as swimming, skating or
racquet sports. Operators are also
involved in facilities management and
fitness instruction.
Operating aerobic dance and exercise centers
Operating athletic club facilities for physical fitness
Operating body building studios for physical fitness
Operating fitness centers, health clubs and gyms
Operating recreational sports club facilities
Operating ice or roller skating rinks
Operating spas
Operating squash, racquetball or tennis clubs
ft
Operating swimming pools
D
Dance centers
ra
The major products and services in this industry are
Gyms and fitness centers
Ice and roller rinks
Swimming pools
Tennis centers
Other
Similar Industries
71399 Golf Driving Ranges & Family Fun Centers in the US
Establishments in this industry operate recreational sports clubs (i.e. sports teams), but do not operate sports
facilities.
72111 Hotels & Motels in the US
Establishments in this industry are primarily engaged in operating health resorts and spas where
recreational facilities are combined with accommodations.
81219a Weight Loss Services in the US
Establishments in this industry are primarily engaged in providing nonmedical services to assist clients in
attaining or maintaining a desired weight.
81219c Tanning Salons in the US
Establishments in this industry are primarily engaged in providing artificial tanning services.
Gym, Health & Fitness Clubs in the USDecember 2014 3
WWW.IBISWORLD.COM
About this Industry
For additional information on this industry
www.ballyfitness.com
Bally Total Fitness
www.ihrsa.org
International Health, Racquet and Sportsclub Association
www.sfia.org
Sports and Fitness Industry Association
writes over 700 US
industry reports, which are updated
up to four times a year. To see all
reports, go towww.ibisworld.com
ra
ft
IBISWorld
D
Additional Resources
WWW.IBISWORLD.COM
Gym, Health & Fitness Clubs in the US December 2014 4
Industry at a Glance
Gym, Health & Fitness Clubs in 2014
Key Statistics
Snapshot
Revenue
Annual Growth 09-14
Annual Growth 14-19
Profit
Wages
Businesses
$26.5bn
$2.3bn
2.3%
$8.3bn
Time spent on leisure and sports
Revenue vs. employment growth
Market Share
There are no
Major Players in
this industry
8
5.4
5.3
4
Units
% change
6
2
0
10
12
14
16
18
20
5.0
Year 06
08
10
12
14
16
18
20
Employment
D
Revenue
p. 25
ft
08
ra
−4
5.2
5.1
−2
Year 06
2.8%
29,894
SOURCE: WWW.IBISWORLD.COM
Products and services segmentation (2014)
Key External Drivers
6%
Participation in sports
5%
Tennis centers
Ice and roller rinks
Time spent on
leisure and sports
7%
Swimming pools
Per capita disposable
income
7%
Dance centers
Number of adults
aged 20 to 64
Yield on 10-year
Treasury note
10%
Other
65%
Gyms and fitness centers
p. 5
SOURCE:
WWW.IBISWORLD.COM
SOURCE:
WWW.IBISWORLD.COM
Industry Structure
Life Cycle Stage
Revenue Volatility
Capital Intensity
Growth
Low
Medium
Regulation Level
Technology Change
Light
Medium
Barriers to Entry
Low
Industry Assistance
Low
Industry Globalization
Low
Concentration Level
Low
Competition Level
High
FOR ADDITIONAL STATISTICS AND TIME SERIES SEE THE APPENDIX ON PAGE 32
Gym, Health & Fitness Clubs in the USDecember 2014 5
WWW.IBISWORLD.COM
Industry Performance
Executive Summary | Key External Drivers | Current Performance
Industry Outlook | Life Cycle Stage
Executive
Summary
The Gym, Health and Fitness Clubs
industry has weighed in on the recent
marketing campaigns and consumer
trends that have aimed to fight obesity
and advocate for improved consumer
health. In the five years to 2014, health
club memberships have grown at an
estimated annualized rate of 6.1% to 54.1
million individuals. While health club
memberships have fared well over the
period, they still declined an estimated
15.5% in 2009, in line with many budgetconscious individuals terminating their
memberships. Further exacerbating this
trend, time-strapped consumers became
more prevalent, evidenced by individuals’
time spent on leisure and sports
remaining relatively stagnant, with an
estimated annualized growth rate of
0.1%, which has slightly constrained
industry revenue growth.
However, from 2010 to 2014, many
small, low-cost gyms with few amenities
and month-by-month contracts have
fared well when compared with highcost, all-inclusive gym memberships.
Furthermore, many health-conscious
individuals have implemented fitness
into their daily regimen, which has
buoyed industry revenue. Additionally,
the number of adults aged 20 to 64, the
largest gym-going demographic, has
exhibited growth, which spurred demand
for gym memberships over the period. As
a result, in the five years to 2014,
industry revenue is anticipated to grow at
an annualized rate of 2.3% to reach $26.5
billion, including 2.4% revenue growth in
2014 due to more consumers valuing
fitness to bolster their overall health and
well being. Nevertheless, profit is
expected to contract from 9.6% of
industry revenue in 2009 to 8.6% in
2014, which can be attributed to many
gym, health and fitness clubs offering
memberships with low cancelation
penalty fees, thereby cutting into
profitability, particularly for gyms that
had high attrition rates over the period.
Over the next five years, the industry
will benefit from the burgeoning elderly
population becoming increasingly
active, which will result in many baby
boomers signing up for health club
memberships. Consequently, industry
revenue is forecast to grow at an
annualized rate of 2.8% to $30.5 billion
in the five years to 2019. Moreover,
consumers will substitute larger,
all-inclusive clubs for low-cost
memberships, which is anticipated to
propel industry revenue forward.
Participation in sports
Participation in sports measures the
percentage of individuals that participate
in sports, recreation or exercise per day.
As more individuals participate in sports,
this trend reflects more health-conscious
individuals, which typically increases
consumer demand for gym, health and
fitness club memberships. Participation
in sports is expected to decrease in 2015.
Time spent on leisure and sports
As individuals have more leisure time,
they can allocate more time toward their
fitness regimen, which spurs consumer
demand for gym, health and fitness club
memberships. While the industry will
contend with more time-strapped
individuals, many health-conscious
consumers will increasingly value fitness
industry will benefit from the burgeoning
elderly population becoming more active
D
ra
ft
The
Key External Drivers
Gym, Health & Fitness Clubs in the USDecember 2014 6
WWW.IBISWORLD.COM
Industry Performance
for their overall health, thereby
stimulating demand for gym
memberships. However, time spent on
leisure and sports is expected to decline
in 2015, posing as a potential threat to
the industry.
Number of adults aged 20 to 64
Individuals aged 20 to 64 comprise a large
gym-going demographic for the industry.
The aging of the baby boomer generation,
coupled with the maturation of their
children, will broaden the market for this
industry. The number of adults aged 20 to
64 is expected to increase slowly in 2015.
Yield on 10-year Treasury note
The yield on a 10-year Treasury note
measures the current interest rate. As
interest rates rise, the investing environment
for gym, health and fitness clubs will be less
favorable, therefore inciting fewer gyms to
expand their franchise operations and
boutique gyms to enter the industry. The
yield on a 10-year Treasury note is expected
to increase in 2015.
ft
Per capita disposable income
As per capita disposable income rises,
more individuals can purchase gym,
health and fitness club memberships.
Furthermore, as disposable income
increases, more consumers can allocate
discretionary income toward high-cost,
all-inclusive gym memberships, which
benefits the industry. Per capita
disposable income is expected to increase
in 2015, representing a potential
opportunity for the industry.
Participation in sports
D
ra
Time spent on leisure and sports
5.4
21
20
5.3
19
5.2
%
Units
Key External Drivers
continued
18
5.1
5.0
Year 06
17
08
10
12
14
16
18
20
16
Year 06
08
10
12
14
16
18
20
SOURCE: WWW.IBISWORLD.COM
Gym, Health & Fitness Clubs in the USDecember 2014 7
WWW.IBISWORLD.COM
Industry Performance
8
6
4
2
0
−2
−4
Year 06
08
10
12
14
16
18
20
SOURCE: WWW.IBISWORLD.COM
as many gyms have increasingly offered
low-cost gym memberships with monthly
contracts to attract budget-conscious
consumers, cutting into industry probability,
particularly for gyms with high member
attrition rates.
D
ra
Industry revenue
% change
Gym, health and fitness clubs have grown
over the past five years, bolstered by
public health initiatives that have shed
light on fitness’ role in fighting diabetes,
obesity and other health ailments. This
trend is evidenced by the number of
health club memberships growing over the
period, as more individuals have valued
fitness as an integral component in their
health regimen. Furthermore, population
growth, particularly among individuals
aged 20 to 64, which comprises the largest
gym-going demographic, has spurred
demand for health club memberships.
Over the five years to 2014, revenue is
anticipated to grow at an annualized rate of
2.3% to $26.5 billion, including 2.4%
revenue growth in 2014 alone, driven by the
increasingly active baby boomer population
purchasing gym memberships. However,
profit is expected to contract from 9.6% of
industry revenue in 2009 to 8.6% in 2014,
ft
Current
Performance
Industry landscape
Demand for health club memberships
typically exhibits the strongest growth in
the first three months of the year. For
example, an estimated 30.0% of all new
members have signed up for their gym
and fitness club during the first few
months of the year, driven by New Year
resolutions, which may incite consumers
to implement healthier lifestyles. To boost
the number of new memberships during
other months, many gyms have offered
discounts and monthly memberships;
however, January still comprises the
largest portion of membership sales.
Over the past five years, the industry has
benefited from the rapid expansion of health
club memberships. For example, the total
number of gym memberships has grown
from an estimated 40.3 million members in
2009 to 54.1 million in 2014. While this
trend has bolstered industry revenue, many
gyms still compete on the basis of price.
Furthermore, gyms that have offered
low-cost, contract-free memberships with
fewer amenities fared well over the period,
in line with strong demand from many
budget-conscious consumers over the
period. The industry has contended with
many time-strapped consumers over the
period, many struggling to allocate time
toward fitness; this trend was offset by more
health-conscious individuals still
incorporating fitness into their regimen.
Moreover, demographic trends have
helped to shape the industry’s landscape.
For example, the aging of the baby-boomer
generation and the maturation of their
offspring, the echo boomers, have
broadened the market for gyms and health
and fitness clubs. Government-sponsored
programs, such as Michelle Obama’s “Let’s
Move!” initiative, which has advocated for
fighting against childhood obesity, have
increased awareness of the benefits of
physical exercise for consumers of all ages,
especially families. Over the past five years,
this initiative, among other health programs,
has provided a boon to the industry.
Gym, Health & Fitness Clubs in the USDecember 2014 8
WWW.IBISWORLD.COM
Industry Performance
Poor economic conditions, coupled with
many consumers continuing to be budget
conscious over the period, have caused
new trends to emerge within the industry.
A growing preference for easily accessible,
smaller gyms with fewer amenities has
benefited boutique gyms that have catered
to a market niche of local consumers. The
market share of smaller-budget gyms is
subsequently growing, as consumers have
substituted gyms with fewer amenities for
expensive, all-inclusive clubs, which
include related facilities, such as tennis
centers, racquetball courts, ice rinks and
swimming pools.
For example, Planet Fitness
experienced strong membership growth
during the recession, with some clubs
signing up more than 1,000 new
members each month in 2009,
according to the International Health,
Consumer
preference has
shifted toward smaller
gyms with fewer amenities
Racquet and Sportsclub Association
(IHRSA). Planet Fitness offers
inexpensive gym membership fees of
$10 to $19 per month, depending on the
location, and has steadily expanded
operations over the past three years.
Other growing franchises include Snap
and Anytime Fitness, which have
demonstrated the popularity of niche
gyms that target budget-conscious
clientele. Moreover, consumers that seek
individualized fitness programs, specific
fitness goals or are uncomfortable
exercising in larger gyms particularly
favored small-scale gyms.
D
ra
ft
Fitness trends
Enterprises and
employment
As operators try to attract consumers
with low-cost, contract-free and lowamenity memberships, many industry
players have limited their establishment
expansion to lower operational costs.
However, industry establishments have
grown at an estimated annualized rate of
0.7% to 34,023 businesses over the five
years to 2014, as many large industry
players have acquired small, niche gyms
that have catered to local clientele.
To address consumers’ preference for
local, boutique gyms and fitness
centers, many gyms are increasingly
substituting smaller facilities for
national chains. For example, from
2007 to 2010, Curves International Inc.
closed 2,500 locations because the
franchise was unable to compete with
local, low-cost gyms that offered longer
operating hours. The number of
employees in the industry is expected to
grow at an average annual rate of 1.7%
to 583,075 people as demand for fitness
instructors increases in line with
growth in health club memberships.
Gym, Health & Fitness Clubs in the USDecember 2014 9
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Industry Performance
Over the next five years, the Gym, Health
and Fitness Clubs industry will lift itself to
success, benefiting from the revitalization
in consumers’ discretionary spending. As
consumers’ disposable income rises, more
individuals will purchase gym
memberships that include a plethora of
amenities, compared with low-cost
memberships with few amenities that
have fared well over the previous period.
Moreover, while many individuals will be
time-strapped over the period, which may
constrain demand for gym memberships,
this trend will be offset by growing
demand for results-driven gyms that can
help individuals achieve fitness goals in
New demographics
In the next five years, population growth
and demographic changes will increasingly
drive revenue growth. For example, the
burgeoning baby boomer population, which
is becoming increasingly active, will
purchase gym memberships to maintain a
healthier lifestyle. Additional revenue
streams will also play an integral component
in industry revenue growth. In particular, as
healthcare costs continue to escalate, many
health insurance providers may implement
incentives to promote preventive health
practices, including the use of fitness centers
among individuals within their provider
network. Furthermore, the number of obese
individuals in the United States is
increasing. According to a study by the
Centers for Disease Control and Prevention,
an estimated 42.0% of Americans will be
considered obese by 2030. In particular,
many health insurance providers will
attempt to lower individuals’ risk for type
2 diabetes, heart disease, dementia, cancer
and high blood pressure, among other
health ailments, to cut healthcare costs.
Additionally, the proliferation of
initiatives that shed light on the health
benefits of exercise will likely occur over
the next five years, which will stimulate
industry revenue.
D
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Industry
Outlook
shorter time increments. For example,
personal and group trainers, as well as
fitness classes, will be popular.
In the five years to 2019, revenue is
forecast to grow at an annualized rate of
2.8% to $30.5 billion due to more
consumers purchasing high-cost industry
services, such as cohesive, individualized
health plans that include trainers and
nutritional guidance. Profit is also expected
to slightly rise from 8.6% of industry
revenue in 2014 to 8.9% in 2019, as many
gyms offer more high-margin services,
such as group personal training sessions, to
strengthen their product portfolio and
bolster member retention rates.
Demographic
changes will
increasingly drive revenue
growth
Many employers are increasingly viewing
fitness as a vital component of employee
health due to studies indicating that fitness
can boost worker productivity. As a result of
this trend, many employers may subsidize
gym memberships for their employees,
therefore providing a boon to the industry.
Furthermore, as many families become
health and fitness conscious, more
consumers aged 17 and younger will
purchase gym memberships. Less physical
education in schools, coupled with growing
concerns regarding childhood obesity, will
prompt gym membership sales for this age
demographic. As consumers become
increasingly time strapped, many will
invest in fitness classes and individual or
group sessions with trainers to obtain their
fitness goals more efficiently. In the next
five years, group classes are expected to
increase in popularity, especially fusion
classes that combine yoga, Pilates, ballet,
dance and surfing.
Gym, Health & Fitness Clubs in the USDecember 2014 10
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Industry Performance
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While large-scale gyms will continue to
dominate the industry landscape by
offering a diverse portfolio of services,
many small gyms will persist in attracting
a niche market of local customers. In
particular, small operators will attempt
to entice local, time-strapped customer
bases by offering conveniently located
establishments in unsaturated areas.
However, large industry operators can
relatively mitigate this trend by attracting
consumers via technology, such as phone
applications that enable gym users to
access their previous fitness statistics.
In the five years to 2019, the number
of industry enterprises is anticipated to
slightly grow at an annualized rate of
D
Industry landscape
Operators
will implement a
larger workforce to develop
and retain their clientele
0.6% to 30,818 operators, as the trend
of health consciousness continues to
boost demand for industry services.
Additionally, the number of employees
is anticipated to grow at an annualized
rate of 1.5% to 628,668 people over the
same period, as industry operators
implement a larger workforce to provide
additional services, such as fitness
classes and spa services, to develop and
retain their clientele.
Gym, Health & Fitness Clubs in the USDecember 2014 11
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Industry Performance
Increased awareness and interest in fitness and
health has bolstered industry performance
Life Cycle Stage
Although industry value added is growing at a
slower rate compared with the overall economy,
this can be attributed to the recession
20
Maturity
Quality Growth
Company
consolidation;
level of economic
importance stable
High growth in economic
importance; weaker companies
close down; developed
technology and markets
Revenue grows faster than the economy
Many new companies enter the market
Rapid technology & process change
Growing customer acceptance of product
Rapid introduction of products & brands
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15
Key Features of a Growth Industry
D
% Growth in share of economy
General population growth leads to
increased demand for facilities
10
Quantity Growth
Many new companies;
minor growth in economic
importance; substantial
technology change
5
Hotels & Motels
Heating & AirConditioning Contractors
0
Golf Driving Ranges &
Family Fun Centers
Gym, Health & Fitness Clubs
Steam & Air-Conditioning Supply
Weight Loss Services
Decline
-5
Shrinking economic
importance
-10
-10
-5
0
5
10
15
20
% Growth in number of establishments
SOURCE: WWW.IBISWORLD.COM
Gym, Health & Fitness Clubs in the USDecember 2014 12
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Industry Performance
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industry
is Growing
ra
This
The Gym, Health and Fitness Clubs is in
the growth life cycle stage, because
consumers continue to be interested in
exercise to boost fitness and health.
During the 10 years to 2019, industry
value added (IVA), a measure of an
industry’s contribution to the overall
economy, is expected to grow at an
annualized rate of 2.5%. Comparatively,
GDP is anticipated to grow at the same
rate during the ten-year period.
Although the industry is growing at the
same pace as the overall economy, the
industry has grappled with slow growth
during the five years to 2014. As per
capita income declined, more consumers
purchased low-cost gym memberships
with fewer amenities, which has
hampered industry profitability and
constrained revenue growth. However,
this trend will be mitigated in future
years as growing per capita disposable
income, coupled with less leisure time,
will incite time-strapped consumers to
D
Industry Life Cycle
purchase personal trainers to
accomplish fitness goals.
As public health campaigns spread
awareness about the health benefits of
fitness, consumers will increasingly
perceive gym and fitness club
membership as a vital expense. For
example, as government programs and
businesses support participation in
fitness programs, consumers will
recognize the benefits of exercise for
productivity and health reasons. As gym
memberships become more entrenched
in the average American’s life, revenue
growth will slow to match population
growth, bringing the industry from
growth to maturity. Future growth
areas will likely be in participative
sports for women and the older sections
of the community; and in individual
sports rather than team sports. These
factors will support continued growth
for gyms and health clubs over the five
years to 2019.
Gym, Health & Fitness Clubs in the USDecember 2014 13
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Products & Markets
Supply Chain | Products & Services | Demand Determinants
Major Markets | International Trade | Business Locations
Supply Chain
KEY BUYING INDUSTRIES
99
Consumers in the US
Consumers drive the demand for gyms, health and fitness clubs.
KEY SELLING INDUSTRIES
Steam & Air-Conditioning Supply in the US
This industry supplies air conditioning for facilities.
23822a
Heating & Air-Conditioning Contractors in the US
This industry supplies heating and air conditioning for gyms and fitness centers.
23822b
Plumbers in the US
This industry supplies plumbing services for changing rooms.
33992a
Athletic & Sporting Goods Manufacturing in the US
This industry supplies sporting equipment to operators.
33992b
Gym & Exercise Equipment Manufacturing in the US
This industry supplies sporting equipment to operators.
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ft
The Gym, Health and Fitness Clubs
industry offers a wide array of services
across a variety of facilities, including
gyms, tennis centers, ice skating rinks
and swimming pools. The industry is
generally divided into groups based on
these types of facilities, but it can also be
separated by function or payment.
Industry operators generate income from
membership dues, admissions or use of
facilities, tuition services, rental hire,
food and beverage sales, retail sales and
other services. Health and fitness clubs
typically derive a large portion of their
revenue from membership fees, followed
by admissions to additional facilities,
such as pools, courts, rinks and classes.
However, the breakdown will vary
considerably between different types of
gym, health and fitness clubs, depending
on their operations and services offered.
D
Products & Services
22133
Gyms and fitness centers
The largest product segment is gyms and
fitness centers, which make up about
65.0% of revenue in 2014. This segment
dominates the industry due to a high
participation rate; about 40.0% of people
aged seven and older worked out at a club
at least once in 2010 (latest data
available), according to data from the
National Sporting Goods Association
(NSGA). Members generally join gyms by
signing one-year contracts.
Gym, health and fitness clubs include a
range of activities and continue to offer
new classes and recreation options to
their members (e.g. yoga, Pilates and spa
services). This segment has especially
grown in the past five years, as gyms have
implemented more fitness activities,
compared with leisure, to appeal directly
to the health-conscious population. There
are various kinds of health and fitness
clubs that cater to different markets,
including female-only gyms (such as
Curves International), premium fullservice health clubs, 24-hour gyms and
bodybuilding gyms.
Swimming pools
Swimming pools are the second-largest
industry segment, which comprises about
7.0% of revenue in 2014. Outdoor pools
are more popular in the warmer southern
states, but indoor heated pools are
common in colder states. Swimming is a
popular activity, though outdoor pools
tend to be seasonal. According to the
Centers for Disease Control and
Gym, Health & Fitness Clubs in the USDecember 2014 14
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Products & Markets
Products and services segmentation (2014)
5%
Tennis
centers
7%
Swimming pools
6%
Ice and
roller rinks
7%
Dance centers
10%
Other
65%
Gyms and fitness centers
Total $26.5bn
SOURCE: WWW.IBISWORLD.COM
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Prevention, swimming is the most
popular recreational activity for children
and teens. According to the latest
available data, about 63.5% of the US
population went swimming at least once
in 2010.
D
Products & Services
continued
Dance centers
Dance centers and studios are a growing
segment of the industry, generating
about 7.0% of industry revenue in 2014.
These centers are largely available to the
general public for all ages and ability
levels. A wide variety of dance classes
(e.g. salsa and hip hop) are made
available in most areas, appealing to both
beginners and professionals.
Ice rinks and in-line skating rinks
Ice rinks and in-line skating rinks are
another popular industry activity,
accounting for about 6.0% of revenue in
2014. Skating rinks are popular, as
participants can skate both for leisure
and to participate in hockey and figure
skating. The NSGA reports that about
10.0% of the population participated in
either ice or in-line skating during 2010
(latest available data), and 2.0%
participated in ice hockey. IBISWorld
estimates that there are about 1,800 ice
rinks in the United States.
Tennis centers and other
Tennis centers are expected to account
for about 5.0% of revenue in 2014. As
the popularity of other competitive
sports has increased over the past five
years, demand for tennis courts has
wavered. In 2010 (latest data available),
12.6% of the population played tennis at
least once, according to the NSGA.
Recently, there have been significant
technological advances in tennis
racquets. These advances have stemmed
from areas such as grip shapes, shaft
flexibility, string patterns, head size and
string gauges. Tennis court surfaces are
also changing for both indoor and
outdoor tennis courts, with synthetic
and artificial surfaces providing a more
even and predictable bounce, compared
with grass or clay. Other fitness and
recreational services include a variety of
racket sports, such as handball,
racquetball, squash, table tennis and
badminton and account for about 10.0%
of industry revenue.
Gym, Health & Fitness Clubs in the USDecember 2014 15
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Products & Markets
Across the United States, increasing
awareness of the need for exercise,
weight control, good nutrition and
healthy lifestyle choices among adults
and children is having a positive effect on
fitness and recreational sports centers.
The demand for services provided by the
Gym, Health and Fitness Clubs industry
is determined by a number of factors,
including household disposable income,
consumer confidence, leisure time
availability, participation in recreation
and sports, seasonal conditions,
attitudes towards health and fitness and
the cost of services relative to other
recreation options.
Household disposable income is
particularly relevant to industry demand,
as the level of disposable income within a
household will determine the amount
spent at fitness and recreational sports
centers. As discretionary spending rises,
demand for gyms and fitness clubs
typically increases. Similarly, industry
growth is impacted by consumer
confidence, as an increase leads to higher
demand and willingness to spend on the
industry’s services.
Overall, demand is also sensitive to
seasonal and weather conditions; for
example, cold weather can reduce the
level of swimming pool attendance
(particularly for outdoor pools), while
also increasing attendance at ice skating
rinks. Additionally, the beginning of the
calendar year marks the busiest season
for new sales. A large portion of new gym
members sign on in January or February,
often because of New Year’s resolutions.
Leisure time availability also
influences demand, with time-poor
consumers finding it difficult to
incorporate industry services into their
routine. As work hours decline, people
find more ways to attend gyms and use
facilities. The link between leisure time
and demand relates to health and fitness
awareness, as people view fitness as a
valuable way to use their spare time.
While health crazes generally have a
positive effect on the industry, certain
fitness trends can have varied effects on
the industry. For example, the increase in
popularity of yoga, and especially in its
muscle toning qualities, reduces demand
for weight training among females in
particular. Finally, the lower cost of
industry services compared with other
sport and recreation activities can
stimulate demand as well. Conversely,
when industry costs are relatively higher
than other recreational activities,
consumer demand for gym memberships
may contract.
Major Markets
Over the past decade, the industry has
experienced substantial growth in
demand, and as a result, the breakdown
of the industry’s markets have also
changed. The aging population has
encouraged health and fitness clubs to
widen their target demographic beyond
the traditional market of 18- to 35-yearolds. Industry operators are increasingly
expanding their target market to include
35- to 54-year-olds and individuals aged
under 18. The majority of gym and health
club members are female, which account
for about 57.0% of all gym, health and
fitness club memberships and have
increased in recent years. The growth of
female participation is likely a result of
the rising number of female-only health
club facilities.
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Demand
Determinants
Consumers aged 35 and older
The central characteristic of the Gym,
Health and Fitness Clubs industry has
been the growth in the population of older
members who are joining health clubs. In
2014, IBISWorld estimates that there will
be 54.1 million health club members in the
United States. Additionally, about 20.0%
Gym, Health & Fitness Clubs in the USDecember 2014 16
WWW.IBISWORLD.COM
Products & Markets
Major market segmentation (2014)
8%
4%
Consumers
Consumers aged 6 to 11
aged 12 to 17
35%
Consumers
aged 18 to 34
20%
Consumers aged
55 and up
33%
Consumers
aged 35 to 54
Total $26.5bn
SOURCE: WWW.IBISWORLD.COM
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ft
of these members will be older than 55,
which signifies the trend of older
individuals increasingly implementing
active lifestyles.
The industry has also grown
significantly within the 35-to-54 age
group, with an estimated 13.4 million
health club members (24.8% of the
market). The two segments identified can
be generally grouped within baby
boomers and generation X profiles. There
are about 120.0 million people within
these age categories, accounting for more
than 35.0% of the total US population.
These segments continue to drive growth
in membership numbers and
participation in sport and fitness
activities. During the next five years,
demand for industry services from this
major market will increase due to a
greater proportion of individuals
comprising this age demographic.
D
Major Markets
continued
Consumers aged 18 to 34
This age category accounts for the
industry’s largest market segment, with
an estimated 5.0% market share. Despite
its size, this segment has shown little
growth over the past decade, compared
with other age categories. While this
demographic is expected to include 10.5
million individuals, this market segment
has experienced slow growth during the
past five years. Slow growth can be
attributed to this market segment’s
strong, yet stable, demand for fitness
options. Furthermore, other fitness
activities, such as team sports, have cut
into this market segment’s demand for
gym memberships.
Consumers aged 17 and younger
The 6-to-11 and 12-to-17 demographics
are expected to account for 4.0% and
8.0% of market share, respectively.
Growth within these areas (particularly
the latter) has been strong over the
past decade, as the echo boom
generation (children of baby boomers)
has increased in size. Additionally,
many parents have been increasingly
purchasing health club memberships
for their children in response to rising
child obesity rates. Youth
memberships have become one of the
fastest growth areas for the fitness club
industry, and many clubs are shifting
their focus to target this market
segment. Moreover, many school
programs, in response to state budgetary
issues, have cut back on physical
education classes, which has caused
many parents to purchase alternative
fitness options for their children.
Gym, Health & Fitness Clubs in the USDecember 2014 17
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Products & Markets
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International trade does not generally
apply to the US Gyms, Health and
Fitness Clubs industry, as it is a serviceoriented sector with no measurable
imports or exports. International
trading of fitness and exercise
D
International Trade
equipment is recorded at the
manufacturing level for fitness or
sporting goods (IBISWorld report
33992). For more information on global
operations, please refer to the Industry
Globalization section.
Gym, Health & Fitness Clubs in the USDecember 2014 18
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Products & Markets
Business Locations 2014
West
New
England
AK
0.3
Great
Lakes
ND
MT
Rocky
Mountains
ID
1.5
West NV
0.6
SD
0.3
WY
0.5
2.0
CO
0.7
KY
0.8
9
OK
0.9
NC
3.4
TN
AZ
NM
1.5
0.5
Southwest
TX
6.0
HI
0.3
Additional States (as marked on map)
1 VT
2 NH
3 MA
4 RI
5 CT
6 NJ
7 DE
8 MD
0.3
1.6
0.6
4.2
3.5
0.4
SC
Southeast
0.7
MS
AL
1.2
1.4
GA
2.6
0.7
LA
1.4
FL
5.5
Establishments (%)
0.5
2.2
AR
8
0.5
1.6
10.8
7
WV VA
2.8
1.2
1.9
CA
West
3.8
MO
KS
1.8
OH
2.0
4.2
6
4.7
IN
IL
0.7
UT
PA
3.0
1.1
0.5
1 2
3
NY
7.1
5 4
MI
2.2
IA
NE
0.2
WI
Plains
D
OR
MN
0.3
0.4
ft
2.6
ra
WA
ME
MidAtlantic
9 DC
0.2
Less than 3%
3% to less than 10%
10% to less than 20%
20% or more
SOURCE: WWW.IBISWORLD.COM
Gym, Health & Fitness Clubs in the USDecember 2014 19
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Products & Markets
Distribution of establishments vs. population
30
%
20
10
Southwest
Southeast
Rocky Mountains
Plains
New England
Mid-Atlantic
Great Lakes
West
0
Establishments
Population
SOURCE: WWW.IBISWORLD.COM
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ft
The four regions that encompass the
greatest percentages of gyms and health
and fitness clubs include the Southeast
(22.9% of establishments), the MidAtlantic (18.9%), the West (16.0%), and
the Great Lakes (15.2%) regions of the
United States. Together these four
regions account for 73.0% of total
industry establishments. Establishments
are particularly concentrated in the
following states: with 10.8% of
establishments in California, New York
(7.1%), Texas (6.0%), Florida (5.5%) and
Pennsylvania (4.7%). Typically, highly
populated regions have a higher portion
of industry establishments. This trend
can be attributed to consumer’s lack of
willingness to travel excessive distances
to perform exercise or become a member
of a fitness or recreational sports center.
However, geographical locations can
also determine the popularity of a
fitness activity as many areas have
climates that are not conducive to
particular sports. For example, the
population of Maine is twice as likely to
participate in ice-skating as the
national average. Similarly, the
population of Arizona is almost twice as
likely to participate in swimming at a
pool as the national average. As a
result, areas across the United States
will have a greater amount of
establishments dedicated to a particular
D
Business Locations
activity depending on climate and other
related factors.
Changes in geographic distribution over
the past five years have been minimal,
with no region increasing or declining in
share by more than one percentage point.
The West and Southwest regions have
experienced slight growth in the past five
years, whereas the Rocky Mountains, New
England, and Great Lakes observed small
declines. These changes can be attributed
to shifting demographics and varying
demand levels.
WWW.IBISWORLD.COM
Gym, Health & Fitness Clubs in the US December 2014 20
Competitive Landscape
Market Share Concentration | Key Success Factors | Cost Structure Benchmarks
Basis of Competition | Barriers to Entry | Industry Globalization
Key Success Factors
IBISWorld
identifies
250 Key Success
Factors for a
business. The most
important for this
industry are:
Easy access for clients
A high profile location offering easy access
and parking can provide a competitive
advantage for firms in this industry.
Provision of appropriate facilities
Providing appropriate equipment and
maintaining it regularly is essential to
attracting and retaining customers.
Effective product promotion
Effective promotion of fitness center
services and amentities increases
awareness and attracts greater
membership and local patronage.
Having a good technical
knowledge of the product
Skilled employees that can demonstrate
the use of various types of equipment and
assist participants are important to
attract repeat customers.
ft
in
this industry is L ow
percentage of nonemployers is
substantial because the industry’s low
barriers to entry and low startup
capital costs.
The larger players in this industry have
numerous locations throughout the
United States, while small players are
generally independently owned and
operate in one or two states. However,
over the past five years, the proportion of
businesses that employs 20 people or
more has increased, indicating that
concentration is rising. The industry’s
market share will become more
concentrated over the next five years, as
larger firms acquire small, niche gym,
health and fitness clubs.
ra
Level
Concentration
The Gym, Health and Fitness Clubs
industry exhibits a low level of market
share concentration, with the top four
firms in the industry comprising an
estimated 13.9% of total revenue in 2014.
The industry’s low level of market
concentration can be attributed to high
fragmentation, due to many industry
operators having a market niche with
local clientele. Additionally, a large
number of fitness and gym centers only
employ one person or are nonemploying
establishments. In 2014, 36.0% of all
industry establishments are expected to
be nonemployers, and these
establishments generate an estimated
11.9% of industry revenue. The
D
Market Share
Concentration
Economies of scale
Fitness firms that have a large number of
establishments and provide a wide range
of services are able to attract and retain
new and existing members, as well as
reduce costs per member.
Cost Structure
Benchmarks
Profit
Member retention is a key component in
fitness centers’ profitability, as many gym,
health and fitness centers have fixed
overhead costs. According to the
International Health, Racquet & Sportsclub
Association, the average attrition rate for
gyms in the United States is up to 45.0%,
meaning that 45 out of 100 individuals will
Business expertise of operators
The long-term success of a firm in this
industry depends on the skill of the
operator in running a business profitably
over time.
cancel their gym memberships each year.
Furthermore, the cost of recruiting a new
member is more than twice the cost of
retaining an existing member. As a result,
many health clubs will continue to direct
funds toward retaining existing members
in 2014 by prioritizing excellent customer
service, adding amenities and lowering
their membership cancelation penalties.
WWW.IBISWORLD.COM
Gym, Health & Fitness Clubs in the US December 2014 21
Competitive Landscape
IBISWorld estimates that industry
profit will comprise 8.6% of revenue in
2014. Following a weak year in 2010,
profit has steadily grown due to
heightened demand and a wider array of
services (such as massages, spas, classes
and lessons). While health club
membership declined in 2009, operating
costs have remained relatively fixed, which
has lowered the industry’s profit margin.
D
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Wages
Wages are the largest cost for the industry,
accounting for about 31.3% of revenue in
2014. To minimize this cost, many gym,
health and fitness clubs have implemented
staff that includes part-time employees
that are paid on an hourly basis.
Additionally, gym, health and fitness clubs
also hire salaried staff, including backoffice support, personal trainers and other
professionals, but the majority of these
staff members generate additional
revenue streams for fitness and health
clubs. For example, these staff members
also help attract new clientele, as fitness
classes and training programs are integral
components in developing new business.
The average wage varies between
employing and nonemploying
establishments, as large businesses require
a range of employees to run their
operations, including accountants, financial
analysts and other back-office support staff.
During the next five years, IBISWorld
expects the average size of an industry
establishment to increase, thus indicating
that many gym, health and fitness clubs
will implement more full-time staff,
particularly trainers with more credentials,
thereby increasing the average wage.
Purchases
Purchases represent the second-highest
cost to this industry, comprising about
20.0% of revenue in 2014. Purchases
Sector vs. Industry Costs
Average Costs of
all Industries in
sector (2014)
100
80
Percentage of revenue
Cost Structure
Benchmarks
continued
Industry Costs
(2014)
12.6
8.6
27.1
31.3
60
27.4
40
20
5.1
4.1
6.6
17.1
0
■ Profit
■ Wages
■ Purchases
■ Depreciation
■ Marketing
■ Rent & Utilities
■ Other
20.0
7.4
10.0
15.5
7.2
SOURCE: WWW.IBISWORLD.COM
WWW.IBISWORLD.COM
Gym, Health & Fitness Clubs in the US December 2014 22
Competitive Landscape
Cost Structure
Benchmarks
continued
largely include smaller types of
equipment, office requirements, retail
products and other miscellaneous items.
Purchases can also include food and
beverages that are sometimes sold within
the fitness and recreational sports
centers. Some of the larger centers have
negotiated national buying agreements
with suppliers to secure low equipment
prices, particularly for fitness equipment.
D
ra
ft
Rent and utilities
Rent makes up about 12.0% of industry
revenue in 2014. Many businesses in this
industry do not own their fitness facilities,
and as a result they must rent their
buildings. Additionally, some equipment
used in recreational and fitness centers are
not purchased entirely, but on a “rental”
basis, thus adding to the cost in this
segment. Industry operators incur utility
costs that make up an estimated 3.5% of
revenue, because the industry requires
electricity for lighting, treadmills, crosstrainers, steppers and other electronic
equipment. To lower utility costs, some
centers have implemented energy-efficient
lighting fixtures and automatic switches
and timers.
Advertising
The industry is expected to spend about
10.0% of its revenue on advertising in
Basis of Competition
Level & Trend
ompetition
C
in
this industry is
Highand the trend
is Increasing
During the past five years, the Gym,
Health and Fitness Clubs industry has
become increasingly competitive. Wellfinanced competitors have entered the
industry, and existing regional and
national operators have expanded their
operations. Gym and fitness clubs
typically compete for high consumer
retention rates on the basis of price,
customer service, brand recognition and
types of services offered. For example,
industry operators may offer additional
services, including nutritional programs,
2014, as strong marketing support is
essential for attracting new clientele in
such a highly competitive market. Firms
advertise via TV, direct mail, newspapers,
telephone directories, radio, billboards,
internet websites and other promotional
activities. Advertisements aim to
differentiate firms from competitors by
focusing on amenities, prices, services
and promotional offers. Operators also
try to appeal to the public’s desire to lose
weight, look better and improve health.
Depreciation and other costs
Depreciation of buildings and equipment
represents another significant expense
item for the industry, accounting for about
7.4% of revenue in 2014. Expenditure on
capital includes purchasing new and
replacing old equipment, such as
treadmills and weight machines. To
operate both efficiently and profitably,
firms must continually acquire up-to-date
fitness technology to maintain and attract
their customer base, which adds to
depreciation costs. Other costs include
general administration, IT expenses and
insurance costs, which account for an
estimated 7.2% of revenue. Many
businesses have had to insure their
products against damage, which increases
insurance costs as more consumers use
fitness equipment frequently.
meal planning and facial services. While
facials and nutritional programs are not
included in industry revenue, operators
that offer additional services may
increase their consumer retention rates,
which boosts industry revenue.
Internal competition
Industry operators compete for brand
recognition and member’s word-ofmouth to generate revenue. Many
operators rely on retaining and
developing large membership rates to
WWW.IBISWORLD.COM
Gym, Health & Fitness Clubs in the US December 2014 23
Competitive Landscape
cover their operational costs.
Operators also compete on the basis of
price. For example, gym and health
clubs that offer low initiation fees and
monthly membership will attract
first-time gym members in particular.
Additionally, low-cost membership on
a month-by-month basis appeals to
both budget-conscious consumers and
individuals that do not want to lock in
a year contract. Also, industry
operators may compete for customer
service. In particular, strong customer
service boosts both member attrition
rates but also develops a strong
customer base of individuals that may
be new to gym memberships.
Firms in this industry also compete
with other commercial fitness center and
recreational facilities that are established
and operated by local governments.
Nonprofit and government organizations
have an edge on commercial gyms and
D
ra
ft
Basis of Competition
continued
Barriers to Entry
Level & Trend
arriers to Entry
B
in this industry are
Lowand S
teady
Overall, barriers to entry are relatively
low for the Gym, Health and Fitness
Clubs industry. Prior to the recession,
operators successfully obtained financing
from a range of sources, including
financial institutions, landlords,
equipment manufacturers, private equity
sources and the public capital markets.
However, in 2009, the credit markets
tightened, which has limited further
expansion for many gym, health and
fitness clubs in 2009 and 2010.
Leasing, rather than owning, industry
facilities provides a low-cost option for
potential industry entrants. Additionally,
average wages in the industry tend to be
low, as staff are typically unskilled and
provide training services on a part-time
basis. Equipment costs are relatively low
as well, and have long life spans. Many
start-up gyms use second-hand exercise
equipment to cut down on costs or rent
their equipment.
fitness clubs because they can obtain land
and build centers at lower costs.
Additional services offered by hospitals,
businesses and salons are another source
of competition, adding to the highly
competitive environment. These firms
typically compete based on location,
which is the greatest convenience factor
for the consumer.
External competition
Firms also experience external
competition from entertainment and retail
businesses for the discretionary income of
the specific target markets in this industry.
Industry operators compete with amenity
and condominium clubs, exercise studios,
country clubs, weight-loss centers and
home fitness equipment businesses. Many
other leisure industries, such as bowling
alleys and marinas, also compete with this
industry for leisure time, albeit without
the fitness aspect.
Barriers to Entry checklist
Competition
Concentration
Life Cycle Stage
Capital Intensity
Technology Change
Regulation & Policy
Industry Assistance
Level
High
Low
Growth
Medium
Medium
Light
Low
SOURCE: WWW.IBISWORLD.COM
Barriers to entry in urban markets
include restrictive zoning laws, lengthy
permit processes and a shortage of
appropriate real estate. New entrants
may also incur heavy costs when
acquiring or leasing the required
equipment for members and participants
to use. Access to capital to fund these
startup costs are therefore essential. In
addition, tight credit markets have made
it difficult for small businesses to enter
WWW.IBISWORLD.COM
Gym, Health & Fitness Clubs in the US December 2014 24
Competitive Landscape
the industry since 2009. Lending
practices are expected to become less
stringent in the next five years, however,
which will make it easier for new entrants
to enter the market.
The high cost and lengthy time it
takes to build brand reputation is a
potential barrier to entry. Existing
players have already established trade
names, and new entrants will have to
invest financial resources and time to
persuade consumers to shift away from
established, brand-name gym and
fitness centers.
Industry
Globalization
The Gym, Health and Fitness Clubs
industry has a low level of
globalization; the majority of firms are
small local operators, employing
between one and 19 people or are
nonemployers, which account for about
85.0% of the industry’s total firms.
While the industry is not typified by a
high level of globalization, some of the
industry’s larger players are
increasingly becoming globalized. For
example, Gold’s Gym International Inc.
and Curves International Inc. have
subsidiaries that operate in global
markets. Gold’s Gym International
operates in over 25 countries, while 24
Hour Fitness also enjoys a global
presence with locations throughout
Asia. Globalization is increasing as
national and regional competitors
expand the scope of their operations,
but at this stage, it is relatively low.
ra
in
this industry is
Lowand the trend
is Increasing
D
Level & Trend
lobalization
G
ft
Barriers to Entry
continued
Gym, Health & Fitness Clubs in the USDecember 2014 25
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Major Companies
There are no Major Players in this industry | Other Companies
Due to the fragmented nature of this
industry, no players hold a market share
greater than 5.0%. Moreover, there is
limited financial information available
for players in this industry because many
are private organizations with franchised
operations and, therefore, annual
revenue figures are unavailable.
24 Hour Fitness Worldwide Inc.
ra
ft
Estimated market share: 4.9%
24 Hour Fitness Worldwide Inc. is a
large, privately owned and operated
fitness center chain. Established in 1983,
the company’s first club location opened
in California. With more than 400 clubs
across the United States, 24 Hour serves
nearly 4.0 million members. The
company also offers a plethora of gym
services, including personal training
services, group exercise classes and a
variety of strength, cardio and functional
training equipment. Furthermore, the
company is one of the largest supporters
of amateur athletics in the United States,
serving as the Official Fitness Center
Sponsor of the US Olympic and
Paralympic Teams. 24 Hour also uses
celebrities and professional athletes to
advertise its brand; the company is also
partners with the reality TV show The
Biggest Loser. As a result, these
marketing strategies help differentiate 24
Hour Fitness from its competitors, which
allows the company to strengthen its
market share.
In 2005, 24 Hour Fitness entered a
partnership with New York-based private
equity firm Forstmann Little & Co.
Financier Theodore J. Forstmann
acquired the company for $1.6 billion and
has continued to promote 24 Hour Fitness
as a leader within the fitness industry,
with the aim of continual expansion. The
company has also sponsored the US
Olympic team and was the official fitness
center for the team through the 2008
Olympic Games in Beijing. At the 2010
Winter Olympic Games in Vancouver, 24
D
Other Companies
Hour Fitness provided fitness
ambassadors to NBC staff, including the
broadcast teams, production crews, on-air
talent and other personnel. Since 24 Hour
Fitness is a private company, limited
financial information is available;
however, IBISWorld estimates that the
company will generate revenue of $1.3
billion for 2014.
Life Time Fitness
Estimated market share: 4.1%
Life Time Fitness Inc., under the Life Time
Fitness and Life Time Athletic brands,
operates 105 centers, including sports and
athletics, professional fitness, family
recreation and resorts and spas. The
company offers a range of services, such as
group fitness, yoga, swimming, running,
racquetball, squash, tennis, Pilates, kid
activities and camps, rock climbing and
other services. The company designs and
develops its own centers, with a focus on
providing members with products and
services in the areas of exercise, education
and nutrition. The company currently
operates in Canada and the United States,
primarily in suburban locations. Life Time
Fitness’ business model includes attracting
a larger customer base within the first three
years after a center opens, as well as
retaining members and controlling
expenses. In 2012, the company acquired
the Racquet Club of the South, a tennis
facility in Atlanta that the company
rebranded as Life Time Fitness Atlanta.
Additionally, in 2011, Life Time Fitness
acquired nine fitness facilities from
Lifestyle Family Fitness in Indiana, North
Carolina and Ohio. In 2014, IBISWorld
estimates that company will generate $1.1
billion in revenue.
Bally Total Fitness Holding
Corporation
Estimated market share: 3.1%
Bally Total Fitness Holding Corporation
was incorporated in Delaware in 1983 and
is a commercial operator of fitness centers
Gym, Health & Fitness Clubs in the USDecember 2014 26
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Major Companies
ra
ft
in North America. Bally operates about 60
locations in 18 states and serves one
million active members nationwide. In
March 2010, Bally launched a new
campaign that uses music downloads from
partner Universal Music Group to
motivate its members. In 2014, IBISWorld
estimates that Bally fitness clubs will
generate $829.0 million in revenue.
Most of the company’s locations
operate under the flagship Bally Total
Fitness brand. Bally’s members have
access to pools, aerobic programs, running
tracks and racquet courts, as well as
personal trainers and sports medicine
services. Bally also markets private-label
nutritional products and sells healthrelated products in most of its clubs and
about 7,000 retail outlets. Bally has
followed a strategy of selling high-margin,
multi-club memberships and
consolidating its brand. In addition to the
private-label nutritional products and
in-club retail stores, the company has
diversified its revenue stream through
branded apparel. The move into the
high-end marketplace has caused their
customer base to shift toward a more
senior demographic in the past five years.
However, the company has also
experienced financial difficulty. For
example, in 2008, the company owed
$478.0 million in debt to US Bancorp
and HSBC Holdings. In July 2009, the
company reached an agreement with its
lenders to exit bankruptcy and, under the
deal, the lenders (including JPMorgan
Chase) took a 94.0% share of company
equity and reduced Bally’s debt by
$660.0 million.
D
Other Companies
continued
Town Sports International Holdings
Inc.
Estimated market share: 1.8%
Town Sports International Holdings Inc.
(TSI) is the largest owner and operator of
fitness clubs in the Northeast and MidAtlantic regions of the United States. TSI
owns and operates a number of brands,
including New York Sports Clubs, Boston
Sports Clubs, Washington Sports Clubs
and Philadelphia Sports Clubs. Founded
in 1974, the company now operates over
160 health and fitness facilities and
boasts half a million members. The
company’s business strategy involves
serving densely populated metropolitan
regions and developing locations near
TSI’s targeted customer base.
Town Sports notes that they target
particular clientele, such as individuals in
the 21 to 50-year-old age group, with
income levels between $50,000 and
$150,000 per year. In 2014, IBISWorld
estimates Town Sports International’s
revenue to be $484.0 million.
Curves International Inc.
Estimated market share: 1.8%
Founded in 1992, Curves International
Inc. developed a market niche in fitness
and weight-loss facilities that targeted
women. The company developed a
customer base of 4.0 million members in
90 countries, with over 10,000 Curves for
Women fitness centers. Curves is the
largest fitness franchise in the world,
with the company offering 30 minute
health and weight-loss sessions for
women in Australia, Canada, the
Caribbean, Europe, Mexico, New
Zealand, South America and the US.
In 2008, the company opened
franchises in Ukraine, Slovakia,
Botswana, Bahrain, Qatar and Saudi
Arabia. It also added franchise
establishments in Belgium, Finland,
Jordan, Malta and Senegal. Moreover, in
2009 Curves opened centers in China,
India and the Philippines. IBISWorld
estimates that US segment revenue will
reach $466.0 million in 2014.
Gold’s Gym International Inc.
Estimated market share: 1.5%
Established in 1965, Gold’s Gym
International Inc. serves more than 3.0
million members in 38 US states and 28
Gym, Health & Fitness Clubs in the USDecember 2014 27
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Major Companies
ra
ft
countries. The company offers gym
services that include cardio and strength
training, zumba, yoga, group cycling,
mixed martial arts, muscle endurance
training and Pilates.
In addition to opening franchises, the
company buys smaller regional health
clubs and converts them into Gold’s
Gyms. The company also licenses the
Gold’s Gym name for products including
fitness equipment and accessories,
luggage, T-shirts and men’s and women’s
D
Other Companies
continued
sportswear. In 2004, TRT Holdings
acquired Gold’s Gym for $158.0 million.
The company aims to develop a budgetconscious consumer base by developing
Gold’s Gym Express, which includes
low-cost gym facilities. Gold’s Gym also
continues to maintain its core
weightlifting tradition, which generated
its early success with the company’s
initial Venice beach location. In 2014,
IBISWorld estimates that the company
will generate $389.0 million in revenue.
Gym, Health & Fitness Clubs in the USDecember 2014 28
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Operating Conditions
Capital Intensity | Technology & Systems | Revenue Volatility
Regulation & Policy | Industry Assistance
Capital Intensity
Level
The level
Capital intensity
Capital units per labor unit
0.5
0.4
0.3
0.2
0.1
0.0
Economy
Arts, Entertain- Gym, Health &
ment and
Fitness Clubs
Recreation
Dotted line shows a high level of capital intensity
SOURCE: WWW.IBISWORLD.COM
entry; the total startup costs are low but
are split relatively evenly between capital
and labor.
ft
of capital
intensity is Medium
The Gym, Health and Fitness Clubs
industry is moderately capital intensive.
In 2014, for every dollar spent on wages,
the industry incurs an estimated $0.24 in
capital costs. Wage costs are expected to
account for 31.3% of total industry
revenue. Capital costs are moderate for
the industry and includes the cost of
fitness equipment, buildings, vehicles,
furniture and computers. Nevertheless,
labor costs remain high because of
administration, training, supervision and
maintenance requirements. Gyms and
fitness centers seek to minimize their
labor costs by employing a part-time
labor force and employing instructors
and personal trainers on an as-needed
basis. The industry has moderate capital
intensity despite the low barriers to
D
ra
Tools of the Trade: Growth Strategies for Success
Investment Economy
Recreation, Personal Services,
Health and Education. Firms
benefit from personal wealth so
stable macroeconomic conditions
are imperative. Brand awareness
and niche labor skills are key to
product differentiation.
Information, Communications,
Mining, Finance and Real
Estate. To increase revenue
firms need superior debt
management, a stable
macroeconomic environment
and a sound investment plan.
Heating & Air-Conditioning
Contractors
Weight Loss Services
Traditional Service Economy
Wholesale and Retail. Reliant
on labor rather than capital to
sell goods. Functions cannot
be outsourced therefore firms
must use new technology
or improve staff training to
increase revenue growth.
Hotels & Motels
Gym, Health &
Fitness Clubs
Golf Driving Ranges
& Family Fun Centers
Change in Share of the Economy
Steam & Air-Conditioning Supply
Capital Intensive
Labor Intensive
New Age Economy
Old Economy
Agriculture and Manufacturing.
Traded goods can be produced
using cheap labor abroad.
To expand firms must merge
or acquire others to exploit
economies of scale, or specialize
in niche, high-value products.
SOURCE: WWW.IBISWORLD.COM
Gym, Health & Fitness Clubs in the USDecember 2014 29
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Operating Conditions
Technology
& Systems
Level
The level
players, hearing aids for television
equipment, and other devices that keep
customers entertained during fitness
activities. Centers use computers to
manage operations and to keep a
database of members.
Many of the larger firms strive to offer
customers state-of-the-art training
equipment to bolster their customer
retention. Patrons are looking for added
extras to improve their fitness regimens,
therefore, it is vital for gym, health and
fitness clubs to offer various equipment
options that incorporate the latest
technology. This has encouraged firms to
continually update their equipment. For
example, treadmills can become outdated
within two years.
The Gym, Health and Fitness Clubs
industry has a low level of revenue
volatility. While there are varying degrees
of membership rates across centers,
which increases revenue volatility, the
industry’s diverse array of services and
high level of fragmentation has
minimized revenue volatility over the
past five years. Furthermore, steady
promotion of the health benefits of
exercise by the medical community has
D
Revenue Volatility
ra
ft
of
Technology Change
is Medium
Fitness centers offer electronic payment
options to members. In selecting this
option, on about the same date each
month, a fixed payment is either
automatically transferred via debit
from members’ bank accounts or
charged to members’ designated credit
card. Most fitness centers compete to
be the establishment with the most
state-of-the-art equipment. This
equipment includes the latest
cardiovascular and weight-training
machines. Entertainment units are also
becoming increasingly common in
centers. The units are mounted to
cardiovascular equipment and are
equipped with a color screen for
television viewing, links to MP3
of
Volatility is Low
A higher level of revenue
volatility implies greater
industry risk. Volatility can
negatively affect long-term
strategic decisions, such as
the time frame for capital
investment.
When a firm makes poor
investment decisions it
may face underutilized
capacity if demand
suddenly falls, or capacity
constraints if it rises
quickly.
Volatility vs Growth
1000
Revenue volatility* (%)
Level
The level
supported consumer demand for gym
memberships, which has constrained
fluctuations in industry revenue.
While technically a discretionary
service, health and fitness clubs are
increasingly viewed by consumers as a
vital health expense. Furthermore, the
structure of gym memberships has
slightly mitigated revenue volatility.
Gyms and fitness centers have
traditionally signed up their members for
Hazardous
Rollercoaster
100
10
Gym, Health & Fitness Clubs
1
0.1
Stagnant
–30
–10
Blue Chip
10
30
50
70
Five year annualized revenue growth (%)
* Axis is in logarithmic scale
SOURCE: WWW.IBISWORLD.COM
Gym, Health & Fitness Clubs in the USDecember 2014 30
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Operating Conditions
Revenue Volatility
continued
12 to 24 month periods and typically have
included cancelation fees in their
contracts. These fees often deter
customers from cancelling their
memberships. As competition has
increased over the past five years, many
gyms have offered more flexible
membership options, such as shorter
contract periods and rolling contracts. As
flexible membership options become
more prevalent, revenue volatility is
expected to increase in the coming years.
Regulation & Policy
The general rules and regulations of the
Federal Trade Commission and of other
federal, state, provincial and local consumer
protection agencies apply to franchising,
advertising, sales and other trade practices.
State and provincial statutes and regulations
relevant fitness industry have been enacted
or proposed in all of the states and provinces
across the United States. Typically, these
statutes and regulations prescribe certain
forms and regulate the terms and provisions
of membership contracts, including: giving
members the right to cancel the contract, in
most cases, within three business days after
signing; requiring an escrow for funds
received from preopening sales or the
posting of a bond or proof of financial
responsibility; and in some cases,
establishing maximum prices and terms for
membership contracts and limitations on
the financing term of contracts.
Firms are subject to numerous other
types of federal, state and provincial
regulations governing the sale, financing
and collection of memberships, including
the Truth-in-Lending Act and Regulation Z,
as well as state and provincial laws
governing the collection of debts. These laws
and regulations are subject to varying
interpretations by a large number of state
and federal enforcement agencies.
Under the “cooling-off” statutes
employed in most states and provinces,
new members of fitness centers have the
right to cancel their memberships for a
period of three to fifteen days after the
date the contract was entered and are
entitled to refunds of any payment made.
The amount of time new members have to
cancel their membership contract depends
on the applicable state or provincial law.
Advertising of nutritional products is
subject to regulation by one or more federal
agencies, including the Food and Drug
Administration (FDA) and the Federal
Trade Commission (FTC). For example, the
FDA regulates the formulation,
manufacture and labeling of vitamins and
other nutritional supplements, while the
FTC principally regulates marketing and
advertising claims. Industry firms are also
subject to several state and federal labor
laws governing the relationship with
employees, such as minimum wage
requirements, overtime and working
conditions and citizenship requirements.
The level of industry assistance is low,
but it is increasing as more institutions
promote the benefits of assistance. Such
assistance is a significant benefit for the
industry, as it reduces expenses and
creates demand. The industry received
indirect assistance from the federal
government in 2009 under the $787.0
billion stimulus package, or the American
Reinvestment and Recovery Act of 2009.
The Department of Health and Human
Services has been allocated $1.0 billion
for a Prevention and Wellness Fund.
The National Association for Health
and Fitness (NAHF) is a nonprofit
organization that promotes physical
fitness and sports and supports Governor
and State Councils that promote such
Level & Trend
he level of
T
D
ra
ft
Regulation is
Lightand the
trend is S
teady
Industry Assistance
Level & Trend
he level of Industry
T
Assistance is L ow
and the trend
is Increasing
Gym, Health & Fitness Clubs in the USDecember 2014 31
WWW.IBISWORLD.COM
Operating Conditions
ra
ft
activities. The association produces
newsletters on strategies and successful
approaches to increasing physical activity
and improving health. The International
Health, Racquet & Sportsclub Association
also supports the industry and is a
nonprofit trade association representing
more than 9,100 health, racquet and
sports clubs worldwide. This association
provides media articles and press
releases that promote the benefits of
keeping fit and active. Therefore, this
association helps drive industry demand.
The Fifty-Plus Fitness Association
(FPFA) is another nonprofit organization,
which was established 20 years ago. This
D
Industry Assistance
continued
association’s mission is to promote an
active lifestyle for the older population.
The organization started at Stanford
University as an outgrowth of some
medical research on the value of exercise
for older persons. The FPFA currently has
about 1,000 members across the United
States. The association also publishes a
newsletter and distributes books and
videos. In the past, it has offered a sixweek “Fifty-Plus Fitness Challenge Camp”
on the Stanford University Campus that
involved the participants in a variety of
physical activities. Some facilities are
initially established with the assistance of
government grants.
Gym, Health & Fitness Clubs in the USDecember 2014 32
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Key Statistics
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Sector Rank
Economy Rank
Revenue
(%)
3.2
5.9
0.0
-1.8
2.2
2.3
2.0
2.5
2.4
3.1
3.2
2.8
3.1
2.0
7/19
280/705
Key Ratios
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Sector Rank
Economy Rank
IVA/Revenue
(%)
47.70
47.25
45.91
47.96
46.50
43.51
45.66
45.74
46.64
47.33
47.80
47.40
47.00
46.52
46.27
6/19
148/705
Establishments
31,988
32,432
33,269
33,451
32,864
32,820
33,068
33,385
33,527
34,023
34,331
34,540
35,112
35,498
35,818
5/19
161/704
Enterprises Employment
28,779
488,795
29,000
507,921
30,154
541,562
30,269
550,634
29,031
536,231
28,912
527,086
29,136
548,375
29,365
561,536
29,501
573,328
29,894
583,075
30,031
594,153
30,199
603,660
30,331
610,225
30,604
619,989
30,818
628,668
5/19
3/19
149/704
65/705
Exports
---------------N/A
N/A
Industry
Value Added
(%)
2.2
2.9
4.5
-4.8
-4.4
7.3
2.1
4.5
3.9
4.1
2.4
1.9
2.1
1.5
3/19
179/705
Establishments
(%)
1.4
2.6
0.5
-1.8
-0.1
0.8
1.0
0.4
1.5
0.9
0.6
1.7
1.1
0.9
8/19
269/704
Enterprises Employment
(%)
(%)
0.8
3.9
4.0
6.6
0.4
1.7
-4.1
-2.6
-0.4
-1.7
0.8
4.0
0.8
2.4
0.5
2.1
1.3
1.7
0.5
1.9
0.6
1.6
0.4
1.1
0.9
1.6
0.7
1.4
9/19
10/19
246/704
297/705
Exports
(%)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Imports/
Demand
(%)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Figures are inflation-adjusted 2014 dollars. Rank refers to 2014 data.
ft
Annual Change
Industry
Value Added
($m)
10,532.6
10,765.3
11,080.3
11,579.7
11,023.3
10,540.4
11,314.8
11,557.3
12,081.5
12,552.8
13,069.5
13,378.5
13,635.7
13,915.9
14,118.5
5/19
200/705
ra
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Sector Rank
Economy Rank
Revenue
($m)
22,080.6
22,783.4
24,136.1
24,145.4
23,707.9
24,227.5
24,781.4
25,269.1
25,904.3
26,522.4
27,339.2
28,225.2
29,014.0
29,913.4
30,511.7
4/19
305/705
D
Industry Data
Exports/
Revenue
(%)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Revenue per
Employee
($’000)
45.17
44.86
44.57
43.85
44.21
45.96
45.19
45.00
45.18
45.49
46.01
46.76
47.55
48.25
48.53
15/19
675/705
Wages/Revenue
(%)
31.10
30.85
31.01
31.06
30.20
29.31
29.56
29.94
30.74
31.33
31.50
31.18
30.70
30.22
30.07
7/19
158/705
Imports
---------------N/A
N/A
Wages
($m)
6,867.2
7,028.8
7,484.0
7,499.1
7,158.9
7,100.1
7,325.0
7,564.8
7,962.7
8,309.2
8,613.2
8,800.4
8,906.4
9,040.0
9,175.6
5/19
169/705
Domestic
Demand
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Health Club
Memberships
(Mils)
46.7
47.3
47.5
47.7
40.3
50.2
51.4
51.7
52.6
54.1
54.8
56.0
56.9
58.2
58.8
N/A
N/A
Imports
(%)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Wages
(%)
2.4
6.5
0.2
-4.5
-0.8
3.2
3.3
5.3
4.4
3.7
2.2
1.2
1.5
1.5
2/19
91/705
Domestic
Demand
(%)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Health Club
Memberships
(%)
1.3
0.4
0.4
-15.5
24.6
2.4
0.6
1.7
2.9
1.3
2.2
1.6
2.3
1.0
N/A
N/A
Employees
per Est.
15.28
15.66
16.28
16.46
16.32
16.06
16.58
16.82
17.10
17.14
17.31
17.48
17.38
17.47
17.55
11/19
295/704
Average Wage
($)
14,049.24
13,838.37
13,819.29
13,619.03
13,350.40
13,470.48
13,357.65
13,471.62
13,888.56
14,250.65
14,496.60
14,578.41
14,595.27
14,580.90
14,595.30
16/19
672/705
Share of the
Economy
(%)
0.07
0.07
0.07
0.08
0.08
0.07
0.08
0.08
0.08
0.08
0.08
0.08
0.08
0.08
0.08
5/19
200/705
SOURCE: WWW.IBISWORLD.COM
Gym, Health & Fitness Clubs in the USDecember 2014 33
WWW.IBISWORLD.COM
Jargon & Glossary
Industry Jargon
BABY BOOMERA person born between 1946 and 1964
accounting for a major proportion of the population.
CARDIOVASCULAR EQUIPMENTEquipment used for
aerobic exercise, meant to be used at light to medium
intensity for a long period of time, e.g. treadmills,
elliptical trainers and stationary bikes.
BARRIERS TO ENTRYHigh barriers to entry mean that
new companies struggle to enter an industry, while low
barriers mean it is easy for new companies to enter an
industry.
CAPITAL INTENSITYCompares the amount of money
spent on capital (plant, machinery and equipment) with
that spent on labor. IBISWorld uses the ratio of
depreciation to wages as a proxy for capital intensity. High
capital intensity is more than $0.333 of capital to $1 of
labor; medium is $0.125 to $0.333 of capital to $1 of labor;
low is less than $0.125 of capital for every $1 of labor.
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ft
CONSTANT PRICESThe dollar figures in the Key Statistics
table, including forecasts, are adjusted for inflation using
the current year (i.e. year published) as the base year. This
removes the impact of changes in the purchasing power of
the dollar, leaving only the “real” growth or decline in
industry metrics. The inflation adjustments in IBISWorld’s
reports are made using the US Bureau of Economic
Analysis’ implicit GDP price deflator.
D
IBISWorld Glossary
DOMESTIC DEMANDSpending on industry goods and
services within the United States, regardless of their
country of origin. It is derived by adding imports to industry
revenue, and then subtracting exports.
EMPLOYMENTThe number of permanent, part-time,
temporary and seasonal employees, working proprietors,
partners, managers and executives within the industry.
ENTERPRISEA division that is separately managed and
keeps management accounts. Each enterprise consists of
one or more establishments that are under common
ownership or control.
ESTABLISHMENTThe smallest type of accounting unit
within an enterprise, an establishment is a single physical
location where business is conducted or where services or
industrial operations are performed. Multiple
establishments under common control make up an
enterprise.
EXPORTSTotal value of industry goods and services sold
by US companies to customers abroad.
IMPORTSTotal value of industry goods and services
brought in from foreign countries to be sold in the United
States.
INDUSTRY CONCENTRATIONAn indicator of the
dominance of the top four players in an industry.
Concentration is considered high if the top players account
for more than 70% of industry revenue. Medium is 40% to
70% of industry revenue. Low is less than 40%.
PILATESA physical fitness system developed in the
early 20th century by Joseph Pilates with a focus on the
strength and endurance on core muscle groups.
RETENTION RATEA rate comparing the number of
new gym memberships to canceled gym memberships.
INDUSTRY REVENUEThe total sales of industry goods
and services (exclusive of excise and sales tax); subsidies on
production; all other operating income from outside the
firm (such as commission income, repair and service
income, and rent, leasing and hiring income); and capital
work done by rental or lease. Receipts from interest
royalties, dividends and the sale of fixed tangible assets are
excluded.
INDUSTRY VALUE ADDED (IVA)The market value of
goods and services produced by the industry minus the
cost of goods and services used in production. IVA is also
described as the industry’s contribution to GDP, or profit
plus wages and depreciation.
INTERNATIONAL TRADEThe level of international trade
is determined by ratios of exports to revenue and imports
to domestic demand. For exports/revenue: low is less than
5%, medium is 5% to 20%, and high is more than 20%.
Imports/domestic demand: low is less than 5%, medium is
5% to 35%, and high is more than 35%.
LIFE CYCLEAll industries go through periods of growth,
maturity and decline. IBISWorld determines an industry’s
life cycle by considering its growth rate (measured by IVA)
compared with GDP; the growth rate of the number of
establishments; the amount of change the industry’s
products are undergoing; the rate of technological change;
and the level of customer acceptance of industry products
and services.
NONEMPLOYING ESTABLISHMENTBusinesses with no
paid employment or payroll, also known as nonemployers.
These are mostly set up by self-employed individuals.
PROFITIBISWorld uses earnings before interest and tax
(EBIT) as an indicator of a company’s profitability. It is
calculated as revenue minus expenses, excluding interest
and tax.
VOLATILITYThe level of volatility is determined by
averaging the absolute change in revenue in each of the
past five years. Volatility levels: very high is more than
±20%; high volatility is ±10% to ±20%; moderate volatility
is ±3% to ±10%; and low volatility is less than ±3%.
WAGESThe gross total wages and salaries of all
employees in the industry. The cost of benefits is also
included in this figure.
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