This Report Should Be Part of Your Strategy for a Better 2020

Your club is probably bustling with members who are reviewing and revising their goals. You should be doing the same—and "The 2019 IHRSA Profiles of Success" could be your key to success.

Now’s the perfect time to take a thoughtful, thorough look at your business’ metrics and then compare them with the performance of other similar clubs. How else can you tell whether you’re doing worse—or, ideally, better—than the competition?

Fortunately, IHRSA’s newest research report makes this complex task simple.

The 2019 IHRSA Profiles of Success, which was published in November, provides important benchmarks and detailed data on financial and other operational indicators, such as revenue, nondues revenue, membership growth, payroll, retention, and EBITDA. The figures reflect the results of a select group of leading clubs that contributed to IHRSA’s Industry Data Survey (IDS).

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The following—to whet your interest—are the 10 key findings from the report:

1. Revenue

Responding clubs reported a median revenue growth of 4.3% between 2017 and 2018, though the figure varied by club type. Facilities that were part of a chain reported greater revenue growth (+7.1%) than independent ones (+3%).

2. Retention

Overall, the respondents indicated a median retention rate of 65.8%. Independent clubs managed 73.2%, while clubs that were part of a chain posted a 62.3% rate.

3. Revenue Per Member

The median annual revenue per member was $753.80 in 2018. The figure for the large-club segment (60,000-plus square feet) was $1,134.80, while, for the smallest clubs (under 20,000 square feet), it was $523.50.

4. Membership Growth

The month of January produced the highest percentage (10.3%) of all new accounts acquired during 2018. December, at 9.1%, wasn’t too far behind.

5. Membership Costs

Median sales and marketing costs per member were $123.59 in 2018—a 20.4% increase over 2017, when clubs spent $102.61.

6. Labor Costs

Clubs, overall, spent 41.9% of total revenue on payroll in 2018. Multipurpose clubs spent 44.5%, and fitness-only facilities spent 34.1%.

7. Capital Expenditures

Clubs, overall, reported reinvesting a median of 5.6% of total revenue ($284,000) in their business in 2018. A median of 1.3% of total revenue ($66,795) was spent on fitness equipment.

8. Nondues Revenue

Of the seven profit centers analyzed, personal training was No. 1 with respect to sales volume, producing 8.3% of total revenue in 2018.

9. Profitability

Small-group training (SGT) was the most profitable department among the seven profit centers analyzed, producing a margin of 43.7%.

10. Facility Costs

Approximately 8.5% of total revenue was allocated to building expenses and land rental in 2018. Real estate and property taxes consumed a median of 1.8% of total revenue.

I’d like to extend my special thanks to the 115 club companies, representing a total of 12,289 facilities, that responded to IHRSA’s latest IDS; each received a complimentary copy of the report. Visit the IHRSA research page to learn how you can participate in future IHRSA research surveys.

Finally: best wishes for a happy, healthy, and prosperous New Year!

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Author avatar

Joe Moore

Joe Moore previously served as IHRSA's President & CEO. Under his leadership, IHRSA established partnerships with the American Heart Association, the American Council on Exercise, the National Coalition to Promote Physical Activity, and several other national organizations that continue to this day.