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2019, A Year of Significant Disruption:

Divergent Prognostications for the Remainder of 2019

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Stephen TharrettStephen Tharrett

On the eve of each New Year, industry experts and fortune tellers hunker down over their computers, or in some instances, smart phones, studying fitness industry trends, such as those produced by ACE, ACSM and ClubIntel, along with cultural and socioeconomic disruptions. Using the information they glean from these various sources, the proclaimed experts proceed to forecast, or at least predict, what may happen in the upcoming calendar year. For these experts, the goal is to be the voice of the future, an industry prophet of hope, and to provide a degree of clarity on what might be expected in the upcoming year, or as T.S. Eliot so eloquently said, "For last year's words belong to last year's language, and next year's words await another voice."

Mark WilliamsonMark Williamson

As we steadily move through 2019, our objective with this article is to lend an informed and divergent voice to the fitness industry language of this year, offering up predictions as the year continues that, in some instances, wander from mainstream thought. We understand our prognostications are as likely to be right as wrong, and with any luck, they will bring forward insights to help fitness industry professionals map out their expectations and strategies for 2019 and beyond, including those that, at the moment, might be unforeseen. Mark Twain said, "Prophesy is a good line of business, but it is full of risks." So, it is with humility, and a touch of thoroughly modern intellect, that we offer up our prognostications for the remainder of 2019 and assume the risk that we may be as wrong as we are right.

Seven Divergent Prognostications for the Remainder of 2019

1. Too much of a cheap thing is now a reality. Ever since the great recession of 2008, budget clubs, or as some prefer to call them, high-volume, low-price clubs (HV/LP), have grown exponentially compared to more traditional industry segments. According to data from IHRSA's 2018 Health Club Consumer Report, approximately 40% of health club members report being members of these "Dollar Club" versions of fitness. Since 2014, the percentage of U.S. health club members who report belonging to these clubs has consistently hovered around 40%. Recently, we did some exploration of the budget market using data from IHRSA, the U.S. Census Bureau, and some plain old-fashioned detective work on the internet. Here is what we found:

  • Over the past three years, the total population of Americans who claim to be members of commercial budget clubs (we removed all non-profits) grew by 16% compared to the overall industry average of 12%. Among the various industry segments, the total growth in budget club membership was the lowest in the industry other than for non-profits and YMCAs/YWCAs/JCCs.
  • As of YE 2017, there were 14 million members of commercial budget clubs, representing 4.7% of the total U.S. population over the age of six.
  • As of the fall of 2018, there were approximately 2,815 budget clubs in operation in the U.S., representing approximately 7.3% of all U.S. clubs (total club count based on 2018 IHRSA data).
  • There is an average of 5,528 health club members per budget club in the U.S. (based on total U.S. member population and total budget club counts).
  • Depending upon the state in which one resides, the estimated club members per existing budget club ranges from as few as 2,259 to just over 12,000. If you look at the 30 Metro markets that IHRSA has member penetration data for and then take the actual Census counts for those areas, it shows that the number of members per existing budget club ranges from a low of 2,500 in Raleigh-Durham, North Carolina. to as many as 15,000 in Minneapolis-St. Paul, Minnesota.
  • Depending upon the state or metro area in which one resides, the total population over the age of six per existing budget club is approximately 10,000.

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