3 Health Club Industry Trends To Guide Your Fitness Business Strategy

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Here’s the good news for owners and operators of gyms, health clubs, and fitness businesses in general, according to IHRSA the global number of health club members increased 33.60% from 2008 – 2017, with the health club industry, in general, comprising $87.2 Billion in revenue in 2017. You can learn more details by purchasing the IHRSA 2018 Global Report: The State of the Health Club Industry.

At the same time the “wellness” industry, which comprises fitness, nutrition, travel, and more, has grown even more robustly. According to the Global Wellness Institute the global wellness economy is a $4.2 trillion market and grew 12.80% alone from 2015-2017. You can download their report for free here.

So what do these eye-popping stats mean for health club, gym, and fitness business owners and operators? Well understanding what is driving this growth can help with creating a sound profitable business strategy and in the end, in the fitness business, good strategy is all about understanding what is happening with consumers in the U.S. and around the world.  For more information, view The Ultimate Health Club Management Guide to learn how to operate a successful health club business.

Here are three health club trends you should keep in mind as you work on your fitness business strategy going forward.

1. Consumer Spending

How customers spend their money has been going through a shift for several decades now. This shift presents itself in a lot of ways but for all consumer markets including fitness, gyms, health clubs, and wellness businesses are either moving to the higher end of luxury or the more value-based end of budget offerings. Deloitte’s very recent report based on a late 2018 survey titled Consumer Products Bifurcation supports this reality of changing consumer spending trends. Here is a quote:

“We surveyed more than 3,000 consumers to understand which factors drive consumer buying patterns and, in particular, how income cohort and change in financial position impact purchase behavior. We also analyzed brand performance of over 1,100 brands to understand who is winning in this era of bifurcation. What we found was that income bifurcation is widening, and this bifurcation is altering purchase behaviors differently by consumer products category.”

Guess which consumer category had one of the highest degrees of bifurcation in spending? Health and beauty was one of the top ones, meaning that people are choosing a wider range of products and services from inexpensive to uber luxurious in health and fitness. This trend is clearly seen in fitness, gym, and health club offerings today. Equinox with its hotel, travel, upscale clubs, and Soul Cycle brands offer experiences at much higher prices and with great luxury. Even Europe’s McFit is coming to the United States to deliver even more super-luxury gyms in California. Meanwhile, budget models like Planet Fitness , where revenue has increased more than 30% over the past year and its valuation has nearly quadrupled since it went public in 2015, have garnered large market share and growth by being much less expensive and more accessible to value-oriented consumers.

From a strategic perspective what this means is that gym and health club brands need to drive their business based on consumer spending trends and seek to move to lower price point value propositions or higher price point and luxury positions. My recent post on Four Lessons Health Club, Gym, And Fitness Businesses Can Learn From Starbucks To Win Over The Modern Fitness Customer supports this strategic view as well given what Starbucks is doing with their upscale Roastery concept. More than ever to succeed you have to differentiate your offering with this spending trend in mind.

2. Health and Fitness Lifestyle As A Status Symbol

Another major consumer trend driving health, wellness and fitness which many health club and gym brands are benefiting from and will continue to, is the notion of “health being wealth”. Jack Ma, Chairman and Founder of Alibaba, spoke at Alibaba’s Gateway ’17 summit in Detroit, where he summed up this growing trend:

“Today’s customers want to be healthy and happy, no matter who they are. Owning the most expensive or the latest goods has taken a back seat to looking good and feeling good, and consumers are showing an increasing preference for participating in activities and indulging in experiences that promote their well-being and sharing those experiences with their friends.”

Eating healthily, exercising regularly and monitoring one’s health have become a lifestyle choice. Wellness is the new affluence and status symbol. Wellness has become a luxury lifestyle to be enjoyed and flaunted. Here is a quote from the Global Wellness institute that sums the dynamic up nicely:

“Wellness sectors are no longer siloed industries. They will increasingly converge as we integrate wellness into our homes and communities, our work, and our travel.”

You might find this article and its links on the Wellness Transformation of Luxury interesting and valuable. Consumers’ crave for wellness is influencing almost every market and destroying old stereotypes. From travel and spas to healthy eating, athleisure fashion, fitness, and beauty, a wellness mindset is permeating all aspects of our daily lives. What this can mean for health club, gym, and fitness studio offerings is the chance to create even more integrated services and experiences, which many of the leading brands are doing. From the Equinox Furthermore lifestyle brand, to Airbnb wellness and fitness travel experiences, operators who add nutrition, travel, spa, and other integrated wellness lifestyle options and services will be able to generate new ancillary revenue opportunities while differentiating their offerings.

3. The Health Care Crisis And Being CEO Of Your Own Health

Medical professionals have traditionally practiced curative medicine; they seek to cure existing medical conditions. However, preventative health care has become increasingly relevant and popular. With rising premiums and deductibles for health care in the U.S. people are increasingly seeing a direct economic impact on their decisions regarding health.

Many healthcare professionals now suggest a healthy lifestyle, from the food people consume to their activity levels, as the best means of preventing poor health. As mentioned it is arguably much cheaper than curative solutions. Secondly, it’s a proactive approach that yields many benefits other than not being ill. From 2000 to 2010, the number of healthcare professionals that recommended healthy eating and regular exercise to their patients rose by 10%. This will continue to rise.

Disciplines like yoga, for example, have grown in popularity by 50% from 2012 until today. Gym memberships, as mentioned before, have almost doubled in popularity since 2000. The growth of active aging as a necessary movement for the exploding population of Boomers is also contributing to the idea that consumers need to maintain their health through preventative methods. The market for fitness facilities and classes has never been more lucrative or popular than it is today, and a large part of that is due to a shift to preventative health care. Increased consumer awareness toward preventive health care combined with an empowered and self-directed consumer who wants to take charge of their health and, at times, experiment with wellness alternatives to traditional health care medicines, therapies, and procedures is laying a foundation for growth in the second half of the decade and beyond.

Health clubs, gyms, and fitness businesses should be mindful of programming that is more integrative, and specific in the benefits from a prevention perspective. Classes, education, and longevity solutions will continue to emerge in the industry to meet the growing need for primary prevention via fitness, proper nutrition, and mindfulness, among other dynamics. This market will continue to be a growing one which operators will want to serve.

So what do you think about the three consumer trends you should keep in mind when working on your health club, gym, or fitness business strategy? I’d love to hear your thoughts and the team at ABC would be delighted to help you with your plans and strategies around your fitness business in general. Just drop me a note here on Linkedin.

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Mike Escobedo serves as Chief Customer Officer for ABC Financial Services. He has over a decade of experience serving customers in the fitness studio, gym, and health club industry in a variety of roles. Mike is also a co-founder of Industry FIT, which offers health club operators insights and innovative ideas worth sharing. With a background in technology, service, and operations, Mike supports thousands of fitness facilities conducting millions of member touches each year. You can learn about becoming member-centric and more by following Mike on Facebook, Twitter, and Instagram.

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