Membership in U.S. health clubs reached an all-time high in 2016, thanks to the growing popularity of boutique fitness studios. But the 2017 IHRSA Health Club Consumer Report also came with a warning that health club growth is likely to slow and underscored the challenges clubs still face attracting Gen-Z and senior generations as well as retaining Millennials.

Overall, the report, based more than 24,000 interviews, showed that membership in U.S. health clubs reached 57.3 million in 2016, an increase of 3.6 percent from 2015. Another 9.3 million non-members exercised at clubs and in all 22 percent of Americans used a health club.

But many of the findings underscored the strength of the boutique studio movement.

For instance, 18.2 million Americans indicated they belonged to a studio, an improvement of 15 percent versus 2015. By comparison, 32.2 million Americans were members of a traditional commercial health club, such as a multipurpose, fitness-only and/or corporate/business facility, a decline of 3 percent from 2015.

The average age of a studio member was 30, nearly a decade younger than the overall average for all facilities.

Finally, studios are attracting a more diverse audience. When compared to the U.S. population, studio consumers were more likely to:

  • Be of Asian/Pacific-Islander descent, especially members of mind-body and indoor cycling/ rowing studios;
  • Be Hispanic, particularly among users of Boot Camp/Cross Training and P/SGT studios;
  • Be African-American/Black, with higher incidence rates of memberships to boxing/martial arts/MMA and indoor cycling/rowing studios.

IHRSA wrote in its report, “If this trend continues in the years to come, studios may reap the profits of serving a consumer base that seems to be overlooked by other commercial clubs.”

Collectively, studio facilities claimed 40.7 percent of total membership. Among studio facilities, personal and small group training (P/SGT) ranked first in market share, as 13 percent of members reported belonging, followed by yoga/Pilates/barre, 9.2 percent; indoor cycling/rowing, 7.3 percent; boot camp/cross training, 4.5 percent; boxing/martial arts/MMA, 3.7 percent; and sports specific, 2.9 percent.

Men were had higher participation rates in boot camp/cross training and sports-specific studios and were more likely to belong to multipurpose facilities. Women were more likely to enroll at yoga/Pilates/barre studios.

Overall, the report pointed to healthy underlying trends for the health club industry. Approximately 19.3 percent of Americans belonged to a health club in 2016, up from 18.8 percent in 2015 and 16.2 percent in 2009. In 2016, health club members utilized a health club or studio for a total of 5.7 billion visits, representing a 31 percent increase in volume since 2009.

The report’s conclusions came with a wrap-up of ten trends highlighting the opportunities and challenges for club operators and equipment suppliers based on the data:

  1. Slowdown expected: Despite a healthy growth rate in recent years, independent industry projections indicate slowed growth in upcoming years amid “tough competition.” IBISWorld, for one, estimates an annual growth rate of 1.5 percent from 2017 to 2022 for gyms, health clubs and studios. IHRSA advises club operators to “set themselves apart to succeed” by better understanding their member needs and target market. Newcomers were cautioned about looking to get into a “maturing industry” as well as existing operators looking to expand. IHRSA, however, added “Nonetheless, there are opportunities for success in serving specific preferences among demographic groups and special populations.”
  2. Opportunities to target youth: From 2012 to 2016, the percentage of club members under the age of 18 increased 5 percent, tied with the 55-plus group for the greatest five-year growth. But they remain underrepresented as a percent of the overall population. Opportunities remain to engage the youth population in developing healthy activity habits to stave off obesity and complement participation in sports. Partnerships with educational and healthcare institutions may help clubs reach youth. Seemingly encouraged by their studio-attending parents, Gen- Z had a high participation rate in studios in comparison with previous years. IHRSA added, “Operators and developers of full-service clubs may want to reconsider ways to attract this segment, such as educating parents about the benefits of youth-specific fitness and sports programs offered by their clubs.”
  3. Attract and retain Gen X: Gen-X (35 to 54) encompassed 33 percent of the total share of membership last year yet is often overlooked with the attention paid to Millennials and Boomers. Challenges dealing with younger kids and aging parents can make a club “an ideal ‘third place’ to relieve stress, improve energy, and stay healthy.” Suggestions to improve retention include emphasizing a loyalty program since Gen-X members are likely more grounded than in their younger days, offering shorter classes or training sessions to meet time constraints, and providing inclusive family fitness and sports programs.
  4. Appeal to older groups: The 55-plus group is tied with the under-18 segment as the fastest-growing age bracket from 2012 to 2016 but likewise underrepresented. Often with more leisure time, discounted memberships for seniors can fill off-peak hours at clubs. Programs ranging from aquatic fitness, gentle yoga, and low-impact dance/cardio classes, to circuit classes and sports-specific fitness for tennis or golf offer appeal to seniors. Hiring fitness professionals with credentials in managing arthritis and other age-related challenges can make seniors feel more welcome.
  5. Maximize Millennials: In 2012, members of this 18-34 age group accounted for 37 percent of total members; in 2016, they made up 28 percent of total membership. The average membership tenure for the youngest cohort in this group – 18 to 24 – is also one year less than the overall average, at 3.5 years. Given that many are starting careers and families, members may have exchanged their monthly memberships for flexible, pay-as-you-go access to studio facilities. IHRSA said club operators should reevaluate existing offerings to make sure they meet Millennial’s needs but also incorporate more specialized and customized training that are part of the appeal of boutiques.
  6. Attract lower income households: With more discretionary income and time-flexibility, higher earning households not surprisingly remain the biggest percentage of club members. But inactivity rates were 40 percent among the lowest income group, more than twice that of the highest income segment (18 percent). Ways to serve lower income consumers include affordably priced clubs. Nearly three out of five members with annual HHI under $25,000 paid less than $25 per month. Promoting small group training (SGT) that’s less expensive than personalized training also holds appeal.
  7. One-on-one and small-group training can both win: Small group training (SGT) has grown rapidly over the past several years and some believe that’s coming at the expense of personal training. In 2016, 26 percent of members engaged in SGT, which represents twice the market penetration of personal training utilization. But personal training usage among health club members still increased slightly from 2015 to 2016, from 12 percent to 13 percent, indicating both can work for clubs. One-on-one training skews male and older demographics while SGT, especially popularized by the studio phenomenon, veers toward females and a younger crowd. Additional education for personal trainers is often required to stand out with SGT sessions. Niche opportunities also still exist. IHRSA stated, “By starting small and setting your business apart as a specialist, such as small group training for female runners, one-on-one training for the weekend warrior, or a club concept built around a proprietary fitness protocol, such as a 90-day exercise program with follow-up training, you may be setting your company up for long-term success.”
  8. Encouraging frequent attendance: Forty-four percent of health club members reported having used their health club for at least 100 days in 2016. And average membership tenure for core members in 2016 was 5.8 years, one year longer than the overall average for all members. So converting casual to core members “can increase a club’s bottom line not only through continued membership dues revenue, but through ongoing exposure to non-dues services for which core members may be more likely to pay an additional fee.”
  9. Embrace multi-club users: In 2016, more than 12 million health club members belonged to more than one facility, representing 22 percent of total memberships. Millennials are driving multi-club utilization and members of personal and small-group training (P/SGT) and mind-body studios had the highest likelihood of multi-club memberships among commercial facilities. Multipurpose or fitness-only clubs may want to improve their training and mind-body offerings. Highlighting some studio-like features not offered by nearby facilities may also attract the multi-facility user. Wrote IHRSA, “If health clubs are moving into the realm of commodities, these multi-club members and users are critical drivers for growth.”
  10. Equipment manufacturers must adapt to studio and small group training: For the second consecutive year, growth in engagement in classes and training formats outpaced equipment utilization, driven by part by participation in studios and small group training. Suggestions for equipment manufacturers to adapt include diversifying offerings beyond traditional health and fitness club equipment, tapping technology that enables equipment users to track progress and socialize, and exploring emerging technologies such as virtual reality that can deliver an immersive “fitness experience.” Momentum around functional accessories (suspension training tools, kettlebells, medicine balls, etc.) can be further addressed, especially if products can fit the budgets and space limitations of smaller “micro-clubs” and studios.

The full report is available for purchase HERE.

Photo courtesy IHRSA