Wednesday, December 31, 2008

Area Gyms Face Crunch

“Due to the souring economy, area health club owners anticipate a slight decrease in the number of new members who traditionally sign up after the holidays. But their lower expectations for the new year are in line with industry reports that say the growth in health club memberships across the country is showing the effects of the national recession. No local club reports shrinking membership rolls. But faced with fewer new members, gym owners are devising strategies to retain as many of the new faces as they can. ‘I think we are going to be OK,’ said Donna Bailey, co-owner of Diamond Gym in Horseheads. ‘We may not see as many new people signing up as we have in past years, but we'll see a lot of old faces renewing, and that's exciting.’ According to the International Health, Racquet and Sportsclub Association in Boston, total median revenue -- dues, fees, merchandise and other sources -- for the second quarter increased by a mere 1 percent, from $1.67 million to $1.69 million, from the same three-month period in 2007. Those are the latest figures available. When it comes to membership dues only, clubs reported total median revenue of $1.07 million, compared with $1.06 million in the second quarter of 2007. ‘The steady performance demonstrated by leading health clubs reflects the industry's potential to maintain growth during challenging economic times,’ Katie Rollauer, the association's senior research manager, said in a statement. The report also said that while membership revenue growth this year has been flat, compared with other quarters of double-digit increases, many clubs are offsetting the lack of growth by mining other non-membership revenue sources. Those can include nutritional services, personal training fees or specialized members' programs, such as the association's ‘I Lost It At The Club’ campaign, all of which are intended to increase clubs' retention rates. Health club owners agree they see a flood of new members during the first two months of each year, as people try to burn off the extra weight they've put on in November and December. Bailey says the average holiday bump at Diamond Gym, where the enrollment is about 1,200 members, is close to 20 percent. Jennifer Yartym, director of Healthworks Wellness and Fitness Club in Painted Post, reports a similar post-holiday membership increase. And so does Elmira Fitness Center's Marc Monichetti. ’Around the middle of January, when people have gotten over the holiday season they decide this is the year they get into shape,’ he said. ‘In most years, it's been up about 10 percent, but it has been as high as 15 percent.’ Yartym said Healthworks, which is owned by Guthrie Health Systems in Sayre, has about 2,000 members and the post-holiday increase of about 10 percent is about the same as its local competitors. But with an eye on the influx, Healthworks holds an open house in early January to market the center's services. New members get a free month and the club's initiation fee is waived. But getting new members in the door is only half the battle. The other half is ensuring the newbies become long-term members. It's typical, Monichetti says, for the new members to let their memberships lapse after they lose their new-found enthusiasm for working out. But putting a finger on the reason can be difficult. ‘It could be the effects of the recession, but there could be other reasons, like for us, stronger competition from downtown and another gym on the Southside,’ he said. One way around the loss of the new members is offering a better product, Monichetti said. Other gym owners agree, saying customer service can be an important factor in making the new members feel less intimidated. ‘A lot of facilities are turning into self-service operations,’ Bailey said. ‘So just being there for the members, that in itself will help the situation about retaining them.’”

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