Premium Partners

Global Trends, Part 1

These five global trends can affect how you run your business.

The health and fitness industry has experienced incredible growth in the past two decades. What just 10 years ago was a domestic industry of slightly more than 26 million members and 13,000 commercial clubs is now a domestic industry of just over 41 million members and 29,000 commercial clubs. From a global perspective, the industry is now represented by more than 102 million members and 92,000 commercial clubs. By 2010, the International Health, Racquet and Sportsclub Association is predicting 120 million members and more than 100,000 commercial clubs. Looking at these numbers, you might conclude that the industry is well-positioned for growth over the next 10 to 20 years. However, that depends on whether investors and operators can enter new markets and adapt their models fast enough to appeal to a rapidly changing demographic landscape. Here are the first five of what we believe are nine significant global trends that will shape the fitness club industry, and some questions that could help leverage those trends for the growth of the industry.

1. The age wave

Two significant demographic trends over the next 20 years involve aging. Baby boomers and "echo boomers" are reaching older ages. How can fitness experiences be created that appeal, on one hand, to 78 million individuals who want to look younger, live healthier and be what they once were, and, at the same time, appeal to 77 million young people who thrive on multitasking, virtual communication and constant stimulation? Think about and plan to address these issues, because these groups are as different as night and day.
Possibly for the first time in the history of the U.S., younger people will not live as long as their parents.

2. The state of health

Possibly for the first time in the history of the U.S., younger people will not live as long as their parents. Obesity is pandemic. Diseases such as diabetes, cardiovascular disease and others affect the health of millions of people in the U.S. And, according to a recent publication, the healthcare system in the United States is so severely broken that close to 75,000 people die each year simply because the system fails. This bleak picture presents a great opportunity for the fitness industry, but are you prepared to provide a more professional product that can help deal with this crisis?

3. The wealth gap

According to several recently published articles, approximately 1 percent of the world's population possesses 40 percent of the wealth, and approximately 50 percent of the world's population holds less than 1 percent of the wealth. These statistics bode well for facility operators who target the richest segment of society. On the other hand, this select market is small. How can the industry create profitable niche models that serve both the rich and the poor? Consider that just more than 50 percent of members currently have household incomes of more than $75,000, yet the average dues in the industry are only about $50 a month - less than 1 percent of the average member's income. At best, this is a confounding set of circumstances.

4. The equity markets

Just 15 years ago, the industry had a hard time attracting banks. Now, many fitness centers and potential investors have a number of equity options. While this infusion of capital has helped the industry grow, it has also put an incredible strain on the ability of fitness centers to find management talent to lead its development. As financial markets take over for entrepreneurs, the demand grows for professionals who are fluent in fitness and finance. Are fitness facilities prepared to look and act more like big business? If not, how can they deal with the financial challenges inherent in the marketplace?

5. Technology overload

Technology encourages people to perform less activity in the real world and more in the virtual world. Several key questions arise: How does the industry leverage the virtual world to add value to its business model? How can the industry take an anti-activity trend and turn it into an activity magnet? How does the industry get its future audience to see value in its product? The club industry must step out of its old patterns and seek out new approaches that will allow it to leverage these trends for long-term growth. Next month, we will address the final four global cultural trends shaping the industry's future.
Buyer's Guide
Information on more than 3,000 companies, sorted by category. Listings are updated daily.
Learn More
Buyer's Guide
AB Show 2022 in Orlando
AB Show is a solution-focused event for athletics, fitness, recreation and military professionals.
Learn More
AB Show