IHRSA Q1 Index Shows Strong 2008 Performance for Health Club Industry Despite Uncertain Economic Times - SNEWS

IHRSA Q1 Index Shows Strong 2008 Performance for Health Club Industry Despite Uncertain Economic Times

A recently conducted survey of 18 leading U.S. health and sports club companies has found that commercial health club financial performance improved for the first quarter ending March 31, 2008, relative to the same period last year.
Author:
Publish date:

BOSTON-July 30, 2008- A recently conducted survey of 18 leading U.S. health and sports club companies has found that commercial health club financial performance improved for the first quarter ending March 31, 2008, relative to the same period last year. These 18 small to mid-size clubs represent a total of 193 facilities, or an average of 11 clubs per company. The survey was conducted for the International Health, Racquet & Sportsclub Association (IHRSA) by Industry Insights, Inc.

The IHRSA index has found that a company grew their total revenue an average of 15.0% to $17.5 million for the first quarter. Similar growth was reported during quarter end December 31, 2007. “We are very pleased that this sample of club operators has been able to post increase revenue numbers for two consecutive quarters,” said Katie Rollauer, IHRSA's Senior Manager of Research.

The participating companies reported increasing non-dues revenues by 17.5% to $5.5 million for the first quarter. In addition, companies also reported improved same-store revenue for clubs that have been in operation for at least two years, by an average of 2.9% to $6.5 million.

“Positive same-store growth bodes well for the industry, indicating that even mature locations are still growing,” said Rollauer. “Additionally, we are pleased to see club companies improve their non-dues revenues by double- digit growth during the first quarter. Clubs typically show growth during the first quarter as Americans begin their New Year's resolutions and make a commitment to get fit.”

Participating companies reported an average increase of 9.7% in total membership accounts over the same period last year. As a percentage of total revenue, EBITDAR was 33.0% of total revenues for the first quarter of 2008. “Not only are clubs able to put 33 cents of every dollar to the bottom line, but clubs continue to have success in collecting more non-dues revenues, increasing membership and doing an excellent job managing expenses during these uncertain economic times,” said Rollauer.

“While it is apparent that businesses are operating in a challenging economy, if health clubs are able to report another increase in total revenues and non-dues revenues in Q2, it will be a strong testament to the resilience of our industry,” reports Rollauer.


Note: Data reflects information for 18 leading U.S. health and sport club companies representing 193 facilities. Same-store revenue data reflects clubs that have been in operation for at least two years. Participating companies reported owning/managing an average of 11 facilities (same-store count average of 8 facilities). Data is intended to provide a snapshot of U.S. health club industry performance, however the results are based on a small sample of companies and care should be taken when making comparisons of these findings to the overall industry-at-large.

EBITDAR: Earnings before interest, taxes, depreciation, amortization and rent.

The "4% Change" reflects the percentage change from one quarter to the next in the group's overall mean/average for each variable, and is essentially weighted by the size of companies responding to the survey. As such, the “% Change” presents an indication of the broader group's performance. The "Co. % Change" reflects the median/midpoint percentage change reported by the 18 individual companies. As such, the “Co. % Change” represents the “typical” company's performance where all the participants are weighted equally, regardless of size.

The International Health, Racquet & Sportsclub Association (IHRSA) is a not-for-profit trade association representing health and fitness facilities, gyms, spas, sports clubs, and suppliers worldwide. The association's membership includes over 9,100 clubs in 72 countries, along with over 730 industry suppliers.

####

Related