Forecasting ’14

Picture 2We interviewed fitness executives on what they believe will be in store for the industry in 2014. New technology and the member experience were just a couple of hot topics, but one issue affecting our nation and the world took the cake—obesity.

Dave Mortensen

Dave Mortensen, the co-founder of Anytime Fitness, was born and raised near Hastings, Minn. — the same town that currently plays host to Anytime Fitness’ headquarters. As a native of the North Star state, he’s extremely passionate about the health and fitness of Minnesotans, in addition to the nation as a whole. That is why, when asked about his industry outlook for next year, Mortensen name-dropped “FIT Minnesota,” a coalition of Minnesota-based health and fitness center operators. Its mission is to increase the activity levels of Minnesotans.

“We are fighting a larger fight than any of us can tackle by ourselves — obesity,” said Mortensen. “We’re trying to get the whole industry to collaborate.” So far, operators such as Anytime Fitness, Life Time Fitness and Snap Fitness have jumped on board.

“FIT Minnesota” tackles obesity by providing tax incentives for individuals to become, and remain, active. The coalition is advocating for two types of tax incentives, one for employee fitness and another for individual and family fitness.

“If we can provide incentives, people are more apt to stay active,” explained Mortensen. Eventually, he would like “FIT Minnesota” to become a national program. “We want to make this a driving force across our nation,” he continued.

Internally, Mortensen explained that Anytime Fitness would continue focusing on what he believes his clubs do best — providing a one-of-a-kind member experience. “We want to create a new customer service standard for our brand,” he said. “We want to give a surprisingly personal experience to every customer who’s touched by us.”

To accomplish this, the development of tools such as education platforms, video components and blogs will be paramount for both franchisees and members. “We’ve excelled at developing tools to help individuals grow, who are touched by our brands,” said Mortensen. “In 2014, you’ll continue to see our focus on succeeding and growing.”

Greta Wagner.

Greta Wagner.

Greta Wagner

More than a year ago, on October 29, 2012, The Chelsea Piers Sports Complex in New York City experienced unprecedented devastation at the hands of Hurricane Sandy. Equipment, flooring, electronics, drywall and more were destroyed — damage that would have crippled some clubs. That wasn’t the case for Chelsea Piers. What should have taken months to repair, instead took five weeks with the help of hundreds of volunteers, employees, vendors and outside contractors.

Greta Wagner, the general manager of the Sports Center at Chelsea Piers, is amazed at how the company has recovered since the hurricane. “The company pulled together like a family, and it brought out the best in all of us,” she said. “I couldn’t be prouder.”

In fact, Wagner said the Chelsea Piers Sports Complex has bounced back from Sandy better than ever before. As a result, she’s excited for what 2014 will bring the company.

For one, the company is looking at revamping its Group X and small-group programs. “To compete with the never-ending escalation of small, single-purpose studios, we will be adding many small group training programs on our schedule that will be included in our members’ regular dues,” said Wagner. “We strongly believe that if a potential member sees that they can get quality, killer programs or classes in a wide range of sports-specific, high-intensity formats — plus all the luxuries and amenities a large club can offer — they’ll think twice before spending an exorbitant amount per class, multiple times a week, for a single-shot program.”

Additionally, enhancing the Sports Center’s member experience is at the top of the priority list. “We are focused on staying current and using technology to do so,” explained Wagner. “We are looking at ways to use technology in as many areas of club operations as we can — to communicate better with members and provide fun and effective programs. We’re considering bringing MyZone into every area of the club, which will accomplish our goal of connecting with our members and having our members connect with each other — and having a lot of fun doing it.”

Finally, Wagner said the company plans to continue bringing ingenuity to its complex, something Chelsea Piers has become known for. “As any member will tell you, we are always improving what we have and [are] in a constant search for ways to enrich the member experience,” she said. “Reliability and innovation is what you can expect.”

Mark Miller.

Mark Miller.

Mark Miller

Mark Miller, the vice president of Merritt Athletic Clubs in Baltimore, Md., painted an image of the ideal member experience. “Think about your last experience at McDonald’s, compared with your last experience at Chick-fil-A,” he said. “The customer service you received is probably incomparable.”

His point? Miller would like Merritt Athletic Clubs’ members to receive stellar customer service every time they enter Merritt’s doors. This has been, and will continue to be, a main focus for Merritt Athletic Clubs in 2014. “We’re really trying to think outside of the box and think about how we can create a five-star experience for our members,” said Miller.

To accomplish this, staff training, developing the look and feel of Merritt locations and providing members with results, are areas Miller will look to continually improve. “We want members to see us as their third home,” he said. “There’s home, work and then Merritt Athletic Clubs.”

Miller explained that his inspiration can typically come from outside the industry. “We don’t want to be good anymore,” he said. “We want to be great. And to be great, you have to think differently.”

Thinking differently includes delving into the wellness aspect of the fitness industry, which is an area where many clubs may have only scratched the surface. According to Miller, developing Merritt’s mind/body, nutrition and stress management programs and services, are part of that initiative. “We want to help members have a well-rounded, holistic life,” he said. “We’re trying to become that solution for total health.”

Unsurprisingly, fighting obesity is a problem Miller hopes Merritt Athletic Clubs can help provide a solution for as well. This is something he believes health club operators should be working together to solve. “If all of us as leaders can really dig down and expand beyond our current boxes, that’s going to make a difference,” he said. “We view each other as competitors. If we work together to become a solution and resource in our communities, we could become a massive movement in this great country of ours.”

Smaiyra M. Million.

Smaiyra M. Million.

Smaiyra M. Million

Smaiyra M. Million, the CEO of Millennium Partners Sports Club Management (MPSCM), which owns and operates Sports Club/LA and Reebok Sports Club/NY, said her company is continually on the lookout for the next big thing in the health and fitness industry. And, most recently, the merging of health, wellness and technology has grabbed her attention.

“With the growing issue of obesity and other related diseases, fitness will continue to be at the forefront of many governmental, academic and healthcare forums,” said Million, who has been CEO of MPSCM since 2011.

Partnering with a company called InsideTracker is one culmination of MPSCM keeping its eye on the future. A personalized health analytics company, Million explained that InsideTracker’s platform analyzes and tracks key biochemical and physiological markers using algorithms and large scientific databases. According to Million, this determines optimal zones for each user’s markers. “By leveraging the data provided by InsideTracker, our fitness and nutrition experts can deliver science-driven lifestyle and nutrition interventions that empower members to optimize their markers,” said Million. “When optimized, these marker levels have been scientifically proven to increase vitality, improve performance and extend life.”

In addition to partnering with InsideTracker, Million said other brand partnerships are a priority for MPSCM as well. Recently, the company partnered with Tara Stiles to bring “Strala Yoga” to its members. Additionally, a partnership with Malin + Goetz brought its line of personal care products to Sports Club/LA’s and Reebok Sports Club/NY’s locker rooms and retail stores. “We are passionate about our reputation for creating the best-in-class member experience,” said Million. “Therefore we will continue to forge exclusive partnerships with iconic brands and wellness influencers to further enhance our member experience.”

Although MPSCM is a subsidiary of a multi-billion dollar real estate conglomerate, Million explained that the company doesn’t make investments lightly. “Quite the contrary, we operate the business in a very entrepreneurial and fiscally-restrained manner,” she said. “While we are supported greatly by our ownership, we have created a culture of ‘less is more’ and are more likely to bootstrap initiatives rather than pull out all the stops. Everyone is expected to treat the company’s resources as they would their own checkbook. We continue to place a high value on innovation and are always looking for something that would be positively disruptive to our industry — game changing.”

Kevin Kavanaugh.

Kevin Kavanaugh.

Kevin Kavanaugh

Kevin Kavanaugh, the president of David Barton Gym, is unique in the industry for a couple of reasons. For one, Kavanaugh got his start with David Barton Gym at the front desk 14 years ago and worked his way up the ladder. Secondly, Kavanaugh has never worked for another company in the fitness industry. His experience with David Barton Gym is his one and only foray in the fitness industry. This has provided Kavanaugh with a particular outlook for the next 12 months — one that’s focused on nurturing the brand he’s built an entire career around.

That nurturing starts with growth. In September 2013, David Barton Gym announced a new growth strategy that will bring David Barton locations to cities such as Philadelphia and Boston. Kavanaugh hopes to extend David Barton Gym’s “Look Better Naked” philosophy to have more reach across the U.S. “We have some really exciting properties we’re looking at,” he said.

However, Kavanaugh cautioned: “We need to make sure that as we grow, we maintain our customer service. We’re going to be partnering with some different companies to ensure you get our high-end design with some cool, fee-based programming.” Kavanaugh said he believes this is a solution to the increasing competition being seen from niche and boutique studios, such as Barre3 and CrossFit.

Finally, Kavanaugh wants to dispel a myth perpetuated by the “glitz and glamour” of David Barton Gyms. “The biggest misconception about us is [that] you have to get dressed up to go there,” he said. “That’s not us at all — we just want members to work out.”

Joe Cirulli.

Joe Cirulli.

Joe Cirulli

If you were hired today at Gainesville Health and Fitness (GHF) in Gainesville, Fla., one of the first things you’d be handed would be the company’s 71-page Customer Service Manual. The length of this document signifies how important providing stellar customer service is to Joe Cirulli, the club’s CEO and founder.

“The main thing we’re focusing on is the customer experience,” commented Cirulli. As a result, cultivating that customer experience will be something GHF focuses on in the next year and beyond.

This will be accomplished through a couple of different initiatives, starting with improving the aesthetics of GHF centers. Recently, GHF finished a major overall renovation at its largest location — adding 12,000 square feet of space and modernizing amenities.

Cirulli worked at a country club as a teenager, and a country-club-like atmosphere is what he’d like to offer his members. “We want to make sure we completely modernize the look,” he said. “I want to create an experience where you enjoy being here.”

Part of that enjoyment will be bolstered by the development of sub-brands within GHF, another initiative the company will focus on in 2014. Sub-brands GHF has invested in include CrossFit, Spinning® and adventure racing. “As things change in the industry, we need to be able to adapt,” said Cirulli. “Look at what’s happening in the marketplace and what the members are attracted to. That’s a big driving force.”

The adoption of CrossFit is a perfect example of Cirulli’s willingness to change and grow as a company. “As a company, we never stop working on becoming better,” said Cirulli. “That’s from me, to the physical plant, to what we do in the community. We’re always trying to be better.”

Jeff Skeen.

Jeff Skeen.

Jeff Skeen

According to Jeff Skeen, the president and CEO of Fitness Connection, his company has been dedicated to giving its customers the best value in the fitness industry. However, it was enhanced in October 2013 when Fitness Connection received financial backing from LNK Partners, a leading consumer private equity firm with aggregate funds of more than $800 million. With LNK Partners’ investment and a spurred focus on growth, Skeen is confident that 2014 will bring great things for his company.

“[LNK Partners] has $800 million under management, and invests up to $150 million per company, which means our organization will have the resources to accelerate our growth,” said Skeen. “We are also excited by our partnership with LNK because they not only have experience in the fitness industry through their past investment in Life Time Fitness, but they have a tremendous amount of experience in building brands such as Staples, Calvin Klein, Tommy Hilfiger, Van Heusen, IZOD, Quaker Oats, Pepsi, Gatorade and Levi Strauss.”

In addition to growth, Fitness Connection will focus on expanding small group training — which Skeen believes will become an increasingly popular trend — and investing in technological platforms positioned around the management of customer relationships, personal training, nutrition and wellness. “We are upgrading our technology platforms to better capture and use data more effectively to serve our members,” said Skeen.

By Rachel Zabonick

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