Industry experts share their predictions for next year.
For Joe Bartels, the CEO of Ultimate Family Fitness and Prestige Fitness, growth is a main focus for 2015. “We have a five-year strategy,” he said. “We’d like to open up at least one club per year in our market.”
However, in light of an improving economy, Bartels explained that real estate deals are becoming harder to negotiate. “As always, a better economy makes for tougher landlords,” he said. “So the deals are getting harder to get, but I see for us that the future is solid.”
Another area on Bartels’ mind for the upcoming year is member account security. “We personally took a huge hit on our EFT transfers for all of the people’s credit card information that got hacked,” he said. “It’s something that comes across my mind pretty much monthly: what are we doing and how are we preparing to be proactive for another strike?”
In addition, Bartels speculated that niche studio concepts would continue to grow in popularity, although he’s unsure of their long-term success. “I don’t know how viable they’re going to be,” he said. “There’s always going to be that part of the customer base that will want those small, private, close-knit clubs — I just don’t know if it will be mainstream with everybody.”
Ultimately, Bartels believes clubs like his are better positioned to succeed, as they have the ability to offer niche fitness concepts in addition to full-fledged amenities. “We’re going to offer a discounted [class] over [niche] facilities, and we have 10 times the facility to offer,” he said.
It’s all about innovation for Eric Casaburi, the founder of Retro Fitness. His franchise, which now consists of 117 locations across 14 states, focuses on optimizing its clubs to provide the best possible value for members. “We are trying new things and I think that is what separates us from a lot of people in the industry,” said Casaburi.
In October 2014, Retro Fitness launched its new app, which allows members to track workouts, compete with other members, set goals and even link wearables. “It’s engaging in the sense that it allows you now to get involved with rewards points challenges, so if you do a certain workout you get points, when you show up you get points, when you join one of the challenges you get points, and that gets you gifts from us,” said Casaburi.
Innovation is also on the horizon for 2015. Fierce Brands, which Casaburi is also the CEO and founder of, will be launching Fierce Nutritionals, LLC, a nutrition company that will offer a customized line of products for gym members and exercisers. One of the products will be “his and her” multivitamin packets.
“We are able to make a high-quality vitamin and pass it along to the consumer,” said Casaburi. “We thought, what does our member do and want? They get sore, they get inflammation — especially someone who has never worked out before. We address each one of those issues in our multivitamin packet.”
Constantly updating clubs to target members’ needs has led to increased profits. “2014 was our biggest revenue year we have ever seen and the fact that 2015 looks even better is really exciting,” said Casaburi. “We call it the Retro Bubble and inside the Retro Bubble everyone is drinking the Kool-aid and having a really good time.”
In 2014, niche fitness concepts such as CrossFit and SoulCycle saw substantial growth, ultimately creating more competition for health clubs. Robert Brewster, the president of The Alaska Club, believes this trend will continue throughout 2015. “Although I don’t predict that it’s going to continue to increase at the same pace that it has, I don’t think [niche fitness concepts] have been fully worked into the market yet,” he said.
That is why Brewster believes that in order for health clubs to continue to be successful, they need to do a better job of defining their brand identities. “If you have a generic position in the market, you’re going to have a hard time attracting customers, and that will get worse as we go along,” he said.
Brewster explained The Alaska Club is carving a niche in its market by continually improving its products and services to better serve the customer. “We’ve significantly upgraded the quality of our facilities and bolstered the value proposition that we present to the customer and the potential member,” he said. “We’ve had the capital investment necessary to really differentiate our club from the other players in the market.”
With that has come an increased push to sell ancillary services such as personal training and massage, in addition to membership dues. “We’ve been spending a significant amount of time looking at how we can leverage some of the amenities that we already offer within the clubs and change the pricing structure so that we can offer bundle services — and that has been a positive,” said Brewster.
Throughout the past 31 years, Patricia Laus has transformed The Atlantic Club into one of the most successful clubs in the U.S., and she shows no signs of slowing down.
“While 2014 was a very busy, productive and successful year, I expect 2015 to be a breakthrough year in all areas of our Atlantic Club businesses,” said Laus. “The outlook for both The Atlantic Clubs — Manasquan and Red Bank — in 2015 is positive and aggressive. Having completed major capital improvements in both locations, our membership is happy and growing over budgeted projections.”
Membership growth and retention are dependent on member satisfaction. Laus captures member feedback by using a daily Medallia survey program. “The continued use of this valuable tool will help us strengthen our relationships with our current members, and increase member referrals,” said Laus.
The Atlantic Club recently developed several programs that incorporate the MYZONE exercise tracking system, which monitors heart rate, calories burned and effort of each workout. This information can then be accessed online or through the MYZONE Lite App. “MYZONE, Medallia and complementary fitness programs for members continue to strengthen our relationships — member to member and staff to member. They also increase club usage and prevent attrition,” said Laus.
According to Laus, another year of growth is possible due to the extraordinary executive team, managers and staff who are all dedicated to fulfilling the club’s motto, “Expanding wellness, extending lives through health, education, recreation and relationships.”
Corrine Perritano may be new to Total Woman Gym & Day Spa, but she certainly is not a newcomer to the women’s health industry. Prior to taking over as the CEO of Total Woman, Perritano’s 22-year career has included working with Jenny Craig and Curves.
Her passion for empowering women to live happy and healthy lives makes Total Woman the perfect fit for Perritano. “One of the things that really interested me about Total Woman was the fact that it is focused on helping women and meeting the needs of busy women, to which I totally understand since I am a working mom. I find that very appealing,” she said.
Perritano’s goal for 2015 is to get back to the basics of the Total Woman mission, which is to encourage women to live their best possible lives. “We are really focused on the personalized service that we can provide to our members,” said Perritano. “[We’re] really emphasizing member satisfaction. What makes Total Woman unique is how we tailor everything to a woman’s needs.”
According to Perritano, the future of Total Woman — and the industry as a whole — is a bright one. As the economy continues to improve so will the fitness industry. “I expect to see more women willing to start to invest in their personal health and wellness,” said Perritano. “They are feeling like it is okay. They are not feeling as restrained to invest in themselves a little bit, without feeling guilty.”
Technology makes its mark on multiple industries each and every year, and according to Travis Shannon, the vice president of information for Leisure Sports, Inc., it will have a major influence on the health club industry in 2015. “We’re seeing an explosion of wearables out there and technology that’s reaching an audience that quite frankly, the fitness industry has struggled to reach,” he said.
Shannon believes wearables such as Fitbits present opportunities for the fitness industry. Shannon explained Leisure Sports, Inc., for example, is in the midst of testing out MYZONE to assist with member integration.
In addition, “We have had trainers and coaches within the company that have worked with individuals with different wearables, but we haven’t had a large push to structure that from a corporate level. That’s where our conversation is right now — how do we start to leverage this [and] what things do we want to look at doing for our membership base?”
Shannon also predicted technology such as Apple Pay would have a future influence. “I think Apple Pay will be the final nudge needed to move to greater adoption of payment with a phone,” he said. “This type of technology represents one of the best efforts to date to reduce credit card security risk. Over the next couple years I would expect mounting pressure on POS systems in the fitness industry to implement use of pay by phone, both for real-time transactions and potentially for monthly dues.”
Take a look at UFC Gym’s “News and Press” webpage and you’ll notice a slew of announcements concerning club openings across the U.S., in states from Hawaii to New York. According to Adam Sedlack, the president of UFC Gym, 2014 was a great year for the MMA-inspired gym, which has grown to 100 locations since its founding in 2009.
“In 2014, we put together what we think is our team to launch this company to great things, and we’re expecting to grow our organization by at least double,” said Sedlack. “I think you’re going to see us have growth domestically and internationally.”
For the industry as a whole, Sedlack believes there will be new opportunities clubs can take advantage of. One opportunity is corporate wellness, thanks in part to the Affordable Care Act.
“I think companies — those that aren’t fitness related — are going to be more sensitive to finding alternatives for their employees to be more proactive on their health so they don’t have to go to the doctor as much and they don’t have to deal with huge deductibles,” said Sedlack. “I think it’s going to serve corporations well to make sure that their employees are involved in some sort of fitness or training program.”
Sedlack believes UFC Gym could offer those solutions. “I think that organizations are going to be able to identify with UFC Gym because of the communities that are built in every one of our facilities, whether it’s franchise or corporate,” he said.
Rodney Steven II
For Rodney Steven II, the owner of Genesis Health Clubs, 2014 might seem hard to top. With the acquisition of three Maximus Fitness & Wellness Clubs and two Ozark Fitness Centers, the company’s club count has now increased to 18 locations throughout Kansas and Missouri.
“Genesis had a great year,” said Steven II. “We made some excellent acquisitions in competitive markets, increasing our brand along with increasing some store revenues in existing markets.”
Steven II hopes 2015 will bring more of the same. “We’ve got construction projects currently underway at a few of the clubs and we are hoping to wrap them up in the first quarter so that we can focus on bringing our brand into the newly acquired markets following that,” said Steven II. “We are also looking to expand into a few new markets in early 2015 as well.”
With 40,000 patrons coming through the doors daily, Genesis Health Clubs are dedicated to providing the ultimate fitness and exercise experience. Steven II said group fitness programming will be a key focus in enhancing member experience for 2015. “Members want to be engaged and this is a way for them to make new friends in a group setting, have fun and engage in a program at the same time.”
Also a priority for Steven II: staffing. “I’m all about investing in my staff moving forward,” he said. “It’s all about people, people, people.”
By Emily Harbourne & Rachel Zabonick