An overview of the biggest challenges and opportunities facing gyms currently, including supply chain issues, raising prices and more.
The pandemic has provided one degree of certainty: That everything is uncertain. Predictability is a thing of the past, and the best operators are keeping their noses to the ground in an effort to predict the next crisis, challenge or opportunity.
At least, that’s been a theme of the recent Club Solutions Mastermind Group meetings over the past couple of weeks, with operators sharing common themes surrounding the biggest challenges and opportunities facing gyms currently. Those include:
Supply chain issues.
The COVID-19 pandemic is continuing to impact large swaths of the economy, notably the supply chain, with a host of goods and products becoming harder to come by such as window treatments, plastic bags, aluminum, paper and more. Some clubs are reporting similar issues sourcing equipment and cleaning supplies, for example.
“The bottom line is that supply chains are being severely disrupted — whether for new construction or for making smoothies in our clubs,” said Cory Brightwell, the CEO of Chuze Fitness. “Being overly proactive on orders and ensuring we have two to three vendors for back up has helped us through some of the challenges.”
Growth in family and youth sport activities.
Many clubs are reporting a huge resurgence in their family memberships and youth sport participation, as pent-up families look to become involved once again after months of isolation.
Navigating price increases.
Due to labor shortages, rising payroll costs and lost revenue over the last 18 months, many clubs are revisiting pricing and raising the cost of membership.
This includes Midtown Athletic Clubs, though raising prices isn’t an anomaly. It’s something they do annually, raising their prices between 2% and 3% each year depending on location.
“We have historically done a 2% to 3% increase every year and we are up front at the time of joining,” said Jon Brady, the president of Midtown. “The cost of living goes up each year and so we historically also always give teammates a pay increase annually. It is merit-related but assuming you are not pulling us down — and hopefully our performance management systems would highlight and take care of that — then you would receive something.”
According to Brady, utility costs are also increasing and so are the costs of benefits for teammates, providing more reasons to raise prices yearly.
“The reason to do it is simple: Compound interest is the thing that drives economic growth, and incremental increases consistently applied deliver outsized return over time and if you do not put your prices up, you are eating your margin, year after year,” said Brady.
Enforcing mask mandates.
Clubs in states with mask mandates are reporting this continues to be a major source of frustration, with staff struggling to enforce mask policies. In fact, mask policies appear to be more contentious than clubs requiring proof of vaccination in certain markets.
Interested in staying in the loop on the biggest challenges and opportunities facing gyms today? Consider joining a Club Solutions Mastermind Group. Email Bob Surface at bob@peakemedia.com for additional details while spots last.
