Skip to content

Health & Fitness Clubs

We have years of experience in this industry for the valuation of the business, equipment and real estate. Let us help you with our valuation consultation in all areas of the valuation of health and fitness businesses. Below is a brief synopsis of the industry.

Description of Business

Establishments that house exercise equipment, swimming pools, spas, saunas and other services for members.

General Industry Information

According to the International Health, Racquet & Sportsclub Association, the number of health clubs in the United States grew by 5.1 percent during 2001, reaching 17,807 facilities at the beginning of 2002. This was an increase from 16,938 in January 2001. Despite the slow economy that characterized the first years of the 2000s, health club expansion continued at a quick pace. In 2001 fitness and health centers in the United States generated combined revenues of more than $12.2 billion.

Health clubs emphasize three aspects of physical fitness: cardiovascular conditioning, strength, and flexibility. Some even add nonprofessional mental health services like stress reduction and counseling programs. Full-service health clubs featured aerobic conditioning equipment, resistance equipment, dance and exercise classes, swimming pools and spa areas, and sometimes even tanning and massage. As the U.S. population ages, the over-50 population is becoming increasing important to the health club industry, and some clubs are responding by adding health maintenance and monitoring programs to their offerings, including checks for bone density, blood sugar, and blood pressure.

In 2002 membership and enrollment (or initiation) fees from the industry’s 33.8 million members constituted the vast majority of club revenues. Although these fees have long been the mainstay of industry income, other revenue sources like children’s programs, personal training, exercise classes, physical therapy, and aquatic programs started contributing a growing proportion of health club revenues.

According to industry statistics, there were an estimated 32,040 physical fitness facilities in 2005. The industry employed 254,345 people, with the average fitness facility employing nine people. Combined, physical fitness facilities reported estimated revenues of nearly $10 billion for 2005.

Red Flags and Risks

IHRSA members claim that the following issues are the five most pressing external challenges to the industry: local economy, price sensitivity of the market, competition from clubs, taxes, and unfair competition from non-profit establishments like YMCAs. The same survey respondents specified member retention, personnel management, advertising and marketing, cost control, and sales management as their top five internal priorities. Although home exercise was farther down the list of external threats, some industry analysts have noted that “the boom in home fitness is cutting into the health club business.”

Have a Question? Contact Us!

We will try to answer you within the next 24 hours