Getting to 100 Million

Looking forward to the next decade, the industry sees at least ten immense opportunities. Taken collectively, these ten opportunities present the industry with unparalleled possibilities with respect to growing membership, growing revenues, and growing profitability in the decade ahead. These ten opportunities are the following:

1. The Age Wave® Opportunity. Beginning in the year 2000, the 78 million Americans who are now aged 37 to 54 and form the largest single population group in the country will enter their 40s, 50s and early 60s. By the year 2010, their age will range from 47-64.

2. The Special Populations Opportunity. The term "special populations" refers to the millions of Americans who experience one or more chronic health conditions, including arthritis, hypertension, chronic lower back pain, high cholesterol, obesity, and depression, that demand an ongoing commit- ment to a program of regular exercise for their successful management.

3. The "Benefits of Exercise" Opportunity. No other industry ever received such authoritative and definitive endorsement for the value of its services as that enjoyed by the fitness industry with the pub- lication of The Surgeon General's Report on Physical Activity and Health. The report, as well as the abundant research that both preceded and followed its publication, presents the industry with a unique opportunity to leverage this information in such consistent and compelling fashion that every man, woman, and child in the country becomes progressively more committed to the values that regu- lar exercise offers them.

4. The "Sales and Service" Opportunity. As a result of many factors, the market for regular exercise is more favorable today than ever before. Therefore, from an intra-industry perspective, the single most important initiative that the industry can undertake is to launch an industry-wide campaign to

strengthen the sales and service and hospitality skills of its front-line personnel. The issue here is not whether a market is accessible. Rather, it is whether the industry has the sales, service, and hospitality skills to leverage it to the fullest.

5. The "Member Integration" Opportunity. At present, the industry sells approximately 11.1 million health club memberships each year. At the same time, however, roughly 9.4 million Americans with- draw from a club that they had previously joined. They quit for a variety of reasons, some of which are controllable and some of which are uncontrollable. With more than 48 million unaffiliated, former health club members living in the U.S. today, the industry is presented with two immense opportunities. The first is to "recapture" those who have recently left; the second is to better integrate those who have recently joined.

6. The Health Care Industry Integration Opportunity. The evidence regarding the protective effect of regular exercise in preventing chronic illnesses is multiplying every week. So, too, is the evidence regard- ing the healing power of exercise in rehabilitating patients with injuries or chronic diseases. This means that the industry's opportunities for integrating its services with mainstream health care providers has never been greater. Partnerships between the health club industry and the health care industry can prove immensely powerful motivators for millions of people, many of who have never exercised regularly, to become involved in medically-based programs of prevention and rehabilitation.

7. The "Easy Access" Opportunity. In a sense, the industry finds itself the prisoner of its own success. Because it has been so consistently successful in selling one-, two- and three-year memberships, often people can find no other way of accessing club facilities. As the industry begins to mature, however, it is discovering a myriad of new short-term "program" and "trial" membership options that can immensely broaden the ways that people can access the health club arena. These opportunities present consumers with an exponentially broader menu of opportunities to access health club facilities in a programmatic way. At the same time, they present providers (health clubs) with a wide array of tools and instruments to penetrate more deeply into their markets.

8. The "All of America" Opportunity. For a variety of reasons, the industry as a whole has never significantly penetrated the immensely important and rapidly growing Asian, African, and Hispanic American market segments. As these populations become larger, more affluent, and more influential, they present an important opportunity. In some markets, notably Florida, New York, California, Texas, Washington, D.C., Atlanta, and Chicago, these markets already represent opportunities of immediate and immense potential.

9. The "Generation X" Opportunity. There are now 46 million Americans who were born between 1964 and 1980 and now range in age between 19 and 35. This young adult population, which today composes 49% of all club members, runs the risk of becoming the "forgotten" generation in the health club arena. In a word, the interests and preferences of this generation deserve far more critical attention and focus than the industry has thus far given to them. Understanding this generation's recreational and fitness interests, as well as their lifestyle values and perspectives, becomes more vitally important to the industry's future with each passing year.

10. The Multi-Generational "Family Club" Opportunity. In the past 10 years, no clubs have enjoyed more definitive success than have multi-purpose athletic clubs that appeal to the needs of the entire family and demonstrate a particular competence in youth programming. Clubs that excel in youth programming, whether it be in swimming, basketball, or racquet sports, have found a market that is rich beyond all expectation. Clubs that excel along the family dimension have opened up for the industry a whole new vista of opportunities that, until recently, were invisible.

Collectively, these ten opportunities provide a road map for industry growth in the decade ahead.