Two Events That Changed
In 1996, and then again, in 1998, two events occurred that forever changed the way the fitness industry perceived itself and its potential. First, on July 11, 1996, the Surgeon General of the United States released the first-ever report on the health benefits of physical activity and the health dangers of sedentary living. In sum, the report stated that people who lead sedentary lifestyles are at great and increasing risk for a broad spectrum of disabling and potentially fatal diseases. It exhaustively presented the myriad ways in which physical activity prevents disease and promotes health, and then recommended that every American get at least one half-hour of moderately vigorous cardiovascular exercise every day, and at least two strength-building workouts each week. Second, in early 1998, IHRSA's annual report on the number of health club members in the United States indicated that U.S. health club membership was rapidly approaching the 25 million member mark.
Between January 1, 1997 and January 1, 1998, U.S. health club membership rose from 20.8 million members to 22.5 million members
(Figure 1.1). In each of the years 1997 and 1998, total American health club membership had grown by more than 1.7 million members. Buoyed by the publication of the Surgeon General's Report and the likelihood of scaling the 25 million member mark before the next millennium, industry leaders began to assess the industry's future growth potential. It was at this time, and in this context, that the goal of doubling the size of the industry by the year 2010 arose and the objective-50 million members by the year 2010-was born.
Shortly thereafter, IHRSA's Board of Directors approved the development of a plan to reach 50 million by 2010. Soon after that, the Fitness Products Council (FPC) of the Sporting Goods Manufacturers Association (SGMA) agreed to partner the development of the plan with IHRSA. It is important to note that the creation of this partnership constituted two industry "firsts." To begin with, it marked the first time in the history of the industry that both fitness equipment suppliers and fitness club operators had joined together to achieve a common goal. Second, it marked the first time that the industry as a whole-both suppliers and facility operators-set its sights on achieving a specific membership objective-50 Million by 2010.
Consequently, the report that follows is the result of collaboration between IHRSA and the Fitness Products Council of SGMA. Its purposes are fourfold:
· first, to set forth the common objective of the two organizations;
· second, to delineate ten major growth opportunities which are currently accessible to the fitness/ wellness industry;
· third, to prioritize these opportunities in terms of the industry's assessment of their importance and its current capability to grasp them; and
· fourth, to identify specific industry initiatives aimed at providing the industry with the tools and resources it needs to generate health club membership growth.
CLARIFYING THE OBJECTIVE
IHRSA, SGMA AND THE INDUSTRY
The health club industry is larger than IHRSA and larger than the Fitness Products Council of SGMA. Both of these organizations are only parts of a fast-growing, multi-faceted industry. Nonetheless, these two groups have come together to post and pursue an industry objective. The number 50 million, around which this campaign is launched, refers not only to commercial club membership, but to membership in all types of fitness venues. These include membership in corporate fitness centers, YMCAs, Jewish Community Centers (JCC), college and university facilities, and public recreation centers, etc.
The commitment to such inclusiveness, itself, raises two immediate questions. First: Why are IHRSA and the SGMA interested in industry growth? Wouldn't it be better, and more appropriate for trade associations, to focus only on the growth of their own specific industry segments? For example, shouldn't IHRSA focus only on the growth in commercial club membership, revenues, and profitability and forget about overall industry growth? And shouldn't SGMA focus solely on growth in institutional fitness and home fitness equipment sales? Why bother about the growth of the industry as a whole? Why bother about health clubs?
The answer to both of these questions is a matter of belief. IHRSA and SGMA believe that industry growth is a fundamental and essential condition underlying the long-term growth opportunities of the specific industry segments they serve. IHRSA and SGMA believe that unless the industry as a whole is growing, it is unlikely that their specific segments of the industry will continue to grow for long. IHRSA and SGMA also believe that if the industry as a whole is growing, the specific segments that they serve will get more than their full and fair shares of this growth. To give but one example:
Between 1987 and 1997, U.S. health club membership grew from 13.7 million members to 20.8 million members In short, during that 1987-1997 period not only did the industry grow, but the tax-paying segment of that industry prospered more substantially than any other segment. The second question raised by this industry initiative is this: Who gave IHRSA or SGMA the right, or the authority, to articulate and spearhead an industry-wide initiative? Wouldn't it have been far better if the development of this initiative had involved all industry segments, and not just IHRSA and the SGMA? Clearly, this might have been preferable. On the other hand, at this stage of the industry's development, the process would have been much more cumbersome, and the result might have been much less focused. To wit: IHRSA and SGMA are both trade associations. Their focus has always been on the business of fitness. Their goals have always been to grow this business.
For this reason, IHRSA and SGMA can easily and naturally embark on a growth initiative that would prove far more circuitous, complex, and time-consuming to other organizations. The IHRSA and SGMA goal was to get the ball rolling, to set forth an initial industry objective, and then to start aggressively pursuing it. Our respective members-IHRSA member clubs and SGMA's Fitness Products Council member companies-are riveted on growth. We are confident in their ability to lead this movement. The growth opportunities delineated in this preliminary report, as well as specific initiatives designed to leverage them to the fullest, are stated here openly and without reservation. We believe that in reading this report it will become clear that everybody stands to gain when all existing segments of the industry pursue the growth opportunities that are accessible to them.
Indeed, today's corporate fitness center member may well be the commercial club member of tomorrow, and vice versa. And those who frequent recreation centers today may well become the corporate fitness center devotee of tomorrow. In some respects, every part of the industry wins whenever anyone joins any type of club. Still, in this business, as in every service business, execution is everything. Going forward, IHRSA and SGMA will focus their energies on empowering their own respective member organizations to take the fullest possible advantage of the opportunities and initiatives outlined in this report. Remember, between 1987 and 1997, the tax-paying facility share of the total market increased from 60% to 66%. Over the next 10 years, between 2000 and 2010, IHRSA's objective is to increase the market share of its segment from 66% to 80%. IHRSA's goal going forward is not only to grow the industry. Most assuredly, it is to increase the total market share of its own members.
