Non Dues Revenue Trends

by Sean Kirby, National Sales Director
ASF International

There’s been a lot of discussion about the state of the fitness industry and how it’s recovering from the economic issues of 2008 & 2009.  Posed with a question, “Where do you see the industry going in the next 5 years,” I began looking at numbers over the past three years.  The reason I didn’t look further back was due to the state of the US economy and how drastically it has changed how we operate and conduct business. 

I wanted to explore three primary areas: the change in members per club, the change in membership dues and the change in additional non-dues revenue.  As I began my research, I looked at ASF’s database of over 3,000 locations and I decided to only look at US fitness facilities, thus eliminating tanning only locations, martial arts studios, and international business. 

Here’s what I found.

Over the past three years, the average membership payment has increased 5%.  This is nothing to brag about.  In fact, some would say that this is barely a cost of living increase, or the cost of doing business.  Others would say it’s the influence of the “low price, high volume” business model.  While this may have some effect on the modest increase, I’m not sure that it is the sole reason.  I also discovered that the average number of dues paying members, per club, has decreased by 10%.  One might conclude from this decrease that revenue per club would be lower. 

So, how are clubs staying in business and in some cases exceeding their revenue goals of the past?  PT and other additional, non-dues revenue is the answer.  To further understand how significant this number is, I researched some articles on IHRSA’s site.  In doing so, I found IHRSA’s 2011 Second Quarter Index, which reported the results of 15 leading US club companies for April through June.  The survey, which represented a total of 503 facilities, showed that non-dues revenue rose 11.2%. 

The most compelling number in my research through ASF’s database was that non-dues revenue has increased 34% over the past three years!  That growth is a tremendous reflection of the change in club operations and revenue generating centers within the new business model. 

Two other IHRSA articles stated that 10% – 15% of a club’s total revenue should be coming from non-dues revenue.   My assumption is that these authors were assuming all clubs were charging some type of non-dues revenue, but the fact is that not all clubs are. 

I looked at some top performing clubs using ASF, with strong PT operations and found that 25% to 36% of their total revenue came from non-dues revenue.  Needless to say, this percentage is huge and the trend seems to be continuing to grow in this direction.

So, where do you fall?  Do you have a strong PT /non-dues revenue program in place?  Are you tracking these non-dues revenues?  Are you comparing them to your membership revenue?  Are you trending in the right direction?  You should be able to pull these numbers easily from your software.  Measure your revenue breakdown.  Track the success of your non-dues revenue.  Make decisions to drive the non-dues revenue in your business upward. 

Vision
The GGFA is heard and respected as the unified voice of all franchisees. We are involved
in all decisions that affect our brand and the franchisees. It is our goal to secure Gold s
Gym as the most profitable franchising opportunity in the fitness industry and the
number one fitness brand in the world.

Mission
We serve as advocates for all franchisees to help them maximize the profitability and

stability of their businesses.

Advertisements

About GGFA

The Gold's Gym Franchisee Association is the independent voice of the Gold's Gym franchisees.
This entry was posted in Best Practices, Fitness & Personal Training. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s