USA Fitness Industry Market Trends

 

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Market Size and overview

Health and fitness clubs provide their customers with the infrastructure for their workouts and physical activity in exchange for a membership fee. The global fitness and health club industry generates more than 80 billion U.S. dollars in revenue per year. The North American market had an estimated size of more than 32 billion U.S. dollars in 2017, of which around 90 percent, around 30 billion U.S. dollars, was attributable to the United States. The United States is the single biggest market worldwide not only in terms of revenue but in regards to the number of members in health & fitness clubs as well.

The global market is fragmented with no particular chain taking a large share of the worldwide market. Market leaders are rather limited to more local (countries, geographical region) ranks. Amongst the health & fitness club companies with revenues in excess of one billion U.S. dollars in 2017 are Planet Fitness, Life Time Fitness, Anytime Fitness and ClubCorp. In 2017, a total of more than 200 thousand fitness & health clubs were in operation worldwide, of which about 38.5 thousand are located in the United States. These clubs in the U.S. had about 55 million members. Globally more than 170 million people were members of a health/fitness club.

About 25 percent of people in the United States, who work out at least once a month, say that exercise, workout or sports in general is part of their daily routine according to a Statista survey. Almost two thirds of people who regularly exercise are, or have been at some point, a member health club or gym. The main reasons for exercising are - to stay healthy, weight reduction, optimizing strength and/or endurance and to get a better looking body and improving overall appearance.

Revenue of the fitness, health and gym club industry in the United States from 2007 to 2021 (in billion U.S. dollars)

The statistic shows the revenue of the U.S. gym, health and fitness club industry from 2007 to 2021. In 2018, the gym, health and fitness club industry in the United States generated 28.8 billion U.S. dollars in revenue.

Industry Products and Services

  • Membership fees
  • Personal training services
  • Guest admission
  • Meals and beverages
  • Merchandise sales
  • Spa services

SWOT Analysis

Strengths

  • Results-orientated approach to attracting and maintaining customers.
  • A well-researched, detailed health wellness program that is long-term in focus.
  • Intensively trained staff.

Weaknesses

  • High costs associated with customized, personal service.
  • The inability to work on a high volume business model.
  • The costs of attracting a large corporate client.

Opportunities

  • Participation within a growing market.
  • The large increase in clients that follows with the acceptance of CF's program by a single company.
  • The ability to leverage future quantitative analysis that supports the contention that long-term wellness programs have a significant, positive impact on a company's bottom line.
  • As per capita disposable income rises, more individuals can purchase gym, health and fitness club memberships.

Threats

  • Lack of immunity to an economic downturn.
  • Potential competition from larger, well established competitors.
  • A change in society where the individual begins to take far more responsibility for his/her health maintenance.
  • In 2018, IBISWorld estimates that time spent on leisure and sports will decrease, representing a potential threat to the industry.

Source: 
International Health, Racquet and Sport Club Association (IHRSA) GDP growth per World Bank, projected Industry growth by IBISWorld.

Source:
International Health, Racquet and Sport Club Association (IHRSA): Age 15+ plus per World Bank.

Source: 
International Health, Racquet and Sport Club Association (IHRSA): GNI per capital per World Bank.

Source: 
https://www.ihrsa.org/

Market Opportunities

Nielsen’s 2018 survey found that 81% of Gen Y individuals exercise or would like to vs. only 61% of Boomers. For this reason this segment have caught the attention of boutique studios, wearable developers, and equipment manufacturers. 

According to IBIS World’s Gym, Health & Fitness Clubs market research report, the demand for gyms and health and fitness clubs will continue to rise over the next five years, as the general public becomes more health-conscious and the aging population places a greater emphasis on staying fit. A new segment has been identified in the fitness apparel market i.e. plus size shoppers and now when it comes to clothing the companies are promoting these by selling it in their outlets. There has been 19.2% increase in plus size shoppers and these apparel mostly have body positivity and inclusivity which have been considered as prime factors to drive sales. Other fitness apparel sellers are adopting the same trend as demand continues to take a toll. In stock e-commerce data shows that plus size active wear new-ins have grown by up to 64.5%.

Many health-conscious individuals have incorporated fitness into their daily regimen. Demographic trends have helped shape the industry’s landscape over the past five years. Profit will remain high as many gyms offer more high-margin services.

Market drivers

As the latest trend, consumers are once again joining clubs, it has a very positive effect on the rest of the industry and we are looking forward to seeing the new programs, products and services that come out of this growth. The obesity rate among females is 35.5% and 32.2% for male. These factors contributes to the increased sales of home user fitness equipment within the U.S. 

Home users are expected to retain 50% of the market share on the basis of revenue. Health clubs are expected to be second largest user segment and grow at CAGR of 2.1%. 

Fitness operators that have a large number of establishments and provide a wide range of services are able to attract and retain new and existing members, as well as reduce costs per member.

Market restraint

While the total number of health clubs continue to increase, dynamic changes at existing clubs have been under way over the past couple years, with more and more facilities devoting more and more time and space to functional fitness and to niche classes designed to fit specific needs of specific groups. Problem in the fitness industry is that people are not sufficiently motivated to work out, so overall enrollment in fitness programs remains low, and obesity levels remain high. Gyms and health clubs have not figured out yet how to make working out fun.

Some backdrops of the fitness industry are that

  • Exercisers are too obsessed with achieving six-pack abs
  • Manufacturers spend too much time and energy trying to reinvent old equipment
  • Too many personal trainers let clients dictate the course of their program.
  • The fitness industry is dead because fitness today is about achieving a certain look or weight instead of about performance.

Industry challenge

Overall, barriers to entry are relatively low for the Gym, Health and Fitness Clubs industry. Leasing, rather than owning industry facilities, provides a low-cost option for potential industry entrants, thus keeping barriers to entry relatively low which increases the competition automatically. Additionally, average wages in the industry tend to be low, as staff are typically unskilled and provide training services on a part-time basis. Equipment costs are relatively low as well, and have long life spans. Many start-up gyms will either use secondhand exercise equipment to reduce costs or will rent their equipment. Barriers to entry in urban markets include restrictive zoning laws, lengthy permit processes and a shortage of appropriate real estate. The biggest challenge for fitness industry in USA is that more than 50% of all the people who step into a fitness and health club actually don’t know what they like and thus they are not motivated. These members are doing the same exercise over and over again, their expectations need a reality check, they are not changing their lifestyle and nutrition habits, or what they are doing actually isn’t fun. So no wonder our industry retention numbers have been so bad for decades. The lack of fun factor is due to less transparency in social media, lack of fun accessories and equipment, lack of technology usage, less human interaction and more focus on technical aspect of exercise. Fitness industry is also regarded as a highly seasonal business with January, February and March as the biggest months for increasing number of new memberships and rest of the year remaining with stagnant growth as people choose to work indoors in winter specially in winter prone areas.

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Wellness/fitness industry in the US

The Gym, Health and Fitness industry has benefited from recent marketing campaigns aimed at fighting obesity and consumer trends toward improved health. 

According to International Health, Racquet and Sportsclub Association (IHRSA) data, the number of health club memberships in the United States grew at an annualized rate of 2.9% between 2013 and 2018, totaling 60.9 million members. Some gym, health and fitness clubs have appealed to consumers on the basis of convenience by offering low-cost memberships with full operational hours. Comparatively, niche studios have appealed to consumers by offering classes within a community setting. Further driving demand for industry services, many health-conscious individuals have incorporated fitness into their daily regimens. Additionally, the number of adults aged 20 to 64, the largest gym-going demographic, has grown, spurring demand for gym memberships during the period. 

As a result, over the five years to 2018, industry revenue has grown. This industry operates fitness and recreational sports facilities that feature exercise and other active physical fitness conditioning or recreational sports activities, such as swimming, skating or racquet sports. 

Operators are also involved in facilities management and fitness instruction.

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Wellness/fitness Industry Trend

Over the past five years, the Gym, Health & Fitness Clubs in the US industry has grown by 2.6% to reach revenue of $33bn in 2018. In the same timeframe, the number of businesses has grown by 3.5% and the number of employees has grown by 3.9%. Revenue in the Fitness segment amounts to US$15,695m in 2019 and is expected to show an annual growth rate (CAGR 2019-2023) of 4.7%, resulting in a market volume of US$18,886m by 2023. The market's largest segment is Wearables with a market volume of US$13,615m in 2019.

Survey has revealed that 81% of Millennials exercise or would like to, while only 61% of Boomers do. For this reason Millennials have caught the attention of boutique studios, wearable developers, and equipment manufacturers. Millennials use fitness apps more than other age groups, with women using them twice as much as men. 46% want as much quantifiable data about their health as possible, and 54% are likely to buy a body analyzing device.

The number of people employed in the Gym, Health & Fitness Clubs industry in the U.S increased 2.9% on average over the five years between 2014 and 2019. The average Gym, Health & Fitness Clubs business in the US has 7.2 employees. Research reveals that there are 813,698 people employed in the Gym, Health & Fitness Clubs industry in the US as of 2019. The Gym, Health & Fitness Clubs industry in the US is the 2nd ranked Arts, Entertainment and Recreation industry by employment and the 49th largest in the US.

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Gym, Health & Fitness Clubs in the US Market Size

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Fitness industry market outlook

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Demographics of Millenials in Every State

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