Club Performance Improves
BOSTON- April 24, 2008- The International Health, Racquet & Sportsclub Association (IHRSA) announced the results of a recently conducted survey of 16 leading U.S. health and sports club companies. The survey, conducted by Industry Insights, found that commercial health club financial performance improved for the quarter ending December 31, 2007, relative to the same period last year. These 16 mid-size clubs represent a total 186 facilities or an average of 11 clubs per company.
The IHRSA index found companies collectively grew their total revenue an average of 15.6% to $17.9 million in revenue for the fourth quarter. The participating companies also reported improved same-store revenue for clubs that have been in operation for at least two years, by an average of 5.4% to $7.0 million.
“For the year as a whole, 2007 reflected a period of steady growth for the leading mid-sized club companies represented in the IHRSA Index,” said Katie Rollauer, IHRSA’s senior manager of research. “The 4th quarter results are impressive in light of the uncertain economic conditions clubs faced at the end of 2007,” said Rollauer.
Looking at the per club performance of the companies reveals $1.56 million in total revenues, a 5.1% growth over the previous year’s data. Clubs were able to hold gross margins at 29%, similar to previous quarters. However, due to consumers’ limited leisure time during the holiday seasons, clubs were only able to maintain, if not slightly increase, non-dues revenues by an average of 0.7% to $0.51 million.
A slight increase in total membership accounts ends a two-quarter no-growth streak when compared to the previous year. On a per club basis, clubs reported an increase in total membership accounts by of 0.6% to 3,248 accounts. Participating clubs also reported improved same-store total membership accounts for the fourth quarter by an average of 1.6% to 3,272 accounts.
The IHRSA index found that on a per club basis the average earnings before interest, taxes, depreciation, amortization and rent (EBITDAR) improved by 6.5% to $0.46 million. As a percentage of total revenue, EBITDAR was 29% of revenue for the fourth quarter of 2007.
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