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Club Industry FEBRUARY 2021 FITNESS INDUSTRY TRENDS TO WATCH IN 2021 TABLE OF CONTENTS 2021: A WHOLE NEW BALLGAME FOR THE FITNESS INDUSTRY 3 By Pamela Kufahl, director of content, Club Industry A YEAR IN FLUX: 2021 POSES CHALLENGES FOR THE HEALTH CLUB INDUSTRY 4 By Rick Caro, president, Management Vision SURVIVAL IN 2021 REQUIRES GETTING DONE THE JOB OF MEETING CONSUMERS’ 6 NEW DEMANDS By Emmett Williams, CEO Asia Pacific, Myzone BOOST MEMBER ENGAGEMENT WITH THE NETFLIX EFFECT IN 2021 8 By Jeff Esswein, vice-president of strategic accounts and digital content, Freemotion Fitness FOUR TRENDS THAT WILL AFFECT THE FUTURE OF THE HVLP MARKET IN 2021 10 By Art Curtis, president, Curtis Club Advisors LLC DIGITAL FITNESS TRENDS FOR THE NEXT DECADE 12 By Hannah Campbell, content producer, Les Mills THE TRENDS IN PRICING DIGITAL FITNESS IN 2021 14 By Ashley Podoll, CMO, Intelivideo A EUROPEAN PERSPECTIVE ON WHAT’S COMING IN 2021 AND WHERE TO FOCUS YOUR 16 EFFORTS By Jennifer Halsall-de Wit, board member, Europe Active, and COO, Women in Fitness Association DIGITAL FITNESS ACCELERATED IN 2020 – NOW WHAT? 18 By Sharad Mohan, co-founder and managing director, Trainerize powered by ABC THE FUTURE IS HYBRID: HOW TO LEVEL UP YOUR VIRTUAL OFFERING 20 By Clint Gehde, co-founder and head coach, Exer SALES AND MARKETING TRENDS IN A NEW ERA OF THE FITNESS INDUSTRY 22 By Bill McBride, CEO, Active Wellness, and CEO, BMC3 Consulting RESHAPING AND SUPERCHARGING THE MEMBER EXPERIENCE IN 2021 24 By Andrew Evenson, senior director operations and brand strategy, Fitness OnDemand FORECASTING STRONG MARKET GROWTH IN 2021 FOR THE RIGHT FITNESS CONCEPTS 26 By Rick Mayo, founder and CEO, Alloy Personal Training 28 IN 2021 GYMS MUST CAPTURE MEMBERS WHO LOVE TO ‘PLAY OUTSIDE’ By Chris Frankel, head of performance, BeaverFit USA 30 FOUR SOFTWARE AND BILLING TIPS TO HELP YOU THROUGH 2021 By Carole Oat, national sales manager, Twin Oaks Software 32 30 VIEWS ON HEALTH AND WELLNESS INDUSTRY TRENDS TO WATCH IN 2021 FEBRUARY 2021 EDITOR’S LETTER 2021: A WHOLE NEW 685 Third Ave., 21st Floor New York, NY 10017 BALLGAME FOR THE DIRECTOR OF CONTENT FITNESS INDUSTRY Pamela Kufahl MANAGING DIRECTOR ach year’s trends are always impacted by what happened the Marty McCallen year prior, but 2021’s trajectory has been defined by the un- E INTEGRATED MEDIA usual and challenging circumstances of 2020, which makes 2021 ACCOUNT REP a different ballgame. Many of the trends we are experiencing Crystal Wheeler were already percolating prior to 2020, but the challenges of the year pushed many of them further and faster than they might MARKETING MANAGER have gone in any “normal” year. So during the first quarter of Tina Beebe the new year, Club Industry has asked a variety of people in the ART DIRECTOR fitness industry to share their thoughts on trends to watch in Jordino De Los Santos 2021. Club Industry gathered insights from industry consultants Rick SENIOR DIGITAL Caro of Management Vision, Art Curtis of Curtis Club Advisors ADVERTISING SPECIALIST Taylor Gleason and Bill McBride of BMC3 Consulting (and CEO of Active Man- agement) as well as Jennifer Halsall-de Wit, board member of www.clubindustry.com Europe Active and COO of Women in Fitness Association, and Rick Mayo, founder of Alloy Personal Training. Each of these individuals share their thoughts in the first stories of the report, interspersed with insights from the report sponsors. PHOTOGRAPHY: GETTY IMAGES The last story offers insights from 30 individuals representing commercial clubs, studios, YMCAs, parks and rec facilities and This report is sponsored by: other segments of the industry. Those individuals include Mel Kleist, executive director of East Bank Club; Raj Kumar, execu- tive vice president, international of Self Esteem Brands; Rebecca Lee, vice president of membership & wellness at YMCA of Metro Dallas; Sarah Luna, president of Xponential Fitness; Todd Maga- zine, CEO of Blink Fitness; JoAnna Masloski, COO of Wellbridge; David Rachal III, founder and CEO of Healthefit: Greta Wagner, executive director/executive vice president of Chelsea Piers; and Omar Yunes, CEO of 54D. So sit back, relax and check out these insights to see if they match up with your thoughts on where the fitness industry is headed in 2021. Sincerely, Pamela Kufahl Director of Content Club Industry www.clubindustry.com 3 FEBRUARY 2021 A YEAR IN FLUX: 2021 POSES CHALLENGES FOR THE HEALTH CLUB INDUSTRY Coming off its most devastating year ever, the health club industry is facing challenges in 2021 that will require a marathon effort and forward thinking to overcome. BY RICK CARO, PRESIDENT, MANAGEMENT VISION n 2020, the fitness industry had the most freeze. Many indicated they will return after they Idevastating year in its history. Clubs were receive both doses of the two-dose vaccine. Many shuttered, sometimes more than once with no adults were told to work from home, and children clear guidance on timing. When allowed to operate, attended school virtually at home. Many people some state and local restrictions were devastating struggled financially. While at home, many people and even prevented clubs from actually invested in home reopening properly. The image of the health club fitness equipment industry was challenged as clubs were labeled “And the positioning of the and sought digital as “super spreaders of COVID-19” and included fitness solutions. as part of the overall indoor spaces (including club as a necessary part No one is bars and restaurants, casinos and indoor sports of one’s lifestyle will take expecting the arenas) rather than being universally viewed as workforce to part of the healthcare continuum. Club owners time to win the day.” resume full-time came together, including with fellow local office use for most competitors, to create state alliances and join in of 2021. Until next the messaging, research, lobbying and funding to fall, youths are still mostly or entirely at home. tell the full industry story. Governments are likely to maintain the same level of restrictions even while more people gain access Club Challenges to the vaccine. And the positioning of the club as Suddenly, the pandemic affected the viability of a necessary part of one’s lifestyle will take time to clubs globally. Governments closed clubs. When win the day. allowed to reopen, they did so with restrictions on capacity permitted, distancing measures in place Business Challenges and required use of masks, often causing many Clubs are facing liquidity challenges. Membership existing members to cancel or go on “freeze.” levels, depending on the segment, are often at 50 Clubs today still have large percentages of percent to 60 percent of last March’s totals. A huge members from the closures of last March still on percentage of members remain on freeze with no 4 FEBRUARY 2021 committed return date. Nondues revenue The question is what that direction looks like categories are often at 25 percent to 30 percent of post-pandemic. Many assume that clubs will need a year ago. Even with severe cost-cutting measures, an omnichannel approach to offer a pure brick- clubs are struggling to break even. So, liquidity and-mortar offer, a digital-only membership and is a major force affecting all clubs. Negotiations a combined one. This could lead to increasing the with landlords have often yielded overall industry membership as a revised rental arrangements, whole. pushing out the missed payments “The club industry is The club industry is not likely to to formulas for future years. Few return to previous levels until the landlords have forgiven missed not likely to return to fourth quarter 2021. And it still may payments. Banks have also been previous levels until the be less than 100 percent at that willing to re-do amortization juncture. It will need to get more schedules. Government assistance fourth quarter 2021. And it medical advisors to give credence in the form of PPP loans on Main still may be less than 100 to the club experience, do more Street bank loans has helped, but research to prove clubs are safe, do it is a temporary fix. percent at that juncture. ” better public relations and overall About 17 percent of all U.S. messaging, ensure compliance clubs have closed permanently. with all regulations, create regular state alliances, Those with access to capital may be able to obtain support IHRSA’s new lobbying efforts for the attractive deals to acquire some of these. The industry and connect to its local communities studio component is struggling with the local in deeper ways. It will be a proverbial marathon distancing requirements for member usage. effort to come back in the near future. Until those are eased—or even eliminated—these businesses cannot operate even at break-even in BIO terms of basic operating costs. The larger clubs, Rick Caro is president of especially those with outdoor components, have cleverly developed regular outdoor usage under consulting firm Management tents and temporary pavilions. The HVLP (high- Vision Inc., which provides volume, low-price) segment is recovering faster management expertise to than most but is heavily weighted to returning 20- clubs, real estate developers, to 40-year-old members. Development of new clubs hospitals, hotels, resorts and has slowed and is tied to available capital levels. appraisers. He also serves Franchises are getting solid support from as an expert witness. He does feasibility studies, franchisors and are likely to survive overall. business plans, loan proposals, valuation of the The mid-tier clubs are sensitive to their worth of clubs, assistance in the buying and selling previous challenge of positioning and need for of clubs, operational analyses of existing clubs and differentiation. Even the largest companies in this financial acumen.
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