There is tremendous activity in the health club industry in the United States as buyouts, public offerings and multibillion-dollar investments rapidly change the $26 billion industry.
And the economic recovery from the recession has created additional momentum.
The ramifications are playing out locally where, according to Infogroup USA, a marketing firm and business data provider, there were 141 such facilities and related businesses registered in Sonoma County in the past year. They range from spartan chains such as Curves and CrossFit to ritzier places such as Montecito Heights Health Club, which features a pool, tennis courts and even a spa.
The flurry of activity can be seen at the Orangetheory Fitness studio at the Coddingtown Mall that opened in April. Customers work through intense interval strength and cardiovascular training for 60 minutes as they are hooked up with a monitor that precisely measures their heart rate and calorie burn. Two more locations are already planned for Rohnert Park and Petaluma.
St. Joseph Health acquired Active Sports Clubs Petaluma in January as part of its focus on offering more fitness and wellness services.
And, Anytime Fitness opens a facility this week at the new Epicenter complex in northwest Santa Rosa. Owner Brett Livingstone said he hopes his 9,800-square-foot facility can capitalize on the foot traffic of an anticipated 950,000 annual visitors who will trek through the entertainment and sports complex, which features three indoor soccer fields.
“This is an incredibly competitive area,” said Livingstone of the Santa Rosa market. Livingstone, who owns four other Anytime franchises in Larkfield, Petaluma, Rohnert Park and Berkeley, noted some big-box fitness chains have found it hard to find a spot around Santa Rosa. His investment at the Epicenter location will be about $850,000.
“Petaluma, I think, is a little more competitive,” he said. “Competition breeds some excellence. Location is important, definitely. You’ve got to operate correctly and you’ve got to provide what people want.”
The industry has seen an uptick in the aftermath of the recession, as about 19 percent of all Americans belong to some sort of facility, according to the International Health, Racquet and Sportsclub Association, the primary trade group for the sector. Likewise, the number of health clubs has risen nationally by 17 percent since 2011. It stood at 36,180 clubs in 2015.
But the challenge for owners is the high attrition rate, a major source of concern in maintaining a sustainable business. The IHRSA said the average club tenure for members is about five years; about 24 percent keep their membership a year or less, and 51 percent are members from only two to five years.
“We put a lot of time and energy into our sales,” Livingstone said, noting his attrition rate on an annual basis is 35 percent, while the overall industry in near 50 percent.
The money coming from private equity, new franchisees and publicly traded companies has somewhat settled the industry, especially now, as much of the growth comes from outside the United States, said Jill Kinney, chairman at Active Wellness LLC, which manages the Petaluma health club that St. Joseph Health bought earlier this year.
“The industry is really maturing,” Kinney said.
She is a longtime veteran who can remember sparsely attended industry conferences in the 1980s. Kinney now sees an overall trend moving away from the hardcore fitness activities to wellness programs that promote a healthy lifestyle, which have a natural synergy with hospitals and medical centers. Such activities can range from weight management programs to aquatic classes for seniors to rehabilitation programs for those coming off physical therapy.
The new wellness focus intends to reach the remaining 70 to 80 percent of the population that doesn’t belong to a health club. The Petaluma club has seen its membership jump by 400 people in the last few months through improvements and additional programs and stands at about 6,000 members. Adult memberships are priced around $90 a month at the Petaluma facility.
“A lot of times they (customers) are feeling that they are not ready for that level of activity,” Kinney said. “There is a lot of intimidation.”
St. Joseph Health also has taken the lead in working with employers to help promote wellness among their workers, which represents another opportunity for growth because businesses have a financial motive for keeping their employees healthy.
In Newport Beach, it partnered with the Irvine Co. on a 17,000-square-foot facility that features a medical office, a fitness center and a boutique studio. In Petaluma, it works with 40 businesses that have membership affiliations, Kinney said.
“Our strategy is bringing medical, lifestyle and fitness services where people live, work and play,” said Annette Buckel, executive director of wellness for St. Joseph Health.
Even with the focus on wellness, certain trendy workout regimens can take hold, as shown by the popularity of CrossFit, which has five county locations. Participants go through a grueling set of exercises such as power-lifting, calisthenics and aerobic exercises in an attempt to get a buff physique. There is also a barre, which incorporates ballet movements to tone the body.
Another popular activity is SoulCycle, a cycling workout class, which has five Bay Area locations, though the closest one is in Larkspur. A company spokeswoman said there are no immediate plans to open a SoulCycle location in Sonoma County.
The trend has been apparent at Orangetheory, where participants — who range in age from their 20s to their 60s — can burn from 500 to 1,000 calories per session. They seek to get the “orange effect,” in which the club claims participants can get an extra calorie burn for 36 hours afterwards.
Some members note a community or tribe mentality can take hold as participants see each other frequently and become friends. Classes can range from $15 to $20 a session depending on frequency; workouts change on a daily basis. Members sign up for a class via an app that also tracks past workouts.
“People are looking for something different,” said Nicole Del Castillo, a studio manager whose family owns the Coddingtown location. They are planning to open a Petaluma location in the near future. “It’s a combination of everything. It’s different aspects packaged together.”
The rise in such boutique classes has caught the notice of managers at more full-service gyms. For example, Montecito Heights opened a studio across its complex four years ago to serve as a dedicated space for spin classes, given their popularity, said Catherine Dubay, general manager.
“If we really wanted to do it right. ... We needed to build a bigger studio,” Dubay said.
It offers such classes for $12 for members, compared to the $25-$30 cost for a single class at SoulCycle. Yoga classes are also offered in the studio. Club membership is $99 per month for a single adult after a $300 initiation fee.
“The boutique classes are just going to continue to grow,” Dubay said.
Even Livingstone realizes that he will need to up his game at his new location, where membership starts at $50 a month. He is part of the full-service sector within the industry that has competitors such as 24 Hour Fitness, which has three area locations here, and Parkpoint Health Clubs, which also has three locations.
For instance, the new site will have a workout platform called Synergy 360. It’s a monkey bar-like structure that features ropes, straps and a punching bag. It is designed to give a circuit training workout for a group similar to those at boutique facilities but at a lower cost.
“It may pull some people into fitness that weren’t there before,” he said.
The facility also will have a separate room for high-performance athletes to work with trainers, from high-school athletes looking to get college scholarships to professional athletes and Olympians.
“This is where we are going to turn athletes into better athletes,” he said.
The location will have some amenities that Livingstone hopes will give it extra cachet for potential customers, such as use of the basketball gym during weekdays and boot-camp workouts when the soccer fields are not being used.
It will also offer some flexibility. A parent can get in a workout while a child participates in a soccer game — a second-floor weight room overlooks a field. It also has a massive wall of windows so customers can look east to the Fountaingrove hills. He believes the western part of Santa Rosa is not properly served and hopes to take advantage of the location, especially if the complex becomes a greater magnet for urban living.
“I didn’t think I would go this large if I didn’t think that market would be available to me,” Livingstone said.
You can reach Staff Writer Bill Swindell at 707-521-5223 or firstname.lastname@example.org. On Twitter @BillSwindell.