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Deloitte publishes first findings from the HealthClubBenchmark
Retention levels in UK health clubs have increased by 0.4 per cent during the 12 months to March 2006, yet with total operating costs on the rise, profit margins have fallen by 4.1 per cent.
These are the first findings from Deloitte’s inaugural HealthClubBenchmark project, which draws on data representing 1.4 million members and nearly 500 health clubs.
The survey shows that increases to the cost of utilities – which has from £23 to £31 per member per year – and to a lesser extent payroll – which has risen 3.5 per cent from £150 to £155 per member per year– are pushing up the costs of running a club. As clubs are not passing on these increased costs to their membership, they are seeing a strain on revenues.
Adrian Balcombe, corporate finance partner at Deloitte, said: “Monthly membership subscriptions at a UK health club average £38 and although these have increased at 2.7 per cent – more than the rate of inflation – direct operating costs have increased by nearly double this rate.
“Also of concern is the fact that during the first three months of 2006, which are prime months for attracting new members, retention rates have begun to fall, indicating that with tougher conditions in the UK domestic economy, some members are opting to cut their discretionary spending.”
The survey also revealed that the average joining fee is just £13.30 per new joiner and that for the first time ever, the cost of joining fees in London is £2 lower than in the provinces. Details: www.deloitte.co.uk