Slimmed gyms

Smaller, less-expensive health clubs that feature minimal amenities and 24-hour access are growing

March 08, 2009|By David Kohn | David Kohn,Sun reporter

Exercise can help battle stress, but many consumers are rethinking their gym memberships in hopes of trimming costs.

That in part is helping to fuel a growing niche in the health club industry - self-service gyms that never close. While typically smaller than their full-service competitors, these gyms offer fewer amenities, cheaper prices and 24-hour access, though it could mean a member is working out alone.

Jamie Darr joined a Snap Gym in Millersville last year after switching from a bigger gym. The gym, part of a growing franchise with treadmills and weight machines, is housed in an area shopping plaza and provides magnetic-key access around the clock. Darr pays $35 a month, about half as much as her previous membership.

"It had a lot of things I didn't use, pools, a basketball court," she says of her old club.

So when Darr was laid off from her job as a mortgage loan processor in July, she kept the Snap membership, because exercise helped her stay calm. Had she belonged to a more expensive club, she would have quit, she says.

While many larger health clubs have been hurt by the economic crisis, small streamlined gyms are expanding across the country. The clubs are adding new members nationwide, many of them trying to save money.

The clubs are also significantly smaller, typically between 2,000 and 4,000 square feet. So-called big-box clubs can run anywhere from 10,000 to 50,000 square feet. The 24/7 clubs also differ in that they usually have on-site staff for six or eight hours a day; the rest of the time, members are on their own.

"We're seeing substantial growth" with smaller clubs, says Joe Moore, president of the International Health, Racquet & Sportsclub Association, the health club industry trade organization. "It appeals to a very large segment of the population."

By contrast, Moore says, larger health clubs are not growing, or are losing members.

Overall, there are almost 30,000 health clubs in the U.S. The industry group estimates that up to 3,000 of those gyms are smaller, 24-hour clubs, many of which have opened within the past five years.

The smaller, self-service clubs typically provide 24-hour access by giving members key passes to get in the locked gyms.

The biggest players in this new category are Snap Fitness and Anytime Fitness, two nationwide chains that between them have nearly 2,000 clubs.

"People are looking for affordability these days," says Mark Daly, media director for Anytime Fitness, which is based in St. Paul, Minn.

The company has more than 1,000 clubs. Anytime Fitness, which started six years ago, had $23 million in revenue last year, and has more than half a million members.

"By stripping out some of the amenities like rock-climbing walls, pools and day care, we can lower our prices without compromising the quality of our workout," says Patrick Strait, marketing director for Snap Fitness, which is based in suburban Minneapolis-St. Paul. Snap, which started in 2003, has about 1,700 clubs, mostly in the U.S.

Both chains generally charge between about $40 a month for a single membership, or about $20 less than many larger clubs.

Donyell Hood, marketing director for Merritt Athletic Clubs, said her company did not see the smaller gyms as competition.

With nine clubs, Baltimore-based Merritt is the region's largest local chain. Although two Merritt clubs are open 24 hours, most are not. Most feature pools, day care, and basketball and racquetball courts. Merritt's customers are looking for more features, not less, Hood said. She said Merritt had a "flat" year in 2008, and is trying to increase membership by adding new elements, including a digital interactive exercise machine aimed at children and teenagers.

Hood said Merritt's club members like the full-service aspect of the gym because of things like safety, workout tips and other amenities. At Merritt, she says, staff members are always on hand to watch out for members' safety and to make sure the equipment and facilities are working properly.

Snap, Anytime and other similar gyms acknowledge that working out without any employees around presents a potential safety risk. To deal with this, they provide several safety features for times when staff is gone. Clubs feature panic buttons on the walls, that when pushed automatically call 911.

Janie Ramsay, the owner of the Millersville Snap, opened her club in June 2007. She had previously co-owned a business that finds housing for people who need to relocate. When her sister bought her out, Ramsay invested the proceeds in a Snap franchise. Ramsay put up about $200,000; Snap says that franchisees typically invest between $150,000 and $250,000.

"I wouldn't say we're recession-proof," she says. "But we're doing well. We've seen an uptick." She is hoping to open another franchise within the next year.

"People can get a great workout for half the price," says Carrie Lang, who opened an Anytime Fitness club in Forest Hill.

Liquor store owner Scott Cho typically arrives at the Snap gym near his Glen Burnie home at 2 a.m. after working 10 or 12 hours. He likes the fact that it's never crowded and the 24-hour access allows him to work out almost every night after work. During the past year, he said, he lost 14 pounds.

Even his customers have noticed.

"They tell me I look 10 years younger than before."

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