Las Vegas health club industry rebounding after recession

The Great Recession made Las Vegas health clubs sweat along with other businesses. But the sector is pumped for a rebound. Several health club companies have clubs planned or in construction — signs that the market can grow.

The International Health, Racquet & Sportsclub Association said Las Vegas has about 250 clubs and gyms of all sizes. 24 Hour Fitness and Las Vegas Athletic Clubs are the valley's largest-scale health clubs, but scaled-down clubs, such as Planet Fitness and Anytime Fitness are growing by serving smaller audiences.

Planet Fitness recently opened its seventh local club, across from Meadows mall, and its eighth, in Henderson near Lake Mead Parkway and Boulder Highway. The New Hampshire-based company has opened eight valley gyms since 2010.

One franchise holder has five local clubs and has plans to open another five in five to 10 years, regional director Adam Davidson said.

Davidson says Planet Fitness succeeds by thinking, and being, smaller. Its clubs measure 20,000 to 30,000 square feet, serve about 6,000 members and offer value pricing — $10 a month with no contract.

"We don't have the extra bells and whistles like a swimming pool, day care, group exercises or aerobics classes," Davidson said. "We save our space for equipment and locker rooms. That's why we're able to offer it for much less cost to our members.

"Nobody is doing our exact model," he added. "We understand that the average person who wants to work out is not locked to a commitment to gym membership because who knows what's going to change in their lives."

Minnesota-based Anytime Fitness, which has 10 franchise clubs locally, goes the other way — seeking customers willing to pay more and sign annual contracts, he said. An average of $40 a month with a one-year commitment gives members access to 3,100 clubs, which measure about 5,000 square feet, worldwide, National Media Director Mark Daly said.

"We like to say we never strive to be the cheapest club in the market nor be everything to everyone," Daly said. "We're not a big-box club where you get lost among the thousands of members or low prices like Planet Fitness with a month-to-month contract.

"We are serious about helping people get to a healthier place," Daly added. "We consider it a two-way commitment. If you commit to us, we commit to you."

Daly said his company's clubs average 800 members, a group small enough to let management and staff get to know clientele. The company complements a personal approach with convenience — an in-studio video system lets customers access classes, in Zumba, yoga, kickboxing, and Pilates, for example, 24 hours a day.

"The common complaint people have is that classes at other gyms aren't at a time of their convenience and cost too much," Daly said. "Our classes are free, and you can take them day or night."

Market dominators

Las Vegas Athletic Clubs and 24 Hour Fitness dominate the local health club market in size and customers.

Las Vegas Athletic Clubs were founded in 1977, and the current ownership group took over in 1991, said Bret Fitzgerald, vice president of corporate communication and education. The first club on Maryland Parkway near Sahara Avenue had a bar and served as a place not only to play racquetball but grab a beer, he said.

"Everything else was an afterthought but gradually racquetball kind of faded out and smoking and drinking became because less of an activity," Fitzgerald said.

The chain had about 5,000 members in four clubs when it was sold in 1991. A seventh club, the first to open locally since 2008, debuted in May in North Las Vegas' Aliante community. An eighth is in development in Henderson near the Galleria at Sunset mall.

When people are laid off, as during the recent recession, they might find it hard to justify health club memberships. However, Fitzgerald said, the recession had only a "mild effect" on Las Vegas Athletic Clubs' enrollment. Monthly memberships for the chain, which has more than 100,000 members and clubs measuring 85,000 to 90,000 square feet, average $25 a month.

"We still did well," he said. "There was a bit of slowing for a couple of years but nothing that jeopardized the company. We were solid as a rock the whole time."

Fitzgerald said his company isn't planning other gyms beyond the new Henderson club. But that could change.

"We would love to serve other parts of the valley that are underserved right now like Southern Highlands," Fitzgerald said. "Based on the growth of the city, how many health clubs can we put up? We think nine or 10, and again it depends on the growth of the city. Right now it seems to be growing quite nicely."

24 Hour Fitness has 12 local clubs measuring 20,000 to 43,000 square feet. Its latest club, on Ann Road, opened in 2010. The company didn't disclose expansion plans or membership counts.

24 Hour Fitness came to Las Vegas in March 1988 and built most of its clubs in the 1990s and 2000s. Executives say 24 Hour Fitness thrives by offering convenience — many locations — and variety — cardio, pools, basketball courts, racquetball and saunas.

"It's our ultimate goal to serve more and more members and help them reach their fitness goals," Stevens said. "Everywhere you go it will be competitive, because so many (people) don't have a membership."

Barry Stevens, a 24 Hour Fitness district manager, said Las Vegas is a great market for health clubs. One in five people has a gym membership, in line with the rest of the nation, he said.

Around the clock operation suits shift workers, Fitzgerald said. Although peak hours in other markets are 4 p.m. to 8 p.m., peak hours in Las Vegas are from 5:30 p.m. to 11 p.m. or midnight, Davidson said.

Fitzgerald said, "It wasn't that long ago we weren't open 24 hours. In 2001, we switched over from being open 5 a.m. to midnight because it was a big benefit to our members because of the multiple crossover shifts that people have."