Friday, December 12, 2014
New Year, New You, New Economy?
New Year, New You, New Economy?
Written by: TAYLOR-PAIGE Buchberger
As the end of the year approaches, many of us are preparing to declare our New Year’s resolution for 2015. Some may vouge to volunteer for charity more often, or save money for that trip to Hawaii, but most americans are likely to take the pledge of eating healthier and working out. For those who are already gym rats, you are well aware that the worst time of the year is quickly approaching. With January comes the many, many New Year's Resolutioners. Gym memberships ramp up in January, and without any warning at all really, the crowds flood in on your once almost empty gym. New Year's is the ultimate Monday for the "I'll start on Monday" crowd.
While some sources claim this crowd is short lived and starts clearing out by early February, others state that the number of gym memberships significantly increases throughout the entire first quarter of the year. “More than 12 percent of gym members join in January, compared to an average of 8.3 percent per month for the full year. February comes in second in terms of new clientele, with just over 9 percent of new members joining that month, and March comes in at just under 9 percent of members,” says the International Health, Racquet, and Sportsclub Association (US News). This turns out to be about a 30% to 40% increase in gym traffic.
The graph above represents the number of new members to join a fitness center from the years 2004 to 2009. Notice the spike in data from November to January.
Demand for gym memberships significantly increases during the first months of the new year not only because people are feeling motivated, but also because many gyms offer incentives. “From a gym company's perspective, Keightley said gyms have an incentive to sign members up on Jan. 1, instead of Feb. 1, if members are paying monthly membership fees. “‘The company is making more money,’” he said, explaining that many gyms offer promotions in December to have people commit starting Jan. 1” (ABC News). Because of the increase in demand, gyms can lower their membership fees to attract clients while still keeping their marginal benefits higher than their marginal costs. There are so many competitive producers when it comes to fitness centers that these promotions are almost essential if gyms want to bring in the desired amount of new clients in the early months of the new year. On that same note, however, ‘"Americans are increasingly seeing a gym membership not as a want but more as a need," says Dale Schmidt, industry analyst at market research firm IBISWorld. "It's something Americans are increasingly budgeting into their normal expenses, as opposed to a luxury purchase"’ (US News).
The above graph shows how largely the fitness industry has grown from the years 1997 to 2005.
"Díaz De Terán: The Power of Search Trends." Díaz De Terán: The Power of Search Trends. Web. 5 Dec. 2014. <http://www.diazdeteran.com/2010/09/power-of-search-trends.html>.
Kim, Susanna. "Is the New Year the Best Time to Sign Up for a Gym Membership?"ABC News. ABC News Network, 31 Dec. 2013. Web. 5 Dec. 2014. <http://abcnews.go.com/Business/best-time-sign-gym-membership/story?id=21373583>.
US News. U.S.News & World Report. Web. 5 Dec. 2014. <http://www.usnews.com/news/articles/2013/01/03/its-gym-season-from-now-until-march>.