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.
Works Cited:
"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>.
I really enjoyed reading your blog post because it is so fitting for this time of year. I think it's so interesting how sports clubs and gyms make "New Years Resolutions" such a big thing. I've never really paid attention to how big this time of year must be for businesses like that. This scenario could be fitting for other businesses as well, too. Maybe salons offering a deal on a hair cut and color to begin the New Year as a "new you". Overall, I think you did a very nice job!
ReplyDeleteTaylor, you provide a different perspective to the holiday season and on what affects the economy after the New Year. Especially with all the extra holiday eating, I can definitely see why people would be enthusiastic about getting to the gym and starting their resolutions, what I am surprised by, though, is how long the gym memberships stay up and how the gym market has increased drastically in the past few years. I think a lot of societal pressure is driving this market and as long as people are wanting to be thin, gyms will always be in demand.
ReplyDeleteI did not even think about prices, or memberships specifically, going up in price in the month of January, however it makes complete sense. Also, I thought it was interesting to see that a lot of gyms have different benefits, promotions, etc. to help keep certain gyms on top due to the high levels of high competition. Overall it makes a lot of sense after reading your post that prices for different services increase by quite a bit due to the "New Years Resolutions" made by people. Great job!
ReplyDeleteNew Years definitely is a time of profit for fitness gyms because of the many "New Years Resolution's". It's funny to see how fitness gyms only get their highest amount of members around the month of January. Because New Years is considered the time of a new start to a persons life and many people choose to become healthier. I enjoyed reading your blog and think you did a nice job.
ReplyDeleteI like the choice in topic, this is a well known fact that has always been a bit funny to people but not many look past that to the economics that really affect this phenomena. The biggest things, other than the large amount of new year resolution-ers, has to be the deals that appear during this time; we've all seen the commercials and ads that appear at the end of December till mid February, and all of them have deals that sound great. These deals suck many people into memberships and create a large revenue with benefits to the gym and the people that are, at least trying, to become healthier.
ReplyDeleteI never stopped to consider the fact that people new years resolutions could actually have such a dramatic effect on the economy. It's quite smart for the gym's to increase prices during january because they know the money will come from some where. Recently, there has been a lot more stress on diet and health problems in society which everyone seems to be combating with gym memberships. there is no doubt that people will keep wanting this type of service meaning its only going to play a larger role in our economy as time progresses
ReplyDeleteIt makes sense that gym's would increase their prices during January, especially since people are making new year resolutions to get fit. Even though most people don't follow through with their new year resolutions for the whole year, the gym can still benefit and make a large profit for many months.
ReplyDeleteI was not aware of how much gyms and their memberships had to do with economics. You made me think about gyms in a totally different way with the new year coming up soon. I don't personally belong to a gym but in the past my parents have belonged to a gym and i know that they have been looking to get back into it. I will see if come the new year they prove your theory right of joining due to resolutions.
ReplyDeleteI never really thought about this. I think that its very smart for gyms to increase there membership because of the people who think that they're gonna work out 24/7 and become more fit. Now some people do end up sticking with that, but the majority ends up just not doing it, but for the business that's a good thing because it's bringing in more money and it's causing them to maybe market there sales a little more and possibly create deals that will bring in more customers so that they can hook them into buying a membership that was raised form the original price.
ReplyDeleteI knew that everybody thought that the "New year new you" happened to too many people in the world because they are going to put effort in to changing themselves for maybe a week and then give up and be exactly how they were last year. I didn't however realize how much of an effect it had on the economy. I think it is a very smart idea for gyms to raise prices at the start of the year. I think you did a great job on this!
ReplyDeleteI find it so interesting that this happens. "New year, New you" is so interesting to me because if you were really determined to get in shape, the start of the new year, after a food filled holiday, just seems rather silly to me. One thing I would like to see the statistics on is if in in December there is a dramatic increase in more recent years because people try to quickly meet their goals of a healthy new person. The other thing I would love to see the statistics on is if healthy alternative food is priced higher around the new year because they demand is more for those resolutionaries.
ReplyDeleteTaylor, I really enjoyed your post. Especially because it was original in light of the many Christmas blog posts currently up. I was not taken by surprise when you described the most common resolution was to work out more often and the accomplishment of this resolution was seen through an increase in gym memberships. What I did find interesting was that gyms actually decrease their prices. To me it would seem like they should increase their prices by just a small margin, and the people who buy the memberships, who are most likely not as educated on gyms, won’t even notice the price difference. This post also makes me wonder what junk food sales look like in January. If many people in America are pledging to eat healthier I would guess that sales of junk food would be worst in January as they are still trying to keep this resolution. Thanks for the interesting read!
ReplyDeleteThanks for citing my article, Taylor.
ReplyDelete