Health clubs get flexible to help hard-hit members

CHICAGO (Reuters Life!) - When some of its affluent Silicon Valley clientele lost their jobs, Fitness 101 quietly paid their monthly fees.

Bliss has been waiving the $64-per-month individual membership fee for up to three months for a small pool of customers struggling with unemployment; after that time they can opt to renew or cancel their membership.

The 22,000-square-foot club, which Bliss referred to as "middle of the road" in terms of fees and offerings, has focused its efforts on making existing customers happier. Bliss said that entailed maintaining extended hours, providing personal training in small groups as an alternative to costly one-on-one sessions, and investing in new equipment.

"That''s one of the things that set us apart from the chains," said Bliss, who added the club doesn''t make its members sign an extended contract. "It''s a no-risk, heavy reward situation."

This kind of customer service and attention to detail is what is separating independent health clubs, like Fitness 101, from their larger competitors.

According to the International Health, Racquet and Sportsclub Association (IHRSA), a trade group, independent clubs outperformed the median industry retention rate of 72.4 percent in 2008, the most recent full year for which data is available. They also fared better in that area than multi-chain rivals.

Offering customers the ability to get away from it all - even for a little while - seems to be helping the fitness club industry overall; IHRSA said its 2009 survey respondents posted average revenue growth of 2.6 percent in 2008.

"People don''t necessarily view their health clubs as a luxury, especially during a recession when they''re tired and stressed," said Kara Thompson, an association spokeswoman. While IHRSA respondents reported difficulties in the first quarter of 2009, they saw steady improvement over the first six months of the year. "Despite the recession, the health club sector has achieved impressive growth," Thompson said.

TRICKLE UP EFFECT

It''s not just middle-of-the-road clubs that are taking advantage of flexible financial strategies to maintain customers.

The Houstonian Club and Spa, whose clientele includes well-heeled members of Houston''s prominent energy sector, has been letting members spread out hefty initiation fees, starting at $14,000, over a three-year period with no interest. The club, whose average dues are $385 per month, is also allowing customers to temporarily suspend memberships without penalties.

"If somebody gets a little in over their head, we allow them to use the club, bill them their dues, plus a portion of their outstanding dues," said club general manager Mark Stevens.