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Fitness Centers in America   Term Paper ID:27230 Click to get this paper

Essay Subject: Discusses how fitness center business in the US are faced with growing competition from government-run instutions associated with hospitals & similar facilities.... More...

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Paper Abstract: Discusses how fitness center business in the US are faced with growing competition from government-run instutions associated with hospitals & similar facilities. Paper Introduction: Fitness Centers in America The literature on the subject of fitness centers and the way health clubs are operated as a business reflect much of the same concerns noted in Chapter One, notably that these institutions are faced with growing competition from government-run institutions associated with hospitals and similar facilities. Some companies have also instituted their own fitness programs and have built fitness centers in their factories and business complexes. Such facilities compete with fitness centers that are private businesses, often in an unfair manner, especially when the health facility is government-run. This is emphasized by Sneider (1996) with reference to concerns expressed by health clubs in Milwaukee facing increased competition from no Text of the Paper: The entire text of the paper is shown below. However, the text is somewhat scrambled. We want to give you as much information as we possibly can about our papers and essays, but we cannot give them away for free. In the text below you will find that while disordered, many of the phrases are essentially intact. From this text you will be able to get a solid sense of the writing style, the concepts addressed, and the sources used in the research paper. Fitness centers are responding by being morethan simply a gymnasium, for professionals emphasize that being fit meansmore than losing weight and exercising--it means what makes you feel good.Schneider (1996) cites representatives of the industry who believe there isabout to be a boom in the industry as people make increasing demands onfitness centers. "Health clubs show promising growthsigns." Indianapolis Business Journal. Both hospitals and Ys are on a collision course with for-profit private businesses in Milwaukee and other parts of the country(Newman, 1996).Health Club Demand One of the reasons so much competition has developed is that peopleare demanding more health and fitness facilities of whatever type, and thisis true across America. Management. YMCAs and YWCAs are also exempt from payingproperty taxes, and their fitness centers also compete against tax-payingbusinesses. Adams says those contemplatingmembership should be realistic about their level of commitment beforespending their money--and those owning fitness centers must be aware of theneed to maintain interest among even the most committed in order to keeptheir business, but especially for those with less dedication who mightneed encouragement and added services to continue with a program. The organization is a trade association thatrepresents some 3, health, racquet, and sports clubs in 48 countries.The association also believes that the popularity of health clubs will onlyincrease with the impending release of a report by the Surgeon Generaldeclaring a lack of exercise detrimental to one's health. In most states, a member movingmore than 25 miles away from the club is allowed to cancel his or hermembership without further obligation; state laws vary. (1995). Clubs often have experts on-site to help members learn how to usethe equipment. People will generally choose ahealth club close to home or work, and so the site chosen for a fitnesscenter should consider the number of interested residents and workersnearby who would avail themselves of the service. High-impact serenity. Sometimes nonprofits become for-profits, and then they compete evenmore directly after having benefited from subsidies under their earlierstatus. The facility owned by the YWCA will bemore than a fitness center and will offer services to families in need.Historically, hospitals receive tax exemptions for compensation for thecharity care they provide to the citizenry. Cost usually goes down after ayear of membership. In recent years, the Midwest has shown considerablegrowth and a stimulated real estate market. Fitness Centers in America The literature on the subject of fitness centers and the way healthclubs are operated as a business reflect much of the same concerns noted inChapter One, notably that these institutions are faced with growingcompetition from government-run institutions associated with hospitals andsimilar facilities. Another issue for members is what sort of hours a club has. 84-94. "Health clubs exercised about competitionfrom nonprofits." Business Journal Serving Greater Milwaukee. Englewood Cliffs, NewJersey: Prentice-Hall. Indianapolis has a very aggressivestrategy to attract new business. The hospital's fitness center will be anupscale health club marketed at much the same audience as have beentargeted by private clubs. Marketing management. Those wanting just the basic service are more likely to go tothe local Y, which usually does not have as much in the way of services aswould a private club. Rice, B. "Join the club!" Essence. Most fitness clubs offer a wide variety of services which may include:aerobics and step classes; equipment such as treadmills, stair-steppers,climbers, recumbent and stationary bicycles, and free weights and strength-training equipment; a locker room with showers; a steam and/or sauna room;a pool; and often for-fee service amenities such as personal training,massage, nutritional counseling, and other spa-style accommodations. Such facilities compete with fitness centers that are privatebusinesses, often in an unfair manner, especially when the health facilityis government-run. In addition, more clubs have simply found ways to keepmembers interested, and waning interest is one of the prime reasons whymemberships decline (Schneider, 1996).Health and Fitness and the Public Adams (1995) offers a survey of some of the facilities available andwhat they offer so consumers would know what they can get and how much theyshould pay. In any case, hospitals have been going into thefitness business to replace revenue they lost because of cost-containmentpolicies of managed health care, and this places hospitals more and more indirect competition with private, tax-paying businesses. Zeithaml, V. Of course, there is no way toknow this until the fitness center is open. Minneapolis is among thelargest commercial centers between Chicago and the West Coast. (1988). Most health clubs have members pay an initiation fee that can rangefrom $1 to more then $9 . These are only some of the indicators of growth and of the growingneed for amenities in these cities and this region. 5 . They then call for monthly payments for theduration of the membership, with fees ranging from $25 to more than $85.Many clubs have the capability of billing to a credit card each month or ofautomatically deducting the fee from the member's checking account. Sneider, J. Membersmay want different things from the club they join, and it does not hurt tosurvey the membership to see what services they require and how they viewthe services a club already provides. There is a demand in the region forupscale multi-family developments, and security and proximity areemphasized (Petrovski, 1994). Health and fitness club officials recently reportedthat more and more people are using their facilities and that health clubshave reached a popularity equal to that of the beginning of the fitnesscraze in the early 198 s. Other questions asked by prospective members include whether or notthey can bring a guest, what sort of wait there usually is to useequipment, how long the membership is good for (usually a year, butsometimes a shorter period is possible at a higher rate per month), arethere other locations, can any member use any location (with or without anadditional fee), and so on (Adams, 1995).Opportunities One of the spurs to the development of health clubs in some areas ofthe country is a healthy real estate market showing that more people aremoving into an area and may be in need of a fitness center as part of theircommunity services. Indeed, many nonprofits try to become for-profits and still keeptheir nonprofit status, or they invest in profit-making businesses and wantto remain tax exempt. Experts say the average consumer issubjected to a lot of misinformation about exercise, but they also notethat the advertising of inexpensive fitness equipment on television,whether it is effective or not, has contributed to the growth of interestin the subject. Someclubs have personal trainers on the premises and may offer a new member onefree consultation with a trainer who can customize an exercise program forthe individual. Chicago and environs continue to evolve from amanufacturing-based economy to a service-based economy and is becoming amajor trade show, convention, and tourist center. Health clubs are remaining fit in spiteof recession and shakeout. Customer intimacy and othervalue disciplines. and Wiersema, F. Some companies have also instituted their own fitnessprograms and have built fitness centers in their factories and businesscomplexes. Extenuatingcircumstances such as a long-term illness may also justify the cancellationof a membership. Real estateinvestments have increased and various innovative financing mechanisms havebeen developed. This is emphasized by Sneider (1996) with reference to concernsexpressed by health clubs in Milwaukee facing increased competition fromnonprofits. Many of these cities promote business and offer incentives andassistance to entrepreneurs. The private clubs face the added burden ofhaving to pay sales, property, and income taxes, while the hospital doesnot. (1996, May 18). Clubs arealready seeing the positive effects of the health and fitness craze on thepart of the public so that the clubs have had more members sign up thisyear than in any year since 1988. Kotler, P. Cost depends on the type of club selected, and fitnessclubs can offer the bare basics up to elaborate equipment and multipleservices. Private owners in Waukesha were also upset atefforts to open a new YMCA in one area, for this facility would also beexempt from paying certain taxes and so would also have an unfairadvantage. Different clubs have different policies on cancellation, and the sortof policy to be instituted must be considered. Petrovski (1994) points outsome of the urban centers in the Midwest where there are opportunities toacquire real estate that could serve well for a fitness center and where afitness center might be a viable business enterprise. Critics state thatif hospitals want to offer fitness services, they could contract withestablished businesses in the same area, and if they want to offer itthemselves, they should set up for-profit subsidiaries and compete forbusiness like everyone else. The location also confersan unfair advantage to the facility, for it will be able to draw ontravelers and others at the hotel and conference center and environs.Another reason for the anger of private businesses is that the hospitalwill use tax-exempt financing to build the center. Another question raised is whether the personal trainersand experts are certified by at least one of the major certifying agencies--the American College of Sports Medicine, the American Council on Exercise,and the Aerobics and Fitness Association of America are the primary ones.Certified instructors must take continuing-education courses to remaincurrent in their knowledge of the fitness field. Of equal concern was the fact that a YWCA was being constructed in thearea, which would siphon off even more fitness center customers from theprivate clubs, and again the concern was raised that this facility as wellwould have an unfair advantage. Operators of private fitness and athletic clubs in WaukeshaCounty have been unhappy at plans by Waukesha Memorial Hospital's plan toopen an $11 million health and fitness center. Given the belief on the part of theprivate clubs that this is the case, it is not surprising that theirassociation and other groups representing small business recentlychallenged the tax status of health clubs owned by nonprofit hospitals(Sneider, 1996). The hospital says it intends to pay propertytaxes on the health and fitness center, but the facility will still qualifyfor exemptions from certain taxes. Themember could pay the year in a lump sum. A spokesperson for the International Health Racquet andSportsclub Association in Boston, Massachusetts reports that members of theorganization reported an upturn in total revenue from $1.4 billion in 1994to $1.5 billion in 1995. Schneider, A.J. Deliveringquality service. Milwaukee has a business environment thatcompetes aggressively with other areas of the Midwest and that has stateincentives through tax exemptions. Petrovksi, J. There are far more health clubs on the West coast thanare found in the Midwest. (1993). Newsweek, 126, p. When nonprofits become for-profits.Business Journal Serving Greater Milwaukee. The Waukesha County experience offers an example ofthis as two separate nonprofits--the Waukesha Memorial Hospital and theproposed YWCA in Hartland, are each opening huge fitness centers which willbe for-profit facilities. Fitness centeroperators need to assess the data on such growth and determine the needamong the people moving into these areas as well as to assess the businessclimate in each city before deciding on a location.Conclusion The viability of a fitness center project will vary from place toplace, and the operator needs to research carefully the needs of acommunity, the specific amenities desired by potential members, and thecompetitive picture with regard not only to for-profit institutions butnonprofits in the area as well. (1996, May 18). Nonprofits can be the bigger problembecause they have tax breaks and other advantages and can charge lowerrates as a consequence, and many take unfair advantage of the situation tosiphon off customers from for-profit institutions in the region. Hospital and YMCA officials all defended their actions andclaimed that the members they sought would not necessarily be the same asthose who would join for-profit facilities. He finds first thatthe real estate market in the Midwest is vital and shows steady growth,with neither steep risks nor the rewards that can accompany big marketswings in other parts of the country. (September 1995). The size of the proposed facility also creates an unfair advantage--itis proposed to be a 7 , square foot facility and will be on the groundsof the Country Inn Hotel and Conference Center. Koontz, H., O'Donnell, C., and Weihrich, H. Waukesha memorial, however,claims that the health care industry has changed and that providing fitnessand wellness programs are now as much a part of the mission of the hospitalas caring for the sick. "Opportunities in teh heartland."Mortgage Banking. 1). The success of this market derives from the historical stability ofthe Midwestern economy and the relative conservatism of financialinstitutions in this part of the country. Someclubs have short ours, perhaps only during normal business hours orextended into the evening, while others may operate 24 hours a day. This allows the hospital to borrow money at aninterest rate lower than an organization could otherwise gain through thelending market, and certainly lower than a private individual can get. The hospital is selling$11 million in bonds through the Wisconsin Health and EducationalFacilities Authority for this purpose, and the bonds so issued are exemptfrom federal taxes. Most clubs give the newmember three days after enrolling to cancel the membership at no charge.If the member wants to cancel after the grace period provided for in thecontract, however, the member is usually obligated to pay off the balanceof the membership, though some clubs will allow members to transfer themembership to another person for a fee. (1984). She notes first that health-club membershipstend to increase greatly during the holiday season each year, perhapsbecause of increased indulging during that time of year, and perhapsbecause memberships are given as gifts. (1995, December 1). All clubs are gaining new members because of thepopularity of new equipment and new trends within the industry itself, andamong the more popular equipment is that which stimulates riding a bicycleon actual terrain. Harvard Business Review, 71, p. Price is a consideration for those contemplating joining a healthclub. Thus, the hospital could offer memberships to the public at large atsubstantially less than the private fitness centers can charge, given thelatter's higher expenses. Fees for a personal trainer can range from $25 to $75 perhour. (1994, July 1). Newman, C. Inc., 1 2. New York: The Free Press. (1993 Feb. The private companiescharge that the hospital has a tax-exempt status that gives it an unfairedge over private business. There is a difference noted in terms of different parts of thecountry, and as far as fitness centers go, the Midwest is behind the Eastand West coasts. A., Parasuraman, A., and Berry L.L. (199 ). The selling of life-styles: Are you what you buy?Psychology Today, 22, 46-51. (1996, July 22). Her article thus offers information of import to anyonecontemplating opening a fitness center and in need of data on what is beingoffered by the competition. Covering your assets. (1994). References Adams, T. Several recent developments canalso be noted, such as the gains in the labor market in 1992 and 1993.Various positive indicators have drawn more and more investors to themarket in this region, and this means an influx of funds. The Business Journal Serving GreaterSacramento, 18-19. MetroDetroit's economy grew by 9 percent in 1993, one of the highest growthrates in the country. Certain urban markets in the Midwest are given particular strength atthe present time. Treacy, M. Americans as a group are trying to slim down andbecome more healthy, and they want the means to accomplish these tasks intheir own community. Marin, R. McKinney, Y. The economy in Cincinnati has grown 25 percent inthe last decade. NewYork: McGraw-Hill. If this paper is not what you are looking for, you can search again: Search for: or Click here to request an essay written just for you.