Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, January 12, 1992 TAG: 9201100452
SECTION: BUSINESS PAGE: E-1 EDITION: METRO
SOURCE: DANIEL HOWES
DATELINE: LENGTH: Long
BUILDING SWEAT EQUITY
THE annual rite has begun: Roanoke Valley health clubs are swamped with bodies determined to shed holiday poundage and stay in shape throughout the New Year.But odds are most of them won't.
"Without a doubt, a lot more people join now than are going to be here in a year using it," said Bud Grey, vice president of Roanoke Wellness and Fitness Inc. The for-profit affiliate of Carilion Health System operates the Roanoke Athletic Club, commonly called the "RAC."
"We're trying to get across to people, `You don't get out of shape in a week and you're not going to get back into shape in a week.' "
"It's harvest time" for the nation's 12,000 health clubs, many of which sell as much as 40 percent of their annual memberships in the first 60 days of the year, said John McCarthy, executive director of IRSA-The Association of Quality Clubs in Boston. "It's the time of year when, from our point of view, the fruit is ripe."
Post-holiday specials are rampant, from the RAC's "Guiltbusters" discount on its initiation fee to the Roanoke YMCA's "Resolution Solution," a promotion for current members to enlist new ones. Some advertise, others can't afford it or think it would be inappropriate - such as the non-profit YMCA.
Roanoke Valley club operators seem unable to suppress a chuckle when asked if they are busy these days. Would-be triathletes are clamoring for tours of gyms and pricing the competition. People are deciding which place to leave their sweat - and their money.
"We're swamped, and we didn't even do any advertising," said Regina Ierardi, manager of the LancerLot Family Fitness Center and Sports Complex in Vinton. "We've got more than we can handle."
It's the same everywhere. New faces are straining at the weight machines, bouncing in aerobics classes and changing in locker rooms. But experts say as many as 35 percent of those working out this month for the first time won't still be at it next January. Some may even be gone within a few months.
So how do the valley clubs - ranging from the comparatively opulent RAC to the more spartan YMCA downtown - pay the bills come summer when the surge abates and dues collections drop?
The exercising, said the RAC's Grey, stops long before the money. The resolve that got many huffing-and-puffing after the holidays begins to wane, and folks stop showing up. But unless they cancel their memberships - usually a fairly simple process - most clubs will keep deducting monthly dues from their bank accounts.
"With the bank draft - because it's easy - some people forget about their account," said Cal Johnson, executive director of the YMCA of the Roanoke Valley.
Indeed, the cash flows heavier in the first three or four months of the year than in the summer months, when exercisers disappear and spend their free time outdoors or on vacation.
"The January-through-March quarter really makes or breaks health clubs," Grey said. "This is like the day after Thanksgiving for retailers."
And just as retailers have been stung by the recession that won't go away, some fitness club operators say the downturn has affected their membership rolls - in positive and negative ways. Some have seen members re-evaluate their financial priorities, and "I think more and more people are saying, `We're paying for it, we're going to use the damn thing,' " Grey said.
Others have seen members cancel altogether because they lost a job or concluded that it's more important right now to buy food and pay the mortgage. "The economy has a real effect on health clubs," said Becky Lucas, owner of World Gym Inc. on Williamson Road. For some, "it's the first thing to go."
Still others have had members lose jobs but stick around because staying in shape is a top priority. "We've had several members who were affected by businesses that closed, but they're still here," said Mary Basham, manager of New Fitness at Crossroads Mall. "It helps you to deal with things. You can handle stress a lot better."
For all the bodies coming through the doors, looking for ways large and small to get fit, club operators say the business can be difficult and not as profitable as some might think.
It's capital-intensive, in most cases requiring at least a $250,000 investment in equipment and facilities to open the doors. And it's labor intensive - those folks who run aerobics class, staff front desks and weight rooms cost money, especially the professionals who are trained to train the members.
Monthly dues debited from thousands of bank accounts keeps the cash flowing into valley clubs. The "lifetime memberships" popular in the mid-1980s are gone now, victims of new laws passed to protect consumers and bad publicity. Remaining operators say that's all for the best.
"Any club that sells a lifetime membership . . . is destined to fail," said Dean Huffman, owner of Gold's Gym and Fitness Center on Electric Road. "The money's going to run out if they set up a program like that."
Some of the worst scandals suffered by the health and fitness industry sprang from scams that ended up taking members' money and then closing the gyms' doors. Members were left with no club, no membership and a wariness among consumers that still hangs over the industry.
"Anytime someone gives you an opportunity to join for multi-years, you should be skeptical," warned the Y's Johnson. "It doesn't make sense." Should a club close abruptly, members with month-to-month memberships will only lose that month's dues and not large lump-sum payments.
Roanoke Valley club operators say they still are smarting from the Living Well fiasco in 1989, in which three area clubs closed and left members scrambling for refunds from the parent company.
At the time, the RAC's Grey told the Roanoke Times & World-News: "We've had a lot of what we call the hit-and-run kind of athletic clubs that do nothing but sell memberships and sell memberships and sell memberships and have no monthly dues, for example. Unfortunately, it gives a real black eye to this industry."
Under Virginia law, a fitness center that closes must provide an alternative facility within 5 miles or its members can cancel their contracts and receive prorated refunds.
Linda Muncy, who owns the Salem Fitness Center with her husband, Russell, knows what it's like to heal the "black eye" left by the Living Well scandal: Their year-old club inhabits the West Salem Plaza space vacated by the now-defunct spa.
"Nobody's doing the contract thing anymore," she said. "The market that we cater to will not allow that. A club can't operate [that way]; members are skeptical. The fact that has hurt the Salem Fitness Center is that Living Well was here before us."
The Muncys aren't going anywhere, she said. The center - which she describes as "really a community club" - is their retirement investment.