Jun 15

Why the massive gyms? It takes a ‘village of health’ to battle obesity

Luxury athletic clubs in the Houston area are bulking up in size and amenities, part of a national trend to capture the growth in fitness spending.

Life Time just opened one of the region’s largest gyms, a $42 million complex spanning 248,000 square feet. The two-story fitness center in Cypress features 10 tennis courts; two basketball courts; several pools, a salon and spa; co-working spaces; children’s classrooms and a restaurant.

It’s part of a luxury fitness boom that comes as Americans have grown increasingly health conscious amid public health campaigns waged against cardiovascular diseases, diabetes and obesity.

Five miles away, VillaSport last year opened a 130,000-square-foot athletic club with a basketball court, pools, spa, cafes, turf field and studios for cycling, yoga and group exercise.

And inside the Loop, Equinox in late 2015 opened its first Houston location, a 33,000-square-foot club in the River Oaks District with yoga, pilates, barre, cycling and group fitness studios, as well as a spa, childcare center, cafe and juice bar.

With growing awareness of the benefits of exercise, more parents are seeking ways to keep kids active, more employers are subsidizing gym memberships for their workers, and more Baby Boomers are signing up for gym memberships as they enter their golden years.

As a result, the U.S. fitness club market has grown to a $33.7 billion industry, increasing by 2.8 percent annually since 2013, according to IBISWorld, a market research firm.

The number of health club memberships in the U.S. grew 3.4 percent annually between 2012 and 2016, according to the most recent data available from the International Health, Racquet, and Sportsclub Association. Today, 57.3 million Americans — or about a fifth of the U.S. population — have a membership to a health club.

It’s a trend that battles against another: An estimated 42 percent of Americans are projected to be obese by 2030, according to a study by the Centers for Disease Control and Prevention.

Fitness companies, in the fight against obesity and to capitalize on growing health consciousness, are expected add more than 6,000 new locations over the next five years. Nearly 7 percent of the nation’s gyms are in Texas, eclipsed only by California and New York, according to IBISWorld.

“You should expect to see companies like Life Time continue to grow,” said Jason Baker, a co-partner of Baker Katz, a Houston-based retail brokerage. “This is not a trend that’s going to stop.”

Tene Thomas, 46, and her husband Shawn Thomas, 45, joined Life Time Athletic in Cypress earlier this year. The Cypress residents are currently members at a 24-Hour Fitness, where they pay $50 a year under a grandfathered membership deal. But at Life Time, the family’s membership cost is around $150 per month themselves and their five-year-old son.

Tene Thomas, an accountant, said she doesn’t know yet if the additional cost will be worth it, but said they were impressed by the resort-style facilities at Life Time. The family had been watching the new building go up since construction began in May of last year.

“Fitness and health is a big part of our life,” Tene Thomas said. “We plan to take advantage of all the amenities and kids activities.”

For decades, fitness clubs have sought to attract members with low prices. Traditional fitness companies, such as Planet Fitness, offer membership rates that range from $10 to $20 per month.

As disposable incomes have risen however, consumers are seeking a more premium experience for the entire family, which comes at a price.

Membership rates at Life Time Cypress start at $119 per month for an individual, and can average around $190 per family. At VillaSport Cypress, monthly dues for a family of four is $246. Equinox charges on average between $140 and $250 per month.

“(Members) want an experience and they’re willing to pay a premium, luxury price tag,” an Equinox spokeswoman said in an email.

Still, Life Time Cypress has signed up more than 2,000 families since membership sales began in January. VillaSport and Equinox did not disclose membership figures.

These luxury gyms offer not only a place to work out, but a community where members can work, eat, relax and socialize with health-conscious peers.

“We’re focused on delivering total health,” Life Time CEO Bahram Akradi said. “We believe we can impact the quality of people’s lives by satisfying their mental, physical and emotional wellbeing.”

Life Time Cypress features all the trappings of a typical gym: workout studios, tennis courts, lap pools, yoga and cycling studios. The club offers more than 180 fitness classes for adults and children, as well as personal training, nutrition coaching and chiropractic care.

However, the club also has a co-working space with free Wi-Fi and several meeting rooms, a salon and spa, and a fast-casual restaurant serving quick meals, smoothies and protein shakes. A kids program offers tumbling, yoga, arts and Spanish immersion classes for children ages 3 months to 11 years. Outside, there’s a large resort-style pool with water slides, cabanas and poolside service from an outdoor bistro.

“This is so much more than a gym,” said Tomas Kobersky, general manager of Life Time’s Cypress campus. “It’s a village of health.”

It’s also akin to a country club, except without a golf course, Life Time CEO Akradi said. As the sport of golf has struggled to attract younger players in recent years, luxury fitness clubs may supplant the role that country clubs played in society as a place where business executives gathered to work out, relax and socialize.

“We want to create the same type of country-club atmosphere, but around athletics instead of golf,” Akradi said.

“For some people, clubs like VillaSport can replace a traditional country club in terms of providing many luxury amenities and many social opportunities,” Laurie Smith, VillaSport’s senior vice president, said in an email.

Akradi, who started in the fitness industry in college to pay for his engineering studies, said it was always his vision to create massive fitness facilities spanning more than 100,000 square feet. When he got started in the industry during the mid-1980s, the typical gym was between 20,000 square feet and 50,000 square feet.

“From early on, I wanted to build an athletic resort complex,” Akradi said. “The challenge with the lower-end stuff is that it’s too easy to open one up. I wanted to build a Four Seasons, a Ritz Carlton type of club that’s so expensive and so daunting and has so many details, it scares everyone off.”

Life Time, which opened its first club in 1992, has 1.8 million members nationally, and hopes to grow to 3 million members in the next three to four years. The Minneapolis-based company was acquired in June 2015 by private equity firms Leonard Green & Partners and TPG Capital in a transaction valued at more than $4 billion. Today, the company has an estimated 4.9 percent of the fitness market and generates about $1.7 billion in annual revenue, according to IBISWorld.

Life Time operates 138 clubs nationally, including eight clubs in the Houston area and two in San Antonio. It has 35,000 employees. The company’s Houston locations include City Centre, Champions, Cypress, Kingwood, Cinco Ranch, Lake Houston, Sugar Land and the Galleria.

The company’s Baybrook and Greenway Plaza locations are set to open by mid-2019, and there are plans to invest $200 million in new facilities and remodels over the next two years, Akradi said.

VillaSport, which opened its first club in 2007, has five clubs nationally, including two in the Houston area. The San Rafael, Calif.-based company has locations in The Woodlands and Cypress, and has one planned in Katy that is set to open in 2019. The company employs about 1,500 workers.

New York-based Equinox, founded in 1991, operates 94 clubs around the world, including one in Houston’s tony River Oaks District.

In Houston, luxury fitness clubs such as Life Time, Villa Sport and Equinox are building off the model set nearly 40 years ago by The Houstonian Hotel and Club, which sits on 27 acres near River Oaks. When the 289-room luxury hotel and 175,000-square-foot health club opened in 1980, it was one of the first wellness retreats to open in the city, said Cher Harris, the club’s general manager.

The Houstonian features basketball and tennis courts, studios for yoga, pilates and cycling, a rock climbing wall, kids’ gym, a spa, smoothie bar, five restaurants and a cafe, resort-style and lap pools, and a boardroom and library. The club offers 200 fitness and aquatics classes per week, as well as nutritional counseling, social events and kids camps.

The luxury club has attracted 5,700 of Houston’s most well-heeled families to join. Members must pay a $29,000 one-time initiation fee, as well as a $400 per month membership dues.

Harris said she welcomes the growth of luxury fitness clubs in Houston. The Houstonian Club’s staff scopes out the competition regularly to stay abreast of current fitness trends, she said.

“There’s not enough people who exercise, so the more people that can be enticed to exercise and embrace a healthy lifestyle, the better,” Harris said. “There’s more than enough room for all of us in Houston.”


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