Town Sports International wants to be the apple a day that keeps the doctor away in NYC. The company owns and operates some 160 full-service health clubs, about two-thirds of which are in the New York City area under the New York Sports Club banner. The company also has clubs in Boston, Philadelphia, and Washington, D.C., and claims about 523,000 members. It offers vairous membership plans that cater to its members' usage needs. Members designate a specific "home" club they can use at any time and retain an option to upgrate and gain access to multiple clubs within a single region, or pay even more to gain access to all clubs in all four regions. Town Sports also has three clubs in Switzerland.
Town Sports operates about 40 clubs in Manhattan, giving it more than twice as many clubs on the island as its nearest competitor. It has another additional 70 or so clubs that operate within a 120-mile radius of New York City. The company targets the "upper value" market segment, which consists of individuals between the ages of 21 and 60 and who earn incomes between $50,000 and $150,000 per year. Its goal is to be the most recognized health club network in each of the four major metropolitan regions it serves.
The company has been experiencing the effects of a weak economy that has eroded consumer spending. As a result, Town Sports has seen an overall increase in member cancellations, a decrease in new memberships, and less revenue from ancillary services and marketing. In addition, the number of competitors providing lower cost memberships has grown.
Town Sports is focusing on growing its non-membership revenues (about 20% of sales) through expanding its in-club advertising and retail sales efforts. Other non-membership revenue sources include Sports Clubs for Kids (swim lessons and sports camps for children) and Small Group Training programs. Most non-membership revenue comes from personal training fees, which represent about 13% of the company's total revenue. – less
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