Lifetime Fitness 2009 Annual Report Download - page 11

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6
In addition to increasing membership levels, we focus on optimizing our membership dues by improving the mix of
our memberships. Our membership dues mix can be improved by increasing the number of members covered under
a membership (for instance, an individual to a couple membership, or a couple to a family membership). In addition,
a member can upgrade a membership to a higher tier (for example, from Gold to Platinum).
In order to achieve and maintain our membership goals, we focus on demographics, center usage and membership
trends, and employ marketing programs to effectively communicate our value proposition to existing and
prospective members. We also offer a membership option, referred to as a Flex membership, for members who do
not access the center, but still maintain certain member benefits.
Increase in-center products and services revenue.
From 2005 to 2009, revenue from the sale of in-center products and services grew at a compound annual growth rate
of 19.0% from $97.7 million to $232.8 million and we increased in-center revenue per membership from $300 to
$400, with a high of $414 in 2008. We believe revenue from the sale of our in-center products and services will
continue to grow. Our centers offer a variety of in-center programs, products and services, including individual and
group sessions with certified professional personal trainers, LifeSpa services, member activities programs, wellness
programs, Pilates and yoga, tennis programs and the food and beverage from our LifeCafes. We expect to continue
driving in-center revenue both by increasing sales of our current in-center products and services and introducing
new products and services to our members.
Our Industry
We participate in the large and growing U.S. health and wellness industry, which we define to include health clubs,
fitness equipment, athletics, physical therapy, wellness education, nutritional products, athletic apparel, spa services
and other wellness-related activities. According to International Health, Racquet & Sportclub Association
(“IHRSA”), the estimated market size of the U.S. health club industry, which is a relatively small part of the health
and wellness industry, was approximately $19.1 billion in revenue for 2008 and 45.5 million memberships with
approximately 30,000 clubs as of January 2009. Based on IHRSA membership data, the number of health club
memberships in the U.S. increased 10% from 41.3 million in 2004 to 45.5 million in 2008. Over this same period,
total U.S. health club industry revenues increased 29% from $14.8 billion to $19.1 billion.
Our Philosophy — A “Healthy Way of Life” Company
We help our members achieve a healthy and active way of life by delivering high-quality, high-value programs,
products and services in the areas of exercise, education and nutrition both at and outside of our centers. We aim to
connect and engage our members in their unique areas of interest and in accordance with their specific goals and
objectives to help them achieve success. Furthermore, we promote continuous education on the benefits of a regular,
balanced exercise and nutrition program as a key part of a member’s experience by offering our award-winning
Experience Life magazine, along with free seminars on health and nutrition. Moreover, our centers offer interactive
training and learning opportunities, such as personal training, group fitness and nutrition coach sessions, and
member activities classes and programs. We believe that by helping our members experience the rewards of
challenging and investing in themselves, and achieving their health and fitness goals and objectives, they will
associate our company with healthy and active living.
We recognize that our fundamental objective of helping people lead and achieve a healthy way of life depends not
only on helping individuals make good choices about nutrition and physical activity, but also on doing our part to
promote healthy communities and a healthy planet. At the most basic level, we understand that the health of
individuals, communities and businesses all depend on clean water and air, healthy soil and a stable climate. For this
reason, we are committed to conducting our business in a way that respects these connections. Our efforts include a
variety of evolving corporate responsibility and sustainability initiatives that we believe enhance our ability to
support a healthy way of life.