CBE Winter Report.qk - IHRSA

Interview We will work with our partners
in their respective markets to share best practices
to clearly position themselves and deliver
a product that their target consumers
desire and value.
In addition, results-orientated programmes,
such as weight loss, are on the rise. People
are very willing and eager to pay three or
five times the amount that they’d normally
pay for a monthly membership if they see
results. Co-pay programmes and subsidies
from insurance companies are also becoming
more common. However, insurers are
requiring proof of qualified staff. Thus,
certification will be increasingly important.
CBE: Do you foresee any standards legislation
coming from the EU on this, or is it
more likely to happen on a country-bycountry
basis?
HM: I see it happening country by country,
initially. European-wide legislation will
follow later.
CBE: What about VAT?
HM: High or low, VAT affects the net amount
that a club receives from the member.
For example, Austria has a VAT of 20%;
Germany is at 19%. Some countries, such as
Back to the Future
Belgium and, I believe, Sweden, have
a reduced VAT. This is a tremendous
advantage because they have to pay less
tax up front to the government.
There is a law in the EU that allows
countries to decide whether a lower rate
of VAT, which now applies to necessities
such as groceries, can be applied to
health club memberships as well.
Once lobbying becomes more concerted
and more professional in Europe, we will
see more countries understanding that
creating an incentive for prevention, with
a reduced VAT on health club memberships,
will benefit health, as well as have
a positive impact on club net revenue
and profitability.
CBE: The newly published
2007 IHRSA European Market
Report: The size and the scope
of the health club industry
shows that market penetration
rates range from 16.4%
in the Netherlands to 3.4% in
Russia. What do clubs need
to do to improve these rates?
Hans Muench is well-known to many IHRSA members—for good reason. He
has had a long and varied career in the industry, and, by selecting him as the
new Director, Europe, IHRSA has returned to its roots.
Muench first became involved with IHRSA in 1984 when he was working on an
IHRSA-sponsored study of the European club industry as part of his MBA thesis. He
received his degree in international business from the University of South Carolina
in 1985. In 1994, he became IHRSA’s first director of international development,
and worked out of the association’s US office in Boston, where he established the
foundation and strategy for its international activities. He returned to Germany with
his family in 1999.
A German citizen who is based in Munich, Muench speaks fluent German, French
and English. He has a rich history in the fitness industry, ranging from chief
development officer of a small chain of health clubs to senior executive positions in
major fitness equipment companies, including Life Fitness Europe. Before rejoining
the IHRSA staff this year, he was Area Manager for Nautilus in Germany/Austria.
“We spent the summer months talking to our European members and
partners to learn more about their needs to help us determine the qualities and
skills that were necessary in this position,” said Joe Moore, president of IHRSA.
“Hans embodies what we were looking for, and we are thrilled to have him back
on the team.”
16 Club Business Europe � JANUARY/FEBRUARY 2008 � www.ihrsa.org
HM: Each club must reach out to its
target consumers and create an image
that attracts this group. For more people
to consume our product, the perception
among consumers must improve.
In addition, income levels must rise in
developing markets so that the general
population can afford to make monthly
membership payments.
CBE: The 2007 IHRSA European Market
Report also details 2006-2007 mergers and
acquisition activity. In your view, what do clubs
need to do to attract more Private Equity?
HM: We need to raise our level of professionalism
by recruiting talent from
outside the fitness industry.
Also, if we collect better numbers,
track our growth and communicate
our message better, it
will help investors make the
decision to invest with us.
For example, how many
potential investors know that,
for the last 20+ years, our
industry has grown consistently,
while proving itself to be
recession resilient?
CBE: What does the industry need to do
to work more closely with the medical
community?
HM: Europe needs to have a basic level
of club standards and certification to
demonstrate to the medical community
that we are part of the solution and
professional enough to be a trusted part
of their industry. We must also address
the issue of competitiveness, and our
industry taking away patients from doctors,
hospitals and insurance companies.
CBE: In your view, how can the industry
become more “professional” in the eyes of
the press and various governments?
HM: IHRSA is helping clubs present
themselves better with studies, statistics
and strategies. Leading clubs should
know their various representatives and
be in touch with them on a regular basis.