Health & Fitness

Las Vegas’ New Luxury Market

By  J. Malcolm DeVoy

According to the Centers for Disease Control (CDC), 34.9 percent of adults in the United States are obese. Simultaneously, a 2015 report by Stephens, a financial services firm, about the rise of high-end, boutique health clubs such as Pure Barre and Orangetheory Fitness—both of which have presences in Las Vegas—estimates the size of the domestic health club market at $22.4 billion. These new entries into the Las Vegas market are competing for customers with the long-standing Las Vegas Athletic Club, with its numerous locations throughout the valley, and high-end players Lifetime Athletic and David Barton Gym.

On their face, the CDC statistics and the Stephens report seem in conflict with one another. A national obesity rate of nearly 35 percent—which does not even include those merely classified as “overweight”—initially seems at odds with a robust and growing fitness sector. Spending time in and around the fitness industry, though, reveals that it is not immune from the broader socioeconomic trends facing the United States.

As with economic opportunity, health and fitness within the United States appears to be amid a great bifurcation. Part of a common narrative dating back to the Occupy Wall Street movement, a widening chasm of fitness is emerging between the haves and the have-nots.

Those who have the ability to prioritize their health, or who allocate their assets to make it a priority, have created a health and fitness market that operates much like any other luxury market. Gyms, personal trainers, supplement companies, and even some doctors, are no longer merely providing a fungible service, but are giving customers an experience. Consumers are not merely purchasing a gym membership or a product, but an entire lifestyle.

The Rise of The High-End Gym

 Historically, physical fitness was a requirement of the intelligentsia and rulers of any society, rather than just for the warrior class. As Socrates said: “No man has the right to be an amateur in the matter of physical training. It is a shame for a man to grow old without seeing the beauty and strength of which his body is capable.”  This wisdom echoes through the ages: Renowned Japanese author and nationalist Yukio Mishima wrote passionately about the impact weight training had on his life in his autobiographical essay, Sun and Steel. And Henry Rollins, singer for the notorious punk band Black Flag, echoed Mishima in his own revealing story of how lifting weights transformed his life, “Iron and the Soul,” in Details magazine in 1994.

While the explosion of high-end gyms over the last 16 years has been unique, professionals have long been concerned about health, vitality, and appearances. Dr. Gordon Patzer’s 2008 book, Looks: Why They Matter More Than You Ever Imagined, summarizes extant research about the tremendous importance physical appearances have in the workplace, including for legal  professionals. An entire chapter of Patzer’s book, titled “Rendering Judgment: How Looks Affect Courtroom Results,” is dedicated to the importance of the attractiveness of attorneys, parties, and even jurors, on the judicial process. It is little wonder, then, why service professionals including doctors, lawyers, salespeople, and others sought out facilities that would suit their needs.

As fitness research became more widely available on the Internet, fitness myths of the 1980s and 1990s—epitomized by “low fat” foods and Olestra—yielded to a collective realization that there was no substitute for lifting weights. The fitness industry rose to meet these demands in numerous forms, from exclusive weight rooms to organized classes. The result is a mix of strategies that shows no signs of stopping.

Among traditional gyms that have sought a higher image, Las Vegas’ City Athletic Club has been a locally owned and operated participant since 2011. Its owner, Jea Jung, the son of a world-renowned Tae Kwon Do instructor and himself a former bodybuilder, brought his lifetime of experience in the fitness industry to open his gym in Las Vegas. (In addition to owning City Athletic Club, Jung’s commitment to fitness also led him to create J-Bells, an alternative to dumbbells for free weight use.)

Jung believes that Las Vegas is something of an anomaly to the national fitness market. As a bodybuilder with a background in the fitness industry, Jung has been able to operate a premium gym in Las Vegas in a manner that would be impossible in other cities. His years in the fitness industry gave him a level-eyed realism in confronting this market: Rather than operating a volume-oriented, 10-dollar-per-month gym, he set his sights at the top of the market while being realistic about what doing so requires. In an era where some gyms seek to lower prices to compete with inexpensive gyms, Jung searches for ways to take his facility to the next level, without the capital backing of a national brand such as Lifetime Athletic or Equinox.

In addition to people who can freely spend the funds needed for a gym membership, Jung is acquainted with a different consumer base: those who will spend their last dollar for fitness.  While the affluent may focus on experience, those who make serious sacrifices for their fitness also want the best return on their investment. In Jung’s view, both priorities contribute to demand outstripping the supply of quality fitness facilities, allowing the prices to increase upward. As in other fields including law, and as documented in Robert Cialdini’s book Influence: The Psychology of Persuasion, high prices are a boon to marketing an in-demand service. For gyms, high rates may feed into another source of demand for their services.

Jung sees a pervasive effect of social media, particularly Instagram, in creating the demand for high-end gyms. Bragging rights, such as the ability to claim membership at a certain gym, checking in to it on Facebook, or posting photos taken there on Instagram, become more important than the gym itself. Like other luxury products, the gym experience becomes a source of ego fulfillment and validation; working out is secondary to the esteem and self-worth that members obtain from informing others of where they are, and where they belong. While the laws of supply and demand inform price, the culture of vanity—accelerated by social media’s ubiquity—plays an outsize role in driving demand.

Departing from the traditional gym setting, other forms of fitness training have gained popularity in the last decade. One of the most prominent examples of alternative fitness (and most explosively popular) is CrossFit—the trade name for a series of demanding group workouts that include free weights, bodyweight, and cardiovascular elements that change daily. According to Forbes, there were more than 11,000 officially licensed CrossFit gyms in 2015. In 2005, there were only 13.

Some gyms, including City Athletic Club, have CrossFit components to their facilities. CrossFit gyms more commonly stand alone due to the equipment and space needed, which differs from typical gyms and often includes gymnastic rings and open areas to perform lunges, farmers walks, and the dreaded burpees. The official CrossFit website indicates that there are 37 licensed CrossFit gyms in the Las Vegas and Henderson area as of July 2016.

The CrossFit experience is premium, and carries a premium price tag. At Freestyle CrossFit in Downtown Las Vegas, regular monthly memberships start at $120, and can go up to $160.  In Southwest Las Vegas, CrossFit Mountains Edge has similar pricing, running from $135 to $170 per month.

While CrossFit has been controversial in some circles, whether for reasons of cost or the debilitating injuries it can inflict on its adherents, others see CrossFit’s aggressive pricing as a desirable feature. In a 2015 entry on Philly Law Blog, Philadelphia attorney A. Jordan Rushie took issue with the view that CrossFit is too expensive. “[Y]ou’re hanging around other people who make enough money to spend it on a gym that costs $150 per month. Not $10 per month.  Who do you think will make better clients? Who do you think will have better referrals?”  Beyond camaraderie, the networking opportunities provided by treating fitness as a luxury pay for themselves. The costs of fitness do not end in the gym, though; instead, they merely begin there.

 Supplementing the Labor

It is increasingly rare to find anyone whose fitness regimen begins and ends at the gym. Reliable numbers on what percentage of gym-goers use supplements, ranging from vitamins and minerals to protein shakes to pre- and post-workout products, are hard to find. Still, there is no absence of evidence of the tandem rise of gyms and the supplement industry. Many nutrition and supplement stores in Las Vegas, such as Nutrition Rush, are located nearby if not adjacent to gyms. Lifetime Athletic and City Athletic Club both have supplement stores and health bars within the gym itself. Even without direct, causal data, the supplement industry’s size and growth closely tracks that of gyms and health clubs in the recent past.

Because the supplement industry largely is self-regulated—the FDA’s hands-off approach to nutritional supplements standing in stark contrast to its treatment of prescription drugs—there is little publicly available or verifiable information. On the low end, TABS Group estimated that the domestic supplement industry was worth $11.8 billion in 2015.  Nutrition Business Journal hotly disputed the TABS Group valuation and estimated the United States’ industry’s size at $36.7 billion.

Consulting firm McKinsey & Company estimated in a 2013 report the global supplement market was worth $82 billion.  The McKinsey report further indicated that sales increased by $6 billion in the United States alone from 2007-2012. Known transactions support an 11-figure valuation for the domestic supplement industry. In 2008, international nutritional ingredients group Glanbia Nutritionals acquired Optimum Nutrition, a trusted supplier of protein products, for $315 million.  Glanbia also owns one of Optimum’s erstwhile competitors, Bio-Engineered Supplements and Nutrition, also known as BSN.

The Internet has been a leading force in both selling and disseminating information about supplements. As noted in the McKinsey report and Nutrition Business Journal’s valuation of the supplement industry, Internet sales of supplements have growth significantly over the past 10 years and contribute a significant chunk of the industry’s size. From established retailers such as Amazon, to start-up sellers such as Vitacost, iHerb, and Lockout Supplements, numerous channels are available for purchasing supplements discreetly.

Knowing what supplements are needed is a precursor to buying them, even over the Internet.  In recent years, websites and e-books have risen to fill this gap. Established in 2011, Examine.com has grown into an easy-to-navigate and stunningly deep source of supplement information.  Containing more than 50,000 citations to scientific research, Examine evaluates the claims associated with various supplements, vitamins and minerals.  Prior to buying, users can assess things such as whether magnesium actually increases aerobic exercise performance (it does), or if ashwagandha reduces anxiety and cortisol, the stress hormone (it does). Despite the website’s enormity, it is far from the only source of information about supplementation.

P.D. Mangan overcame chronic fatigue by teaching himself about nutrition and supplementation.  Today, at age 61, he regularly lifts weights, has a formidable physique, and maintains the website Rogue Health and Fitness where he posts regular articles about his health research. He also has published books including Stop the Clock, about anti-aging techniques; Best Supplements for Men’s Strength, Health, and Virility; and most recently, Dumping Iron—warning about the underreported cognitive and physical problems caused by excessive iron in the body.

As a result of his books and online writing, men and women reach out to Mangan to further discuss their conditions.  In an e-mail, Mangan estimated that approximately 90 percent of the people who contact him were male with “decent” middle- to upper-middle class income.  Observing that people interested in health have above-average income, Mangan’s readers are also brighter and more intellectually curious than average in order to work through his scientific books and their technical language.

While Jea Jung anticipates that people who use supplements spend approximately $200 per months on them, Mangan’s number is more conservative, at $30 to $50 dollars per month. Jay Campbell, a fitness athlete and former Las Vegas resident, estimates that affluent supplement buyers may spend up to $300.  Personally, Campbell focuses on getting the highest return on what he ingests, and his monthly supplement spend comes in at under $150.  When it comes to supplements, Mangan’s belief is that the more expensive a supplement is, the less necessary it is.  For weightlifters, Mangan expects the staples of protein powder, creatine, zinc and magnesium to be affordable.  As Mangan noted, though, name-brand products are more expensive, likely contributing to the discrepancy between his monthly budget and Jung’s.

Mangan sees huge potential growth in the supplement industry as more anti-aging research is completed and publicized. With an undertone of optimism, Mangan notes that men want good physiques, and are coming to understand that obtaining one is within their reach. While he believes that the past few decades of health advice have been nearly unfounded, including low-fat and high-carb diets, and vegetarianism, Mangan is confident that people are finally seeing that supplements work and are worth the expense.

Dr. Brett Osborn affirms much of this information in his 2014 book Get Serious. Osborn, a Florida-based neurosurgeon, provides guidance about weight lifting, diet, and supplementation in Get Serious.  Chapter 8 of the book is dedicated entirely to supplementation. While Osborn makes it clear that his writings are not medical advice, and readers should confer with a doctor before taking any supplements, he provides his opinion about the most effective supplements on the market.

Appearing shirtless on the front cover of Get Serious, Osborn’s appearance is a testament to his recommendations. A number of entries in Osborn’s book and Mangan’s recommended supplement list overlap, including vitamin D3, magnesium, and omega-3 fatty acids.  Supplements alone cannot build a physique, but they can make it easier to obtain. Moreover, they can improve mood, cognition, and stamina, which even an improved appearance is not guaranteed to do.

In addition to complementing a rigorous workout routine, dietary supplements also undo the effects of the modern diet and pharmaceutical industry. Both Jung and Osborn lay significant blame for the poor state of national health at the feet of the pharmaceutical industry. As Osborn wrote in Get Serious, “[C]ompanies like Pfizer and Merck thrive on the treatment of illness.  There is money in disease, not health.  Due to this, supplement manufacturers have been vilified and touted as the mortal enemy threatening to rob the gravy train. And that’s exactly what it is.”

 Even as the supplement industry gains credibility based on published research, supplements alone may not be enough to overcome the effects of pharmacology, whether directly ingested or absorbed through the environment. Academic research has documented the adverse effects of residual hormone mimickers from birth control, as well as diabetes medication, on wildlife in the Great Lakes. As a result, it may be impossible for some people to reach optimal health only through supplementation. Additional measures may be needed to obtain an ideal hormonal balance, and today they are more widely available than ever before.

The Hormone Replacement Therapy Explosion

Juan Ponce de León spent the early 1500s, right up until his death, searching pre-colonial Florida for the fountain of youth. Taking ships and many men with him, he scoured the undeveloped new world in search of a cure for aging. Today, we know that this remedy can be found inside of a hypodermic needle. What’s more, it is increasingly available to those who qualify.  Like many leading-edge fitness and health trends, though, hormone replacement therapy is not cheap, and requires a patient’s dedication to such a regimen.

For years, testosterone replacement therapy advertisements have filled Las Vegas’ billboards and airwaves. Speaking mostly in euphemism, they identify the key symptoms of low testosterone: lack of energy, virility, and stamina. These concerns understate the full range of functions affected by testosterone, though: Proper testosterone levels improve mental clarity and sharpness, fat loss, confidence, and even mood.

Jay Campbell’s passion for health and fitness led him to literally write the book on testosterone replacement therapy in his early 40s. In 2015, Campbell released The Definitive Testosterone Replacement Therapy Manual. Today it is the No. 1 book about testosterone replacement therapy of all time. In his book, Campbell covers the extreme basics of testosterone, such as what it is and its naturally occurring benefits, to debunking junk studies on the risks of testosterone, the ethical objections to testosterone replacement therapy, and the reality of andropause—a “male menopause” where the body’s testosterone production drops off precipitously. Campbell goes on to discuss the forms of available testosterone therapy, from patches and creams to injectables, and possible regimens for doctors to prescribe.

For an optimum protocol, Campbell observes that injections of testosterone propionate every other day, or the longer-acting testosterone cypionate every three to seven days, yield the best results for most users. He is also forthright about the additional care any testosterone replacement therapy will require. While testosterone replacement therapy is not a reliable form of male birth control, it can negatively affect users’ fertility. As a result, some men using testosterone therapy may wish to use HCG to avoid fertility complications and as thus see all of their sex hormone levels skyrocket, including estradiol, a form of estrogen. Estradiol inhibitors such as anastrozole, commonly sold under the name Arimidex and used to treat some forms of breast cancer, then enter the equation to ensure the proper ratio of testosterone to estrogen. These considerations come before accounting for how testosterone may increase users’ hematocrit, a measure of the blood’s thickness, and require monthly blood donations to maintain it at a healthy level.

Striking this balance takes considerable investments, time and money. Patience, comfort with needles, regular blood work, and a prescribing physician who is well-versed in this increasingly popular area of medicine are all necessities. As one would expect, demand for medical professionals with deep, substantive knowledge in this area far outstrips supply, and their services are priced accordingly.

Deeply familiar with the national testosterone replacement therapy market, Campbell estimates that the cost of doing a regimen the right way costs $250 to nearly $400 per month. In his view, the benefits are so profound that the cost is more than justified. Not merely an expense, testosterone replacement therapy is an investment in one’s future. As testosterone levels fall, those who maintain normal levels will prosper over those who succumb to the decline of aging under the pressures of the standard American diet and pharmaceutical industry.

In The Definitive Testosterone Replacement Therapy Manual, and later in an e-mail, Campbell expressed his belief that the world was in the throes of a testosterone-deficiency crisis.  Even mainstream medicine has recognized a generational decline in testosterone within the United States. A 2007 study published in the Journal of Clinical Endocrinology and Metabolism observed an age-independent decline in total testosterone from 1987 through 2004 among 1,532 men. In short, testosterone levels were not falling just because the test subjects aged; for reasons unknown to the researchers, median testosterone levels declined almost 20 percent in fewer than 20 years among the randomly selected test subjects.

In Campbell’s view, both men and physicians are unaware of these changes and their implications. Because of the benefits normal testosterone levels provide, Campbell is enthusiastic about informing men about the benefits of testosterone replacement therapy, and helping them overcome their self-doubt and moral quandaries regarding the treatment. Even with the costs, initial blood work, and lifetime commitment that a successful testosterone replacement regimen requires, Campbell strongly believes it is most men’s best bet for achieving their potential.

While men have received much of the attention of hormone replacement therapy, there is a burgeoning market for women’s hormone replacement therapy. Campbell’s wife, Monica Diaz, is a Southern California real estate agent and also a fitness advocate. Beginning in early 2016, Diaz began turning her attention to the market for female hormone replacement therapy. In addition to creating an advice group dedicated to the topic, she presented an hour-long group discussion on YouTube and her blog with Campbell, Fabulously Fit Over 40, going into detail about the tests needed for female hormone therapy, what kinds of hormones are recommended, and who should consider if it is right for them.

In Campbell’s observations, the potential and actual markets for women’s hormone replacement therapy far surpass those for men. One of the reasons for this observation is that women can begin some form of hormone replacement therapy around age 30, while men normally must wait longer toward their 40s for their testosterone levels to drop enough to warrant medical intervention. Another reason for the women’s market size is the fact that insurance companies, better versed in the realities of menopause and other aging issues facing women, will pay for many forms of women’s hormone replacement therapy. In contrast, testosterone replacement therapy normally is an all-cash affair. Even for women who pay cash for their hormone replacement therapy, Campbell’s work with Diaz reveals that those seeking this therapy are what Campbell describes as “women of means,” generally earning $75,000 per year or more.

For both sexes, there is a final option to wind back the clock of time: human growth hormone, or HGH. While other hormone-replacement regimens can be done for a few hundred dollars per month, HGH—the pinnacle of hormone replacement—is markedly more expensive, whether with a prescription or through the black market. Yet, its effects over a range of uses, from cosmetic needs to injury recovery, make it very attractive.

HGH’s potency as a hormone-replacement therapy has earned it a lucrative position in the black market. Often prescribed to HIV patients to prevent “wasting,” pharmaceutical-grade human growth hormone can be obtained on the black market—a trend that ESPN first observed in December 2004, noted in the article “Fountain of Youth in a Bottle.” Despite significant crackdowns on black-market distribution of HGH and other HIV/AIDS medications, as reported by Community Access National Network in March 2014, the practice continues today.

By 2012, HGH had escaped from the fitness underground. In an article titled “Hollywood’s Vial Bodies,” Vanity Fair detailed the pervasive use of HGH among Hollywood celebrities and studio executives—largely under condition of anonymity—to recapture younger looks and lost energy.  HGH was confirmed to not just be for bodybuilders, but for women in the Hollywood social scene as well who cited improvements to their skin and hair as treatment benefits. These benefits came at a price, as a year of HGH treatment cost more than $10,000.

Despite its high cost, the present day is a relative golden age for HGH. Prior to the FDA’s approval of recombinant, or synthetic, HGH in 1985, the hormone had to be removed from cadavers in minute quantities; obtaining usable quantities of the hormone was equally costly and disturbing. With its new, relative availability, the market for HGH has grown, with healthcare providers acting to feed demand.

One of the foremost providers of hormone therapy in Las Vegas is Cenegenics. For years, the company has been promoted by the distinctive image of Dr. Life, a physician in his 60s who had the physique of an amateur bodybuilder. On its website, Cenegenics offers men monthly shipments of prescribed hormones and supplements. While Cenegenics does not readily disclose its pricing schedule, other online reviews of the company indicate that its hormone replacement therapy and supplement regimen—including HGH, if prescribed—costs hundreds and potentially even thousands of dollars each month.

At a price tag in excess of $1,000 to $2,000, each month, HGH is unequivocally a luxury good.  Components of the fitness market may perform like luxury products because of the resources devotees are willing to commit to their passion. The same is true for other products that attract their own fanatics, as BMW devotees pay tens of thousands of dollars for their cars, and modular synthesizer collectors pay thousands of dollars a year for new modules. For an elective, recurring monthly payment of $1,000 to $2,000 per month, there is little question as to HGH’s position as a luxury good…however it is obtained.

Future Trends

Professionals, and particularly lawyers, are increasingly aware of the mind-body connection.  Kenneth White, partner at the Los Angeles-based Brown White & Osborn LLP, wrote about how he overcame his own skepticism of a body-focused approach to mood after reading Why Zebras Don’t Get Ulcers in a May, 2015 post on the blog Popehat. “Before I had been very skeptical of any body-focus as sort of crystal-thumping woo. But not surprisingly, there’s actual science to the concept that our bodies impact our minds.” For lawyers, a group that suffers from mental health and addiction issues at rates that far outstrip the general public, the importance of understanding the mind-body connection is even greater. Professionals have the benefit of affording the means to experiment with and improve their health.

As the science about health and longevity becomes more widely publicized and accepted, the mass affluent will continue to demand an experience from fitness and supplement companies that is congruent with the rest of their lives. Hormone replacement therapy, which Jay Campbell’s book notes is a deeply private and anxiety-inducing issue for men, seems like a natural complement to the rise of “concierge medicine,” essentially a re-branding of the old house call.  As seen in the growth of these industries, demand has increased with awareness, and has led to innovations in delivery.

There are still many things beyond the scope of this article that support its proposition that health is now a luxury product. The increased demand for organic food has led to the growth of specialty grocers like Whole Foods, and has made traditional chains increase their organic produce offerings. There are also the subcultures of juicing and blending, which reduce fruits and vegetables to liquid form, and the unlikely schism between both groups’ adherents. Whether in pursuit of youth or the strength needed to be a more formidable adversary—fulfilling the age-old edict that the weak should fear the strong—the demand for high-end products and services in the fitness and health industry will continue its stratification as a luxury market.

1. Malcolm (“Jay”) DeVoy is the owner of DeVoy Law P.C. DeVoy focuses on providing representation in commercial disputes, serious personal matters, and advising medical professionals and practices about issues including HIPAA, Stark Law, and the Anti-Kickback Statute.