The End of Gyms?

We are all trying to guess what life will be like when society reopens from the coronavirus lockdowns. One area that I have been thinking about a lot is gyms.

Is the Business Model Now Broken?

I fear that a large percent of gyms are going to fail in the next year. And those that do survive are likely to be more expensive. I HOPE I AM WRONG.

Golds Gym has filed for bankruptcy this month, just weeks after they announced their plan for opening safely. From a 6-foot spacing and half-empty studios: Gold’s Gym CEO shares what locations will look like when they finally reopen:

…the company is currently printing branded markers to place on the floor to indicate where members should stand in order to be six feet apart from one another. Gold’s is also updating its code of conduct to ask members to agree to follow social distancing and wipe down machines after they are done using them.

How can any gym be profitable with members 6-feet apart?

As for trusting that patrons will sufficiently wipe down the equipment is wishful thinking. It is hard enough to stay focused on a workout in a shared environment. Now we need to fear that a rogue sweat droplet is going to infect someone in the gym. That’s a lot of pressure to put on paying members of a gym. And what gym could afford to hire an army of cleaners on staff every hour?

As for spacing, what about personal training? Gyms make money selling personal training packages. How can a trainer teach proper form from 6-feet away? I know someone that had to close her pilates studio permanently, not only because many of the customers no longer felt safe, but because she felt she couldn’t safely teach the movements while practicing social distancing.

Fitness, Fear, and Friction

Going to the gym has always been about tackling friction. The more friction one has, the less likely they will go to the gym. You could be tired, hungry, or hungover. The gym might be too far away. Your friend isn’t going. The class you wanted to attend was canceled. Parking might be a challenge. There are hundreds of points of friction to keep you at home.

Yet despite all this friction, many of us still go on a consistent basis. We value health, so we show up, even when we don’t always feel like going.

Now we will be wondering if our presence at the gym will lead to being infected or if we will unknowingly infect someone else. That’s serious friction. We may overcome this mindset with time. Will that be months or years? And can gyms survive that long in the meantime?

We might have to start scheduling when we attend the gym. More friction. What little socializing that was left in the gym is likely going to be gone now. One less reason to show up.

I don’t go to group fitness classes, but I can’t imagine these recovering for years – if ever. A closed room with lots of heavy breathing, sweat, and movement. How are gyms with these classes going to make their members feel safe? 6-feet apart on a beach I understand. In a closed room? Even if you were able to pull it off, how do the economics work with staffing and scheduling? There will be waves of canceled memberships.

Fitness Class

Photo by bruce mars

Remember saunas, steam rooms, and hot tubs? I can’t see them coming back for a long time. There goes another wave of cancelations. Hot yoga? Probably gone too.

Older members and those in high-risk groups are going to cancel in massive numbers. Sadly, exercise is what many of these people need to improve their health and reduce their risk status.

The Gym of the Future

Watch this 1-minute video for a preview of what gyms might look like in the near future.

Gyms Reopen With New Coronavirus Rules in Hong Kong

If you follow the link to YouTube, be sure to read the comments. Right or wrong, people have become germophobes. I’d like to think those leaving comments don’t represent gym customers, but this is a health story on Bloomberg. People that care about health and consume financial news are the most likely to appreciate risk.

New Habits

The biggest threat to gyms is likely going to be that we’ve all had a few months to figure out how to exercise at home. People are building home gyms and learning how to do bodyweight exercises. Peloton bikes are selling extremely well. People have discovered that YouTube has tons of fitness instruction including classes. And it is free.

The most loyal fitness gym attenders haven’t been sitting on the couch during the lockdown. They have been developing new habits. Why keep paying for a membership to the germ gym when you have a home gym now? More cancelations.

Last Call?

The more I think about the situation, the grimmer it looks for gyms. A massive loss in revenue from canceled memberships combined with higher costs from increased staffing and supply needs. If they raise membership prices to handle lost revenue and increased costs, how many of the budget members will then cancel?

40 million US workers have lost their jobs already and perhaps 42% of those jobs are not coming back. Those people will be less likely to renew their gym memberships.

Finally, what happens to a gym when a member gets sick or passes away from the virus? How many members cancel when they get the call they need to be tested? Will this friction prove to be too much? And if there is a 2nd wave, the industry is likely toast.

What are your thoughts? Am I being too concerned? Leave your prediction in the comments.

In Part 2, I will explore this topic some more as well as making my own decision on if I will be canceling my own gym membership.

The gyms I am referring to in this article are primarily the Glitter Gyms (LA Fitness, 24 Hour Fitness, Planet Fitness, etc). True High Intensity (Body By Science and Super Slow) will likely do well (see the 1st and 3rd comments below). I’ll go deeper on this point in Part 2.

20 Comments

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  1. I’m optimistic for gyms that can remain profitable training only one client, or a pair of clients (couples/BFFs) at a time. Gyms that employ a BBS model can affort to do this, and thoroughly clean everything piece of equipment between use.

    I own such a business, and even clients are already reaching out to resume because they know how much safer the studio is than even a trip to the grocery store.

  2. @MAS
    Great post. You hit a lot of good points.
    I think the only hope for gyms is the boutique model @Bryce describes above. Or if people’s attitudes revert back to pre-Covid ideas quicker than we suspect. after all, those folks at the bars in Wisconsin and the beaches of Florida last week did not seem too concerned. 🙂
    I was in Vegas in February, about three months ago, and could not have predicted the last two months of lock down at that time. So who knows, maybe in three more months everything will revert back quicker than we think?

  3. @Byrce – I totally agree. Considering the audience of this blog, I need to edit the post to specify the type of gym. This could be the moment for HIT/BBS/Super Slow to grow 10 or 50X. The selling point would be cleanliness not intensity.

    @Jim – The Wisconsin bars and Florida beaches are 2 different examples that I don’t think apply here. In Wisconsin you have overweight people that are almost certainly Vitamin-D deficient after a long winter and quarantine drinking alcohol shoulder-to-shoulder with others. (Fools from a risk perspective). In Florida, people are outside getting Vitamin D for free. (Probably a net positive, time will tell)

    Those that pay for indoor gym memberships don’t fall into either group. How people think about risk will have a regional component, which I will explore briefly in Part 2.

  4. Interesting post, MAS. Not to argue but I wonder whether the release from lockdown will yield a short term “New Year’s Resolution” effect. Regular gym goers have indeed adapted during quarantine but the non gym going public has likely gotten fatter and less healthy. Going to a gym once it’s supposedly “safe” may sound attractive. The gyms will benefit from those fees and it may give them a short lifeline.

    That said there’s no way in this world or the next I’d invest in a Glitter Gym or CrossFit box. True studio environments and Rust Gyms will probably make it though.

  5. @Geoff – I really hope you are right and gyms get a boost of cash from new members. Just after I posted this blog, I saw a news story on how 24 Hour Fitness and the YMCA will require reservations.

    https://www.khon2.com/coronavirus/many-gyms-will-require-reservations-when-they-reopen/

    “So what people will be able to do is use the 24HR Go App, make a reservation, come in for a one-hour time slot, and we are going to close the club and clean for 30 minutes, reopen for another 60-minute time slot,” said Tony Ueber, 24 Hour Fitness CEO.

    What percent of members have to agree to this in order for the gym to still be profitable? 80% 90%? I don’t think most gyms could afford to lose 20% of their members and then ramp up the cleaning all while keeping their existing staff.

  6. I live in Australia, with VERY low current levels of infection (under 1 case per million people per day and over one thousand tests per case) and I still wouldn’t go to a gym at the moment if I was literally paid to do so. Enclosed spaces, heavy breathing and respiratory disease do NOT go well together.
    I am on the more careful end of the spectrum, (hence I find fitness important) so I hope gyms can do without people like me because we are not coming back for a LONG time.

  7. There was a good Planet Mopney podcast on the economics of gyms from 2014 that is a good primer if people haven’t considered it before.
    https://www.npr.org/2019/06/12/731987365/episode-590-the-planet-money-workout?t=1590406934271

    I’m not trying to start a COVID WAS A HOAX MAN! style argument here but my initial thoughts are that we may be over-reacting to how the future will change (no lifts/elevators will ever be used again, everyone works a shift, etc) while in the midst of lockdowns, 24/7 media coverage and no vaccines.

    If gyms reopen, people will go back I think. And if those early re-adopters show no Covid problems, more people will re-join them (especially if offices reopen and public transport resumes normal working – all assuming that Covid dies down). The financial pressure may well make the govt advice to change from manadatory social distancing to “make your own mind up”.

    I may not be representative but I would happily risk going to a barber’s today if they were allowed to reopen – haven’t had a haircut for 10 weeks.

    The amount of space people typically have in London for home gyms is very limited. If Covid behaves like other novel viruses like SARS, MERS, bird/swine flu in the UK then it will swiftly be forgotten as we fixate on Meghan and Brexit again.

  8. While it is true that lockdown has inspired a wave of at-home exercising, a lot of that is in public parks and outdoor spaces. At least in the northern hemisphere, that is going to be a lot less appealing come November. Depending on the situation and advice, I think I’d be willing to take some health risks re: COVID to prevent others e.g. feeling sluggish and depressed. And there’s only so much running and HIIT I am willing to do in the driving rain and wind!

  9. @seantheaussie – I got a strong feeling there are a lot of people like yourself. People are already saying movie theaters are dead. I would think the air quality in a cinema would be far better and considering how cold they keep it, far less sweat.

    @Simon – I relistened to that Planet Money show after you posted the link. An interesting stat from the show is that gyms on a normal year lose 50% of their members. There was a WashingtonPost story yesterday on how to cancel or pause your gym memberships. This doesn’t look good for gyms.

    @Joanna – I am in the same position as you. The outdoors are not an option for 1/2 the year where I live.

  10. An excellent article. A couple of quick points:
    – Personal trainers will have to adapt and do most of their sessions in parks. That’s healthier overall anyway.
    – There will be a shift to more functional type movements, e.g. throwing medicine balls and tires
    – I have a friend who is a Pilates teacher. It’s been surprising how effective one-to-one sessions can be via video
    – One-to-one coaches and trainers will have to become as diligent about hygiene as dentists
    – I’m old enough to remember that before HIV-AIDS, many/most dentists used to put their *bare* fingers inside your mouth!

  11. It’s never too cold to exercise outdoors. People do it in places like Alaska in the winter. Yes, it might not be possible to wear only a tank top and spandex pants 356 days a year…

  12. @Simon Check out what Darryl Edwards the Fitness Explorer does in Central London:

    https://www.youtube.com/watch?v=uYFUjh1mWRg

  13. @Glenn – Personal trainers that relied on gyms to do their marketing and handle the business side will have to ramp up to become business people real fast. The gyms that were taking a cut for providing those services will lose a source of revenue. How large? I don’t know, but based on the last 3 gyms I’ve been to (Fitness 19, LA Fitness, 24 Hour Fitness) it is sizeable.

    As someone that doesn’t hire a trainer through the gym, I recognize that my membership fee is in part being subsidized by those that do. This goes back to my thought that when the dust settles, membership prices are likely to go up if membership drops.

    As for shifting to more functional movements like throwing tires, and med balls maybe 2% could be convinced. Both require space and aren’t easy to move around. If you assume the gyms hardest hit will be in urban dense areas, this will also be the area with the least amount of nearby outdoor space.

    Most people will not work out in the cold and rain. Myself included. Way too much friction. People will leave the gym for the reasons I cited in the post not because they plan to go Rocky 4 (Rocky’s workout, not the Russian).

    https://www.youtube.com/watch?v=CaagSfBj2To

  14. I agree with you. That’s why these heavily social media-enabled exercise machines like Peloton bicycles will become increasingly popular. And it won’t just be bikes that have a huge social component, but increasingly rowing machines, eliptical cross trainers, wall climbers, etc.

    I think you’re making some very valid, trenchant points about the loss of revenue/profit coming from gyms not getting a cut of the personal trainer fees…

  15. New York Times May 26, 2020 – Keeping Clients Fit During the Pandemic by Going Virtual
    What to do with a business that involves close physical contact with clients? Innovate and, if you’re lucky, grow — but at a distance.

    By JOHN HANC

  16. This might even be a time for old trends to resurface. Thinking specifically about activities like step aerobics ( remember the old workout vis tapes?), or even Heavyhands, which has a cardio and resistance exercise component.
    Check get yourself a cheap step bench and a couple of adjustable dumbbells with extra weight and your pretty much covered. During the winter months you could do a resistance workout one day and a step or Heavyhands session using step ups instead of walking around, and you are covered. Add a couple of well wrapped up walking sessions and you are golden. As the weather improves you can graduate to going outside more.
    Like you MAS I do wonder if the big budget places will survive. I see a return to smaller, privately owned gyms, and that might not be a bad thing. It would certainly slow down the proliferation of useless and bad fitness trends, and see less bad advice being spread via Instagram.

  17. @Stuart – Great article. Thanks for sharing.

    … you want to be sure that the area has good ventilation (ideally open windows and fans) and a low density of people so you can keep your distance from other exercisers. Also, stay out of the locker room, make sure that shared equipment is cleaned before and after use. Ask the gym about their procedures, and bring disinfectant wipes with you to thoroughly wipe down any surface before and after you touch it. Finally, don’t linger.

    This sucks.

  18. @Stuart – Would a weighted backpack be as good as HeavyHands? HH seem expensive.

  19. MAS,
    According to the Heavyhanders no, a back pack wouldn’t be as good. According to the Heavyhands mantra there seems to be something about lifting the weights as you move that raises the heart rate.
    I can’t see how it would be expensive. Most people using Heavyhands are only using hand weights of somewhere between one and ten pounds. A pair of cheap adjustable dumbbells should see you set up nicely.

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