Many fitness lovers asked with the outbreak so wide: “How can i Know gym or fitness center near me safe?” The concern is apt due to this pandemic’s nature, but like many other businesses, this made the gym industry suffer immense loss. The lockdown forced these institutes to shut down, and thus they couldn’t earn any revenues.
In mid-march, all gyms and fitness centers across the US shutdown due to the pandemic. Now, after almost half a year on pause, many gyms are preparing to reopen their doors. As told by one gym owner told the Wall Street Journal, “Instead of coming in at your wish, you need to make an appointment first to come, and the gym staff will all have to get themselves tested for the Covid-19 virus. Everybody who comes in will have to use hand sanitizer immediately. We’ll also take the temperature.”
New York state has made a long 35 pages of protocols for gym owners they will have to follow if they want to restart the business. But we are still not sure what the new normal will look like for gyms. Will members return to their old routines, or will the pandemic have a lasting impact on our workout habits? Simply put, how might the pandemic transform our fitness industry?
Covid-19 has upended the American fitness industry. ’24 Hours Fitness’ and ‘Gold’s gym’ filed for Chapter 11 bankruptcy after missing out on membership dues. The parent company of Lucile Robert’s gyms and New York Sports Club have also warned of potential defaults. Moody’s analyst Joanna Zeng O’Brien stated that the Covid-19 pandemic had created a severe shock to this industry to the operators. It is the industry that derives the majority of its revenue from monthly memberships. So, the gyms were forced to close in mid-march, and revenue stream had gone. There was zero revenue coming in, while owners still had massive lease obligations as well as the labor cost. All of a sudden, this caused the companies to go into severe stress.
Before the pandemic, many fitness chains borrowed to expand aggressively. Private equity firms have the insurers that cover a majority of them, and the private equity firms are smart money. They are attracted to this industry for two reasons:
- Recurring nature of the memberships: You have a very reliable steady stream of monthly revenue coming in.
- Long-term demographic shift: There is this long-term fundamental demographic shift, a focus on fitness and health.
As much as we think people go to gyms, but in terms of the percentage of people actually belonging to gym memberships is still in the low 20% for the US. There is still huge growth potential.
But the pandemic has changed the math. People are stuck with very expensive leases that worked in the old-time but doesn’t work in the new normal. One gym that has managed to spare itself from the worst of the pandemic is Planet Fitness. It is the biggest fitness chain in the country. Since they are a franchise system, they have many sophisticated franchisees and multi-store operators that have really helped the company. They have at least 10 to 25 plus stores in multiple states. They have already reopened in Florida.
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One of the small areas of development in the gym & fitness industry during the lockdown has been at-home classes. With gyms shutdown, many Americans scrambled to create their own at-home gyms leading to a shortage of equipment like rowing machines and kettlebells. The other part of the industry trend seen in the last few years is that the technology is really transforming this industry. It started with brands like Peleton. About a couple of years ago, they started providing at-home classes. You can purchase a Peleton bike and pay a monthly subscription of $40 that gives you access to exclusive on-demand as well as live classes.
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This pandemic with the lockdown initiatives, stay-at-home measures, remote working has accelerated at-home workout trends. People now understand that they can utilize this and learn how to exercise will blow your mind better. Meanwhile, gym owners are still committed to their business despite the challenges of the lockdown. The pandemic has taken a colossal toll on many business owners, emotionally and physically. Despite the downturn, the gym industry is till confident it will survive.