Sara Lynn Baker by Sara Lynn Baker
on

The fitness industry was severely impacted by the COVID-19 pandemic. Some statistics show that gyms were closing at higher rates than almost any other industry.   Starting in March 2020, many gyms across the nation experienced the roller coaster of being completely closed, re-opening with limited capacity, closed again during surges, then re-opened again with overwhelming rules and regulations.  According to IHRSA, as of July 1, 2021, 22% of gyms and studios had permanently closed their doors.  This number is much likely higher now as the pandemic raged on through the end of 2021.   This equates to millions of job losses and billions of revenue loss.

Though these statistics are grim, the daily impact of COVID-19 has lessened, and many gyms have re-opened.  To understand the current state of the industry and emerging trends, ASF, a tech company that provides gym management software and Club OS, a sales, marketing, and member engagement solutions provider, surveyed over 200 club owners, operators, and other high-level club professionals to gauge where the industry is heading.  These insights are summarized below.

Virtual workouts remain popular, especially with many workplaces adapting hybrid schedules permanently. Yet, many people have returned to the gym.

Gym membership is primarily composed of the 36-50 age group (49.8%) with the 18-35 age group making up 29.6% of the membership base.  

The report showed that 27.4% of gyms are selling the same number memberships as before the pandemic and 22.9% are even selling more than before the pandemic.  

The fact that more people have not returned to the gym could be due to a combination of enjoying exercise outside the gym and the rising costs of gym membership. With the current state of the economy, inflation at an all-time high, and as operating costs continue to rise, 67.3% of gyms surveyed, had to increase the costs of their membership in the last year. 51.7% only had to increase the costs slightly but 15.6% increased their prices drastically.   Fortunately for some, 29.3% were able to keep their prices the same and 2.4% were even able to reduce their prices a bit.  

Gym owners not only face the challenge of recruiting new members but also retaining members. Member retention is a significant issue post-pandemic with almost half of the owner respondents reporting a slightly higher rate of membership cancellation than pre-pandemic.   The good news is that the report showed 43.3% of members keep their memberships for the same length as prior to the pandemic.

Communication with members is an important piece of recruiting new members, member retention and engagement.  Surprisingly, according to the report, social media has taken a slight back seat to texting as the primary and most effective way to communicate with members. Phone calls and emails showed to be the least effective.

As the world continues to be technology driven, a mobile app seems to be a must for many businesses. Parts of the fitness industry were slow to respond to the need for apps, but 61% of clubs surveyed now have a mobile app. Yet, when owners were asked about their members experience with the app, a lower rating was given, showing the need for improvement.  

To gain new members, referral programs remain strong.  With the increased use of social media ads, owners use these ads as a strong driver for lead generation.  However, word of mouth is still the key to growing memberships.

The above statistics were specific to gyms.  What about the overall state of the fitness industry?  

In another glimmer of hope for the fitness industry, 65.1% of those surveyed gave the state of the industry a rating of 5 or higher on a scale of 1-10 and many see more opportunity now than before.   

The industry still has some major challenges. The main concern, as for many businesses in the current economic climate, is cost and profitability.  New membership sales are also a concern. If feasible, adapting to the latest trends is one way to ideally increase profitability.  

Trends listed in the report include:

 These trends mirror some of the ACE predictions for 2022.

With all these statistics and the constantly changing landscape, what are the practical take-aways from this report?  

1.      Focus on member retention vs. always focusing on new members.  Loyal members often have a higher customer lifetime value. 

2.      Utilize text messaging for engagement and new leads.

3.      Invest in a quality mobile app.

4.       Make sure to have a referral program since word of mouth is still the best way to obtain new members.

5.      Integrate technology.

6.      Have quality social media content.

7.      Offer additional wellness services. 

 

Integrating all or a combination of these can help gyms and ideally the fitness industry as a whole to continue to thrive as we look ahead to 2023.

 

 

Resources:

 https://www.yelpeconomicaverage.com/business-closures-update-sep-2020.html

 https://www.ihrsa.org/improve-your-club/industry-news/how-many-gyms-survived-the-devastation-that-was-2020/

Get more and save more
with CEC Power Pass

CEC Power Pass gives you unlimited access to the
knowledge you need to be your best.

See How