A Must-Read for Middle-Market Fitness Businesses
We often talk about the booming fitness industry. However, not all gyms and studios are reaping the spoils. In fact, one type of fitness business, in particular, is struggling, according to a recent analysis by Bloomberg: middle-market clubs. Here’s a closer look at what all fitness business owners should know about this phenomenon.
Boom or Bust?
The global fitness industry revenue for 2019 skyrocketed to $94 billion in 2019, according to the IHRSA Global Report. By the year 2030, meanwhile, health clubs are expected to lay claim to a staggering 230 million members.
But all health clubs aren’t created equal. Nor are all having the same experience in today’s fitness-friendly landscape. Taking on debt despite the uptick in interest? Middle-tier operators which “don’t have the same price advantage of a low-cost gym or the competitive advantage of a boutique fitness option,” according to S&P Global Ratings’ Emile Courtney.
Stuck in the Middle
Upscale and boutique gyms typically cater to clients with enough money to continue to pay for memberships even when the economy takes a dip. They also appeal to today’s fitness enthusiasts in a unique way. “Personalization and tribalism are fueling the boutique demand, especially among millennials. Most people want to be with ‘their people,’ the people like them who have the same passions. Boutiques deliver on that,” says Meredith Poppler of the International Health, Racquet & Sportsclub Association. Budget clubs, meanwhile, may fly under the radar for households looking to cut costs.
Caught in the middle and struggling with debt problems? Middle-market gym chains, which often find themselves vexed by costly membership cancellations: More than a quarter of US gym members are expected to cancel their memberships in 2020. Considering that it costs half as much to retain an existing member as it does to recruit a new one, the member retention imperative is clear.
An Optimistic Outlook
Still, despite the challenges facing them, fitness business owners are optimistic — especially those willing to adapt and evolve. 24 Hour Fitness CEO Tony Ueber told Bloomberg, “We see a tremendous opportunity in the mid-tier that hasn’t yet been realized. As a result, we are in the process of transforming our business model and making the necessary investments to firmly establish a leadership position in the industry.”
Additionally, focusing on building strong brand awareness and customer loyalty can help fitness businesses stay ahead of the curve. To that end, Bloomberg also checked in with current fitness business members to understand their wants and needs. A common theme? Community and belonging. Said one fitness enthusiast who participates in streaming classes without ever setting foot in a gym, “To be able to feel like you’re a part of something that feels bigger than small-time America is great for so many people. It feels bigger than a little fitness world.”
Speaking of giving members what they want while also keeping them connected, wearables continue to be a top fitness industry trend. Download the AccuroFit System catalog today to learn more about how Accuro’s fitness monitoring technology can support fitness business member recruitment and retention.
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