Innovation is the Key for Fitness Businesses’ Survival

The fitness industry has always rolled with the punches. When big box gyms and health club chains muscled their way into the fitness market, it seemed like every second independent gym were fearing closing their doors in response. However, the industry fought back and delivered a new concept to satisfy the crowd who wanted less of the ‘big’ and more in the way of a specialised service. Boutique studios mushroomed, filling the gaps and offering a one-format class model. Yoga, Pilates, barre, cycle, boxing, CrossFit, personal training, flexibility/stretch, wearable fitness, you name it – there was something for everyone.

During the past decade, another curveball blindsided the industry – the budget 24/7 gyms. Accessible and affordable, these centres that represent the high volume, low cost side of the market, greatly boosted the expansion of the fitness industry. The rapid expansion of 24/7 giants Anytime Fitness, Jetts, Snap Fitness 24/7 and Plus Fitness peaked a few years ago, but their presence prompted big box gyms to rethink their own business strategies and introduce 24/7 access at their own facilities.

Until COVID-19 rattled the world causing lockdowns and loss of business, every type of fitness business had managed to find their place in the market. Although presently, Victorian gyms are struggling through a second lockdown, overall the Australian fitness industry is looking to a brighter future.

Cofounder and Event Director at Business of Fitness, Shaun Krenz believes that as an outcome of this pandemic, health and wellness will become a top priority for everyone. “For health club operators, 2020 has been hard and I have certainly felt this in my discussions of late, but the long-term future is exciting,” he says. “The most valuable currency is, in fact, health and how we feel.”

When South Australian gyms reopened, Ben Barge, Cluster Fitness Director (South Australia) and National Support for Goodlife Health Clubs, says that people began re-evaluating what was important to them. “With people not being able to go out and exercise at a gym or a park – six, seven kilometres away, it caused them to realise how important their health really is.”

As Western Australia eased restrictions in mid-May, Business Partnership Manager WA for Les Mills Asia Pacific, Lee Smith says that with physical distancing in place, fitness businesses have seen close to, if not a return to, pre-COVID numbers in the group fitness space, with generally strong membership numbers too. 

“Group fitness has been shining through in many gyms, as small groups were some of the first allowed activities. Gym goers, keen to get back to connect with people again, to feel the motivation of the music and a passionate instructor, happened quickly, and although the timetables were reduced along with class numbers, the classes were busy and that started the momentum.”

Barge believes the key to retaining members, both during and after the pandemic, is communication. “Your clients are used to talking to you on a regular basis, so even if they aren’t in a position to pay you for training right now, keep chatting with them. Because the way you treat your clients right now shows who you are as a PT. By making a five-minute phone call once a week to those clients means when they’re ready or able to come back to training, they’ll come back to you. Of course, equally important for managers, is to keep communicating with their team. We need to be supporting them, training them in things like Facebook Live or Zoom and leading by tackling things head on. It’s important that they, like our clients, feel supported and connected through this time.”

Snap Fitness has had such an increase in membership sign-ups; they are set to open 10 new clubs across the country before the year is out.

However, in the US, it’s a different story. In a recent ClubIntel report (‘The Peril Promise and Reality of the Pandemic for the Fitness Industry’), it mostly reads doom and gloom. Many brick-and-mortar-based gyms and fitness studios are shutting up shop, while sales of personal fitness equipment and technology have grown at record levels, along with subscriptions for online classes and streaming fitness services.

With several big gym chains or long-term clubs filing for bankruptcy or closing many of their clubs, the US fitness industry are forecasting a loss of US$350 million a month for the remainder of the year, equating to $8 billion for 2020.

CHANGING THE WAY GYMS AND FITNESS STUDIOS ROLL

ClubIntel reports that fitness businesses that are nimble, highly fluid, digitally savvy, and prepared to think and act differently are the ones that will survive and thrive. ClubIntel is suggesting to have a competitive edge post-COVID, and to “seamlessly blend digital workouts, digital group exercise, digital events and competitions, mobile portability, AI, and XR (mixed realities) with a modified version of their brick-and-mortar experience.”

With data showing that existing clubs and studios can expect between 65 and 85 per cent of their members to return at reopening, ClubIntel says, “the fitness facility of tomorrow will have a reconstructed value proposition that allows it to be profitable and sustainable with fewer members than before the pandemic.”

CEO of Australian Fitness Network and Australian Institute of Fitness, Steve Pettit says that the industry will never look the same. Like Krenz and Barge, he agrees that the imposed restrictions have been a reminder to us all of how important our mental and physical wellbeing is, and driving the fitness industry from strength to strength. Pettit believes that there will be an increase in people willing to invest in personal trainers, with trainers using contemporary methods to reach more people. Barge adds that the trainers who are quick to adapt to restrictions are the ones coming out on top, post-lockdown.

“Never before has there been such a high uptake of virtual fitness supported by a new wave of training options,” says Pettit. “Gyms and fitness studios that have a balanced approach between onsite workouts and virtual workouts will be best placed to find the right mix for their members.” 

Smith says, “COVID-19 has been the ultimate disruptor that has forced fitness businesses to look at how they operate, what they offer and even why they operate.” He has found that technology has been the big hitter here, on both a business operational level and a member level.