Analysis | Fitness Is Back, But How Long Will We Feel the Burn?

Covid-19 forced fitness centers around the world to close, as many members, who were used to working out in the gym two or three times a week, discovered the joys of Zoom yoga or bought a Peloton bike.

In Europe, fitness operators have also had to pay much more for their energy. This has prompted some to cut costs, such as the UK’s Nuffield Health, which closed all the hot tubs in its gyms.

Factor in financial pressure on consumers on both sides of the Atlantic, and that monthly gym membership looks ripe to be purged. Squeezed finances may be a more pressing issue than squeezed waistlines.

Pure Gym, Europe’s second-biggest fitness operator, said in November that it had seen the pace of recovery slow, with September and October weaker than expected. Meanwhile, rival The Gym Group Plc is becoming cautious: The UK-listed company expects to open up to 20 sites this year, down from 28 in 2022.

Still, there are grounds for optimism. Even if western markets do fall into recession this year, the fitness sector may be more resilient than after the 2008 financial crisis.

Since the omicron variant disrupted in-person workouts last January, demand has returned to normal seasonal levels. ClassPass, which provides access to gym and studio classes, saw global reservations rise 50% in January 2023, compared with December, in line with pre-pandemic patterns.

Gym usage has also rebounded strongly. In the week to Jan. 9, foot traffic to US fitness centers was 13.1% higher than in 2020, just prior to when Covid hit, according to Placer.ai, which tracks visits.

In Europe, most operators are experiencing membership very close to — or even at — pre-Covid levels. Fitness enthusiasts are also using facilities more often than they did before the outbreak.

It makes sense if you think about it. The pandemic put a greater emphasis on protecting health. David Lloyd found that 70% of people joining its clubs recently were doing so for mental health and wellbeing . And research by PwC has found that exercise was toward the bottom of the list of spending that UK consumers planned to cut.

WFH helps too. Although it has made life more challenging for city-center clubs, it has bolstered usage of suburban sites. Plus, a more flexible schedule affords more opportunity for exercise. David Lloyd, for example, has made a virtue of its spacious clubs close to where people live, offering places to work as well as work-out.

While some people will inevitably be forced to give up their monthly membership, many wavering gym-goers have already gone. In the UK, about 1 million so-called “sleepers,” who pay for facilities but never use them, disappeared during the pandemic, according to David Minton, founder of the Leisure Database Company.

Those who remain are committed members. And their business will be shared among fewer gyms — those that survived the past three years.

Yet even against this backdrop, the budget sector, led by the US’s Planet Fitness Inc., looks best-placed. Low monthly payments, typically under £25 ($31) in Europe, are more manageable for consumers. Such an offering could attract people trading down from premium gyms. Add in lower running costs — these facilities rarely have pools — and they look most resilient to weather the economic storm.

It’s a similar picture at the high-end. As luxury behemoth LVMH Moet Hennessy Louis Vuitton SE noted, the rich are living in a separate economic world. That means their fitness regimens are protected too. Expect Equinox and the UK’s Third Space to outperform.

Life looks tougher for the mid-market players, with higher membership fees and running costs, although more premium US operator Life Time Group Holdings Inc. said recently that fourth-quarter results would be better than expected.

With the industry returning to its normal seasonal pattern, the next few months will be crucial in determining just how robust the post-pandemic recovery turns out to be.

But right now, gyms can hope for a lasting commitment to healthy living rather than a post-holiday fitness fad.

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This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Andrea Felsted is a Bloomberg Opinion columnist covering consumer goods and the retail industry. Previously, she was a reporter for the Financial Times.

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