Talking about adaptability and ever-changing business conditions, there is one trend to watch: the way in which the “at-home” fitness revolution is about to squeeze traditional gyms and even upmarket studios. One warning signal: Last year, SoulCycle (upmarket: It charges more than $20 per hour) withdrew its application to launch an IPO, citing market conditions. It hasn’t reinstated it yet, despite many wellness businesses successfully going public (for example, Beyond Meat).
Another sign: Town Sports International (which has been in business since 1973, operates about 200 gyms, and has more than 600,000 members) just warned of “negative membership trends.” Peloton seems to be getting it right with its offering of buying or leasing a bike and then doing the class in your own home via a video connection (meaning a trainer can reach thousands of customers at once). At the end of last year, it had $700 million in revenues and a valuation of more than $4 billion. My personal prediction: This is where the “real” fitness money is going to be made: at home. As companies such as Tonal and Mirror put it: “The future of fitness is at your place.”
2 thoughts on “Trend: Is At-Home Fitness Squeezing Gyms & Studios?”
This is a complex situation and it’s difficult to generalise or draw conclusions at the moment about the impact the home fitness market will have on the health club market.
Research shows that group exercise is very powerful as a retention tool, meaning people enjoy going to the gym to socialise and to be part of a group as well as getting access to expertise which they can’t do so easily at home.
With there being so many gyms now, large parts of the population of developed nations have a selection they can go to as a neighbourhood purchase (less than 20 mins travel time) and this is driving memberships.
Soul Cycle pulling its IPO is another matter – the Soul Cycle workout doesn’t suit everyone and there has been a reluctance to update it, leading to falling class numbers in some areas. The company is now rectifying this. This indicates that the change in IPO planning cannot be read as evidence that the home market is impacting the out of home gym market.
Similarly, as a mid-market operator, Town Sports International is being impacted by polarisaion in the market, with the very high end and the budget operators doing well and those in the middle being squeezed – again this relates more to the growth of boutiques and studios and high end clubs than it does to the home fitness market.
There is much evidence that the out of home gym market and the home market are becoming one seamless experience for consumers, who use both with increasing regularity.
We expect this trend to continue, supported by apps and other technology, which enables consumers to connect their workouts across home and gym and also – importantly – their place of work and where they take their vacations.
Many businesses working on the supply side of the industry, such as Les Mills and Technogym, have launched home-based services and products which they are offering to gyms as an upsell for members, keeping their trade customers onside and indicating a further blurring of the boundaries.
We expect a range of markets to continue to grow – gyms and health clubs, corporate health and wellbeing, home fitness and wellbeing, school wellbeing programmes (see the We Company school), sports-related fitness, obstacle races and mud runs, hotel fitness, charitable fitness, medical fitness and prevention, community sport and fitness and apps and wearables.
In the future people may actually not need to associate with other humans anymore .. at the moment however studios and gyms also have another role, they are places where humans interact… or at least have the chance to interact. In a world where isolation and loneliness are becoming ever more prevalent, especially as people age the opportunities to meet other people are getting less. I see these centres through that lens. How to monetize that like Peleton … crack that one and you’ll make a dime. One of the things that makes us human is our desire for relationship in all its forms with others.