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What will the fitness industry look like post lockdown?

3rd February 2021

What will the fitness industry look like post lockdown?

The 3rd lockdown announced by Boris Johnson at the beginning of January was bad news for gyms. The effect was to shut down overnight 7,239 gyms in the UK. Around two-thirds of these gyms are run private operators. Collectively over 4.5 million Brits had gym memberships before the first lock down.

Gyms are worried, some have huge debts like Puregym for example who have over a £760 million debt pile. And its not the only gyms who will suffer as members continue to cancel their memberships. Smaller studios need over 50% occupancy just to break even. That's not likely to happen anytime soon. We maybe looking at April – May, before the current lock down ends or is partially lifted. With mutations in the virus, this could extend the lockdown period even further depending on how successful the vaccines are when facing multiple versions of the virus.

The impact of these measures is that we can expect to see post-lockdown studios, gyms and leisure centres looking to significantly reduce the number of in person classes on offer, and the number of people allowed to attend a classes will be reduced, expect some venues to close permanently.

This will have a major impact on the availability of fitness classes and jobs in the fitness industry.

It is estimated that before the first lockdown, there were 62,000 fitness instructors of which 16,000 were employed full time. In 2021 we may see the number of full time employed instructors dramatically fall, and the total number of people with a stated occupation in the sports and fitness sector in the UK (89,000), to drop significantly.

Before lockdown, the fitness sector a very competitive but growing annually at around 6% a year, post lockdown it will see a massive shake down, with reduced numbers of venues, fewer classes, reduced numbers and a growth of virtual online activities and video on demand.

Will consumer attitudes to Gyms and Leisure centers change in 2021?

The simple answer is no-one knows exactly what the new fitness world will look like. However, what we do know is that there are significant changes happening now.

After lockdown many people will flock back to gyms, and leisure centres. However, with many gyms permanently closed the habit of going to the gym has already been lost. Many have found better value activities, online, with more flexible services like the NearYou a Pay as You Go service and NearYou fitness video.

What will effect Venue based Gyms and leisure centers?

The Lockdown has essentially accelerated growing trends in the fitness market which was pre-lockdown very competitive, in some cases was over supplied, suffered from quality issues, online access and the ability to reserve online.

The fitness market prior to lockdown was slow, even reluctant to adopt online bookings, online classes, and on demand videos. The lockdown changed that for good.

Flexible fitness, non-committal fitness subscriptions, is a fast-growing trend that taps into the growing on-demand preferences of consumers, particularly millennials.

According to Elizabeth Edwards, founder and general partner of H Venture Partners “She cited market research which found that while health club members have returned to those facilities or will once it becomes safe again, younger Americans are enjoying exercising at home and plan to continue.”

Gym goers may drop-in and pay per class or visit studios without the long-term commitment, allowing them to better meet their individualized workout needs or simply book a class on NearYou.

Loyalty of members has also taken a hit, research shows that gyms and leisure centres came out badly in how they dealt with their customers during the lockdowns. Some even took their customers to court if they stopped their monthly direct debits. Even gyms and studios who extended free memberships came a cropper as lockdown was lifted and then re-introduced causing financial havoc for studios and clubs. Some memberships were frozen, but that is not much good if the gym fails to re-open. Feedback is that gyms, studios or clubs who were unable to offer a good service lost up to 80% of their valuable customers forever according the the FT! And they are unlikely to return.

Outdoors activities such as cycling and running have grown dramatically during the lock down. Halfords a UK company has seen the sale of bicycles surge by 57% during lock down. Once the weather gets better expect to see more people getting on their bikes rather than sweating it out in the gym.

Walking and hiking have also seen a boost. Sales of outdoor clothing and footwear have mushroomed during lockdown. Main beneficiaries were Argos, SportsDirect, Amazon and Nike according to Statista 2020. The impact of this trend will also affect Gyms and Leisure Centers, as people resort to running, exercising and outdoors.

At home fitness is here to stay due to Improved internet connectivity and streaming capabilities have contributed to the rise of at-home workouts. The rise of intelligent fitness system combines software, and interactive personal trainers who coach you through workouts via on demand videos or livestreams.

Tech-enabled at-home fitness offers personalization, convenience and access to first-class instructors with an increasing number of people finding that this justifies investing in home fitness equipment.

Fitness Apps and in app fitness class purchases will grow. In January this year Apple has launched its own Fitness App to take advantage of the fitness at home trend.

The Financial impact on gyms

With incomes battered by the lockdown, people have closed their gym memberships or taken up cheaper more flexible online alternatives like NearYou's highly successful Pay as you Go model.

Online Zoom bookings on NearYou offering a no contract model rose over 32% in 2020.

Apart from loosing revenue during the lockdown, gyms have had to endure ongoing costs, and additional Covid-19 costs. Smaller gyms and fitness studios will be more at risk. Many will fail to re-start or will struggle on with lower numbers in the hope that things will pick up.

The impact of Covid-19 has led some gyms buying online digital services to retain members during lockdown period. The Gym Group for example a low cost gym operator in the UK has set up a partnership with FIIT.TV at a cost of around £1m to offer online classes to its members.

At this stage its impossible to estimate the full impact of the crisis on these companies, but research by NearYou indicates that many of the smaller gyms are now having financial difficulties particularly those that relied on membership fees and failed to offer online zoom and video on demand.

We will update this blog as the figures come in.

In a nutshell what we think will happen

  1. A proportion of indoor exercise will move outdoors.
  2. The frequency of going to the gym or studio will fall.
  3. Consumers will become more price and value sensitive
  4. Ease of purchase, simplicity, will make online ordering de facto.
  5. On demand digital services will grow, everything from online classes, videos to wearables.
  6. At home digital workouts will increase in particular personalisation
  7. Bundled digital and online, and in person, will grow.

Opportunities for fitness professionals post lockdown

The industry will consolidate, the number of gyms and leisure centres will drop, and the services on offer will be cut. The crisis opens up a huge opportunity for fitness professionals who roll up their sleeves and embrace change.

The smarter businesses will seek new ways of attracting customers, offering a range of online and in person fitness activities, wellbeing, and even spirituality.

Delivering accessible services in a unified way, in person, with live and on demand videos. The only service that offers this unified model is NearYou.

As Charles Darwin said “It is not the strongest species that survive, nor the most intelligent, but the ones most responsive to change.”


Luxury wellness and home fitness

Statista 2021

Impact of Covid-19 going to the gym.

Research & markets report

Global Health & Fitness Club (Gym) Market: Insights & Forecast with Potential Impact of COVID-19 (2020-2024

Retail times

Source: Saul Auty (Near You)

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