Fitness Centers

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 31,100 fitness centers in the US provide exercise equipment, classes, and services that allow members to improve their physical fitness. The main source of fitness center revenue is membership fees. Fitness centers also generate revenue by providing athletic instruction, admission fees for non-member usage, and food and beverage. The industry includes independently-owned centers, chains, and franchises.

Seasonality of Demand

Most fitness centers experience higher membership growth right after the winter holidays, when many people resolve to lose weight or exercise more.

Membership Attrition

Maintaining a strong membership base can be a challenge for fitness centers.

Industry size & Structure

A typical fitness center operates out of a single location, employs about 12 workers, and generates about $954,000 annually.

    • The fitness center industry consists of 31,100 companies that employ about 466,900 workers and generate $36 billion annually.
    • The industry includes independently-owned centers, chains, and franchises.
    • Large companies include 24 Hour Fitness, Gold's Gym (TRT Holdings), Life Time Fitness, and Town Sports International.
    • There were around 64.2 million members of health clubs in the US in 2019, according to the IHSRA.
                                Industry Forecast
                                Fitness Centers Industry Growth
                                Source: Vertical IQ and Inforum

                                Coronavirus Update

                                Apr 29, 2022 - Many Worked Out More During The Pandemic
                                • Over 80% of respondents to a BarBend survey said that the pandemic impacted their workout habits, and nearly half of them (47%) say it was a negative impact. About 54% of Americans said they started working out more during the pandemic while 41% said they exercised less. Of those that began working out less, 15% said they completely stopped working altogether.
                                • Federal and local health officials are leaving it up to people to assess if they need booster shots, whether to wear a mask, and how long to isolate after a positive test, according to The Wall Street Journal. Businesses, schools, and other entities are scaling back specific guidelines. The lack of effective treatments, vaccines, and widespread testing early in the pandemic resulted in social distancing mandates and lockdowns. The response is becoming more tailored to people’s own health and appetite for risk, as those tools help blunt the worst outcomes as the virus continues to spread, according to public-health experts. “The history of public health has been a constant tension between individual-level and government or community-level intervention,” said Megan Ranney, an emergency-care doctor and academic dean of the Brown University School of Public Health.
                                • Exercise equipment and media company Peloton said in January that it will pause production of the Peloton Bike, its most popular piece of exercise equipment, for the next two months. Many experts cite a return to fitness centers and monthly charge of $39.99 to access its app and services as a key cause of decreasing demand for Peloton products. The Bike+ has been out of production since December 2021. Its Tread treadmill will be out of production in six weeks, and the company will not manufacture a single Tread+ in 2022. Experts say that the company has built too many bikes and treadmills under the assumption that home workouts would always be as compulsory and desirable as they were during the worst of the pandemic.
                                • Public health officials and experts are advising more caution in indoor gyms due to the increasing risk of COVID-19 infection amid the omicron surge. Many say that it is critical to mask up inside. Even with vaccination and masking requirements, different parts of gyms have varying degrees of risk. The least risky area is likely the weight room, given that users can spread out and stay distant from other people. The riskiest area would be indoor classes, where people are in close proximity to one another and are heavily breathing out respiratory particles, according to University of California, San Francisco infectious diseases expert Dr. Peter Chin-Hong. An area with moderate risk — somewhere between that of the weight room and indoor gym classes — would be around treadmills.
                                • Two new studies have found that the coronavirus is evolving to spread more efficiently through air. The discovery may be problematic for fitness centers, which have been identified as high-risk locations for airborne transmission. Most researchers now agree that the coronavirus is mostly transmitted through large droplets that quickly sink to the floor and through much smaller ones, called aerosols, that can float over longer distances indoors and settle directly into the lungs, where the virus is most harmful. The studies found that the ultra-transmissibility of the variants may come down to a mix of factors. It may be that lower doses of the variants are required for infection, or that the variants replicate faster, or that more of the variant virus is exhaled into aerosols — or all three. “Given that it seems to be evolving towards generating aerosols better, then we need better containment and better personal protection,” said Don Milton, an aerosol expert at the University of Maryland who led the research.
                                • In-home fitness saw a surge in popularity during the pandemic, but the Fitness Business Association (FBA) doesn’t expect the trend to hurt traditional fitness centers. The trend is more likely to act as a compliment, according to the FBA. “Remember, it’s not the first rodeo for in-home fitness. That sector of the industry dates back to a Jane Fonda VHS tape, Tae Bo, etc.,” FBA founder and CEO Josh Leve said. “There’s always a shiny new toy.”
                                • About 42% of adults reported undesired weight gain due to Covid-19, according to a recent survey by the American Psychological Association. The average increase reported was 29 pounds.
                                • The Centers for Disease Control and Prevention has said that cleaning once a day is usually enough to minimize the chance of coronavirus transmission in most settings. Fitness centers are likely to benefit if the guidance results in lower pandemic-related cleaning costs. The CDC did identify one appropriate situation for deep cleaning: an indoor environment where a case of COVID-19 had been confirmed within the past 24 hours.
                                • About 72% of gyms now offer some type of on-demand or livestream workout, up from the 25% of gyms that offered a comparable service in 2019, according to fitness research firm ClubIntel. Some gyms are offering a hybrid model through which classes can be attended in person or online. Some gyms offer live hybrid classes only, but others offer greater flexibility for those who prefer the remote option by offering prerecorded workouts that customers can follow according to their own schedules.
                                • The federal Equal Employment Opportunity Commission said that employees may be barred from the workplace if they refuse the COVID-19 vaccine. "Requiring a vaccine is a health and safety work rule, and employers can do that," said Dorit Reiss, a professor at the University of California Hastings College of Law. There are, however, some exceptions to a blanket requirement. A collective bargaining agreement may require negotiating with a union before mandating a vaccine. The Americans with Disabilities Act allows workers who don't want to be vaccinated for medical reasons to request an exemption.
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