Putting Brakes On Downward Fitness Space Trend

Fitness industry pedaling forward via Congress and smarter outreach.

Not too long ago a story claimed the fitness space’s pre-COVID explosion had stalled, just at the time they were zooming in on IPOs. For readers who are not much into finance, we’ll just offer the simple definition of IPO: it’s ‘Initial Public Offering’ i.e., the first time a private company goes public, offering shares to outside buyers.

Since March 2020, all aspects of the fitness space have taken major blows. In its initial 2021 report, the International Health, Racquet, and Sportsclub Association (IHRSA), noted 17% of fitness clubs and studios had permanently closed…and new reviews bring even gloomier numbers.

Speaking with AthletechNews.com, IHRSA’s Executive Vice President of Public Policy, Helen Durkin, JD, said, “As of July 1, 22% of [both] health fitness studios and clubs will have closed [but] impact isn’t quite proportional. By the end of the year, for gyms, [there] could easily be 25% closure and, as our fall report notes, 27% of fitness studios alone have already closed permanently.”

Fitness has faced its own challenges

Chris Craytor, CEO of ACAC Fitness and Wellness Centers and a board member of IHRSA, told Athletech News, “Shutting down the business was…really challenging. Then [add in] how to grow back the business after the shutdown.”

He added, “One of the challenges that’s unique to our industry is that it truly is slower to recover, just because of the nature of our customer base. Unlike a restaurant that has a set number of tables…we’re a membership business that typically grows over time. So membership businesses, like a health club, just take maybe a little bit longer to fill.” 

Getting Congressional recognition

“When Covid started…we were committed to daily content in order to help the industry know what was going on, how to learn from their peers, how to do stuff. There was definitely a lot of resources and a lot of sharing about how to make the biggest difference,” said Durkin, noting these resources are still on IHRSA’s site.

She also reminded owners to glean dollars from the EIDL program, the low-cost loan, and ERTC, the tax credit for employee retention. 

But one of the biggest mistakes fitness space leaders made was not getting more active with our elected leaders, especially the U.S. Congress.

Durkin noted, “We kept hearing that restaurants, bars, and stages needed relief…and they got relief in separate packages. But the gyms weren’t included.”

It was last October that U.S. Reps. Mike Quigley (D-IL) and Brian Fitzpatrick (R-PA) introduced the Health and Fitness Recovery Act of 2020 in the House. Their joint press release noted then, “We’ve seen this health crisis attack people with preexisting conditions, making people eager to get to the gym to maintain and improve their health,” said Quigley. “We must ensure gyms have the resources they need to make it to the other side of this crisis and protect their customers in the interim.”

Fitzpatrick added, “Unlike many other businesses financially impacted by the COVID-19 pandemic, health and fitness clubs did not have the capability to pivot to new revenue streams, and many in the industry failed to qualify for assistance in the first CARES Act…. There is no question that hardworking men and women who work in this industry need and deserve our help.”

Traveling through Congressional mud

Durkin said that finally taking a grassroots approach, “the industry has really totally re-looked at how they thought about public affairs and what they needed as a voice in Washington. [Now] well over 60,000 emails have been sent to Congress asking for relief and help for the gyms.”

Still, it wasn’t till this February that meetings with Congressional leaders started gaining true recognition, and a proposal called the Gym Mitigation and Survival (GYMS) Act was introduced. As IHRSA’s site notes, that month, Quigley and Fitzpatrick filed it in the House; then on May 13, 2021, U.S. Senators Tammy Duckworth (D-IL) and Jerry Moran (R-KS) filed the Senate version. 

The industry keeps moving forward

Despite so much dire news and stalls, just as with the grassroots policy, the fitness space isn’t sitting on its hands. That’s not a new exercise they’d like to try.

Instead, Craytor said, “Fitness clubs are smart. We’re adapting too. So we’re building our own online platforms. We’re building our own hybrid business models that include on-demand as well as in-person exercise. And, quite frankly, as I said, if over 20% have closed, what that means is that there’s going to be more opportunity for those clubs who have managed to survive to obtain that business as it comes back, and the effects of Covid begin to subside.”

“What we’ve seen in our clubs is that people like coming back to in-person exercise,” added Craytor. “We’ve seen that people are really encouraged by each other. They like having their friends around. And that being there in person is not a substitute for the online workout.”

“So, as health club owners, we have an opportunity to not only let people know about our business in a way that it affects us personally, but also let everyone know that we represent a lot of people who love our product and want our product to succeed and continue,” he concluded.