Inside the K-Shaped Economy Taking Over the Fitness Industry

As HVLPs and luxury clubs pull away, mid-market gyms and boutique studios face mounting pressure to prove their value to consumers with more options than ever before

The brick-and-mortar fitness industry is booming, fueled by rising consumer demand, record participation and a growing willingness among Americans, especially young people, to spend on their health as they cut back elsewhere amid economic concerns. 

But not everyone is winning in this new paradigm. 

A “K-shaped” economy is taking hold across fitness, with high-value, low-price (HVLP) gyms and luxury clubs gaining momentum at opposite ends of the market, while mid-priced operators and many boutique studios face increasing pressure to prove their value to consumers with more options than ever before. 

Still, the general trend is positive for fitness and wellness, and there’s some reason to believe a rising tide could lift all (or most) boats. 

“There’s very deep pockets of capital that are looking for opportunities within fitness and wellness,” Bank of America managing director JuliAnn Burkhardt said during the Health & Fitness Association’s annual financial panel earlier this year.

Fitness Is Becoming Essential for Many Americans 

The brick-and-mortar fitness sector’s strength starts with growing demand among Americans, an increasing number of whom are finally making their way inside gyms and studios. 

A record 81 million Americans — roughly 26% of the population — now belong to a gym, studio or fitness facility, according to the Health & Fitness Association (HFA). Including non-members, total participation climbs to around 100 million Americans, with facility visits also reaching an all-time high.

More importantly, people aren’t just signing up to go to the gym; they’re actually showing up. This hasn’t always been the case. 

Per HFA, the number of gym-goers who didn’t use their membership in 2025 fell to an all-time low, dropping from around 10% to 4.6%.

This new engagement data directly contradicts the old “membership mill” model, where low-price gyms had the reputation of basing their business model around the practice of signing up as many people as they could for a low monthly fee, and hoping they wouldn’t actually show up.

“What this data makes clear is that fitness facilities can no longer be considered a niche amenity but part of the basic infrastructure that Americans rely on to manage their health, stress and sense of community,” said HFA vice president of research Anton Severin. “Even in an uncertain economy, people keep going to the gym because they see real value in what these spaces provide.” 

That shift is also showing up in spending behavior. Americans are expected to spend roughly $60 billion on fitness in 2026, according to HFA, with many indicating they would cut back on dining out, travel and entertainment before canceling a gym membership.

A ‘K-Shaped’ Economy Comes Into Focus

While demand is rising significantly, the spoils aren’t being distributed evenly among operators. 

The industry is increasingly splitting into two clear winners: low-price gyms and high-end clubs, with middle-market players left in a tough spot. 

Analysts say the trend mirrors broader “k-shaped” consumer behavior across the U.S. economy, where spending is becoming increasingly bifurcated between high and low-income earners. 

“COVID really accelerated what we call the ‘barbell effect,’ where the mid-tiers dropped out and the consumer either went down to HVLPs … or consumers who want nicer, better amenities go to the Life Times, Equinoxes and Bay Clubs of the world,” Kyle Perreira, an investment banking executive director at JPMorgan, has told Athletech News. 

Life Time, for example, continues to benefit from affluent consumers willing to pay more for premium experiences — the luxury operator continues to expand across the U.S. amid surging revenue and membership numbers. 

Meanwhile, HVLP gym giants like Planet Fitness, Crunch Fitness and EoS Fitness are expanding rapidly, the latter two having been acquired in 2025 at valuations reportedly exceeding $1 billion. 

HVLP Enters a Golden Era

Investors are highly bullish on the growth prospects of HVLP gyms in the years ahead, pointing to their increasingly impressive value propositions as operators add wellness and recovery amenities, more premium equipment and new tech tools. 

“There’s probably more institutional interest in HVLP right now than there has been in a long time,” said Adam Hemmer, a managing partner at TSG Consumer Partners, which acquired EoS in May. “We think that’s a long, multiyear trend here, maybe multidecade.”

And the low-price gym model continues to evolve. Industry leaders say HVLP is now entering its next phase — “HVLP 3.0” — with operators pushing further into areas like recovery services, AI-powered training and boutique-style programming, including Pilates and mobility classes.

“The days of HVLP just being rows and rows of treadmills (are) no longer,” EoS Fitness chief operating officer Richard Idgar said. “Consumers want variety in addition to accessibility and community.”

Mid-Priced Gyms Feel the Squeeze

The rise of HVLPs has placed mid-priced operators in a tough spot, many of whom are struggling to differentiate themselves from low-price gyms. 

“It’s a tough place to be,” Jeremy Hirsch, head of franchise and multi-unit services at Houlihan Lokey, has told ATN. “If (both segments) are offering similar services, then the question becomes: Why am I paying more money for an equal or subpar experience?”

This pressure is already driving consolidation across the industry, with HVLP franchise groups acquiring struggling mid-market chains. 

Crunch’s largest franchisee, CR Fitness, acquired nine 24 Hour Fitness gyms in Florida last April, following an earlier deal for two New York Sports Club locations. Smaller operators and mom-and-pop gyms operating in the mid-priced segment face similar pressures. Crunch franchisee Fitness Holdings North America acquired five Jersey Strong gyms in New Jersey in early 2025, while a Planet Fitness group scooped up all 11 Texas Family Fitness locations at the end of 2024. 

“I think the majority of regional brands or mom-and-pops will get swallowed up, but there will always be room for (some) mom-and-pops given the hyper-regional nature of gyms,” Perreira said.  

A Comeback Story for the Middle?

Not everyone is ready to write off the middle market, though. 

Industry titan Mark Mastrov, who recently reacquired 24 Hour Fitness, believes mid-priced gyms still have a role to play, particularly for consumers seeking a more balanced experience.”

Mastrov is betting that some members will gravitate away from crowded, high-volume gyms in favor of facilities that offer more space and a slightly more premium experience, albeit at a higher price point. 

“I think the middle’s coming back,” Mastrov said. “If you look at the facilities that are opening up around the country, you’ve got some that are just selling low price at high volume, but people are starting to think, ‘Do I really want to go to a club that has 2,000 (people) a day, or do I want something that’s got a bit more room, where I don’t have to wait to get on equipment?’”

Lindy Firstenberg, co-lead of the Beauty, Health and Wellness Practice in the Americas for global consulting firm AlixPartners, agrees with Mastrov. 

“Interestingly, we’re seeing a rise in the middle of the market — mid-priced, multidisciplinary gyms — something we don’t typically see in other sectors,” she told ATN. 

Bank of America’s Burkhardt notes there’s spending data to back up Mastrov’s and Firstenberg’s assertions about the future of the middle market. Pointing to BoA credit and debit card data, Burkhardt said that consumers at all income levels are spending more on fitness, not just high-earners.

“A lot of the headlines right now around the U.S. economy is the K-shaped economy —  the higher-income consumer is driving so much of the spending growth in the economy,” Burkhardt said. “Our data around fitness and wellness actually shows growth across all income demos.”

Boutique Fitness Faces a New Reality

Boutique fitness brands are also facing new competitive pressures, and it’s unclear how the market will shake out in the years ahead. 

As HVLPs and other big-box gyms start offering Pilates, heated group fitness and small-group strength-training formats, they’re increasingly encroaching on boutique territory, usually for a cheaper price. 

There’s some belief that consumers will gravitate toward the idea of getting all of their fitness needs taken care of under one roof, compared to shelling out for individual boutique classes. 

“Consumers get psychologically tired of doing the same thing over and over again,” said Houlihan Lokey’s Hirsch. “I think it’s very hard, for example, to be a cycling concept and expect your members are going to come three to five days a week. They’re most likely going to pair it with something else.” 

“(Investors) are always concerned about that risk,” he added.

This isn’t to say boutique fitness is going away — recent private equity deals to acquire strong-performing brands like Solidcore and Barry’s would say otherwise. But investors believe the brands that survive will need to evolve, whether by incorporating trends like strength training, leveraging technology or refining their core experience.

“I think the (boutique) concepts that will continue to win are those that can evolve also within their modality,” Burkhardt said. “We’ve all seen strength, for example, become front and center on the back of GLP-1s.”

“So (brands) that can integrate strength into their existing modality” will be best-positioned in the years ahead, she added.

This article was taken from Athletech’s 2026 State of the Industry report, which examines the trends shaping the future of fitness and wellness, drawing on founder, CEO and investor insights. To download the report in full, click here.