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US Fitness Industry Lost 58% Revenue in 2020



US Fitness Industry Lost 58% Revenue in 2020

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Fitness profits shrunk from $35 billion to $15 billion from 2019 to 2020, leading to the loss of 1.8 million job and closures of 17 percent of clubs.

The total numbers for the depletion of revenue, foot traffic and employment for gyms and fitness studios in the US fitness industry for 2020 are in and they are devastating.

Fitness industry revenue plummeted in the US by 58 percent in 2020 when compared to 2019, according to an analysis of payment processing from the International Health, Racquet and Sportsclub Association (IHRSA).

The 2019 industry-wide hull of $35 billion in revenue shrank to $15 billion last year, leading to 17 percent of facilities closing permanently and more than one million employees losing their jobs.

The reason is, of course, the COVID-19 pandemic, which caused the sudden closure of US fitness industry facilities. About $5.5 billion of the $15 billion lost is from April and May, months when most fitness spaces were mandated to shut down across the country.

In subsequent months, gyms and studios struggled with capacity restrictions, costs of protective equipment, client weariness to return, inadequate government aid, trends that moved exercise (and exercise spending) online and to the home and their own struggles to adapt to the competitive digital marketplace.

Lockdowns were implemented again in some states as infection rates reached new peaks towards the end of the year.

Of the 17 percent of US fitness industry places that closed permanently, 19 percent were boutique fitness studios (like yoga or Pilates businesses) and 14 percent were gyms and traditional health clubs, according to the IHRSA data.

Several large chains, many of them already struggling under debt loads, sought Chapter 11 restructuring, including Gold’s Gym, 24 Hour Fitness and Town Sports International, and closed clubs as part of the process.

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In the resulting job loss, the fitness club industry’s workforce shrunk from 3.2 million to 1.4 million, a plunge of 44 percent.

The only trace of a silver lining is that foot traffic into gyms and studios in the US fitness industry increased through the end of the year, from the standstill of the nationwide lockdown phase.

According to Placer Ai, a firm that helps businesses measure patronage, health club visits fell by 80 percent in the second quarter of 2020 (relative to the same quarter in 2019). In the third quarter, at which full lockdowns eased in most places, visits were down by only 50 percent, and by the fourth quarter, they were down by 38 percent.

That is progress, but the IHRSA is warning that without aid the fitness industry may not recover fully for years, meaning that as more people want to come back, there will be fewer places for them to go.

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