Publication | ThinkSet

How the Fitness Industry Can Recover from COVID-19

September 2, 2021

Hybrid models lead the list of smart strategies for fitness operators as they grapple with changing consumer habits and the Delta variant.

The fitness industry, like many others, was upended by the coronavirus pandemic. Things started to stabilize in recent months, but the Delta variant is changing the game. Mark Laber provides insight on COVID-19’s lasting lessons for the industry, how consumers have changed—possibly for good—and what investors are thinking.

Q: How has COVID-19 changed the way consumers handle their own fitness?

ML: Many consumers have shifted to at-home workouts, perhaps not surprisingly given the fact that Americans were forced to stay at home for much of the past 18 months—and still have reasons why getting out isn’t easy.

Between April and June 2020, Americans spent an average of $95.79 in at-home fitness (e.g., yoga mats, resistance bands, dumbbells, exercise bikes, treadmills and ellipticals). That period covered the pandemic’s earliest months, but the effect appears to be lasting. The home fitness equipment market in the US is expected to grow to $14.74 billion in 2028, compared with $10.18 billion in 2020.

Q: How are traditional fitness operators trying to adapt?

ML: Understandably, they’ve pivoted to digital, searching for new ways to keep members engaged either through the web or app use. Interestingly, digital adoption by fitness members has increased 20 percent even since the end of last year. But importantly for the industry, consumers don’t seem thrilled with the new reality.

We know that based on some research released late last year. According to an IHRSA survey from October 2020, half of gymgoers were not satisfied with their new fitness routines, and roughly the same percentage of those who had yet to return to the gym were struggling to motivate themselves to work out. The survey also found that 42 percent of gym members went three to four days a week before the pandemic. This data would seem to inspire hope that consumers will eventually return in some fashion.

Q: What are some of the more interesting and unique features that fitness operators have offered consumers? What should they be trying—or what isn’t worth the risk?

ML: Operators accelerated the development and rollout of member mobile applications—as complete overhauls and, in some cases, de novo applications. That provides another medium to connect with members and drive engagement. A user-friendly mobile application is a key element for fitness operators aiming for a hybrid model, which we’ll discuss below.

Q: Can traditional operators do more while they mull the “Will consumers return” question?

ML: Traditional operators must walk a difficult line. They necessarily began offering a lot of on-demand/virtual offerings during the pandemic, and they logically might think that simply ending those is the smart play post-pandemic. And while we believe members miss the social element and sense of community they got from attending the gym pre-pandemic, traditional operators shouldn’t hang their hopes on that being enough for things to snap back to a 2019 world.

Instead, they should embrace hybrid models. Operators need to utilize online presences to attract and retain customers who prefer the flexibility of virtual options, while also drawing people to the physical clubs.

Q: How can the industry move forward to meet the needs of consumers and investors?

ML: Investors are focused on at-home and on-demand platforms. New players will emerge, as some traditional operators (mid-tier chains and some regional high-value, low-price (HVLP) concepts) have been decimated. Some brands and concepts continued to be “loved” by investors—like Planet Fitness franchises.

Fitness operators, like most companies in consumer services, need to balance needs of investors, consumers and employees while juggling new variables like the Delta variant. A few months ago, companies thought normalcy was just around the corner, but the current reality shows why a hybrid model is so important: it allows for flexibility amid turmoil.

BRG Experts

Related Professionals

Mark Laber

Managing Director

New York