With New Year’s resolution season in full swing, the fitness studio and gym industry is firmly back on its feet, having survived the existential crisis brought by the pandemic.
Early in the pandemic, about 1 in 4 health and fitness facilities permanently closed due to stay-at-home orders and people exercising at home, according to the International Health, Racquet & Sportsclub Association.
In the same way that restaurants and travel companies are benefiting from the economic shift in spending from goods to services, fitness studios and gyms are finally enjoying a return to normal.
“There’s a surge in getting back to some sort of in-real-life fitness,” said Orangetheory Fitness CEO Dave Long.
Between the lines: Orangetheory, which offers high-intensity interval training paired with heart monitors, plans to add more than 100 new studios to its 1,500+ locations in 2023, with about two-thirds to three-quarters of that growth happening in the U.S. , Long says.
“We’re really conservative on how we forecast openings,” Long says. “That means we have a hundred projects already going.”
Long says the company hasn’t been harmed by extended remote work arrangements largely because it’s rooted more in suburban areas that don’t rely on foot traffic from offices.
Yes, but: Inflation and the prospect of a recession could drive consumers toward cheaper fitness options, such as big-box fitness chain Planet Fitness or more at-home workouts.
Specialty fitness chain Soul Cycle recently closed about a fourth of its 80-some locations.
Soul Cycle and Orangetheory have historically targeted more affluent customers, whereas Planet Fitness advertises memberships for $10 a month.
“Planet Fitness should benefit from customer tradedown in a recession given price accessibility,” Bank of America analyst Jill Carey Hall wrote Tuesday in a research note, noting that the 2,000-location Planet Fitness has a “rising royalty rate” and is popular among Generation Z.
I asked Long about the premise that fitness centers actually don’t want their members to come in — because they make more money on people who pay but stay at home. He said that’s not the case for Orangetheory.
“The whole business is about getting people results,” Long says. “If people are not coming in regularly, they’re going to cancel pretty quickly.”
The darkest days are over for the fitness and health industry even if a recession hits.
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