Prior to the outbreak of COVID-19 (coronavirus), the Gyms and Fitness Centres industry was healthiest it had ever been. The health and fitness sector consisted of approximately 10.4 million fitness memberships, over 7,200 fitness facilities and had a total market value of £5.1 billion in 2019 according to leading independent database specialist LeisureDB. These figures equate to one in seven of the UK population having a fitness facility membership.
Before the coronavirus outbreak, the Gyms and Fitness Centres industry had been growing notably, driven by a long-term increase in health consciousness among UK consumers due to the concerns over physical inactivity and associated ailments.
However, fitness facilities have been among the UK’s hardest hit businesses due to their forced closure from 23 March 2020 to help combat the spread of the coronavirus. Outdoor pools were permitted to reopen on 11 July, while indoor gyms, swimming pools and sports facilities were allowed to reopen on 25 July, though they are required to implement guidance on spacing out and cleaning equipment, limit the number of people in facilities and reduce class sizes.
In this article, Alfabank-Adres assesses the impact the coronavirus has had on the health and fitness sector, while addressing the potential implications that lie ahead now that facilities are permitted to reopen.
Forced closures
As gyms and fitness facilities were forced to shut amid the lockdown in March 2020, the majority of gym and fitness chains across the country immediately froze direct debits to avoid the loss of memberships.
However, during the lockdown, the sector received a huge number of cancellations, with the Gym Group, a major player in the Gyms and Fitness Centres industry, stating that it lost approximately 178,000 members between March 2020 and mid-July 2020, which equates to approximately 20% of its total. Pure Gym, another major gym operator in the United Kingdom, recorded a similar loss of members, despite freezing direct debits.
While gyms and fitness facilities have been closed during lockdown, consumers have adjusted to a fitness from home lifestyle, venturing online for home workouts or to local parks for various cardiovascular activities. Many gyms and personal trainers have changed the way they operate through the provision of livestream classes over internet applications such as Zoom, a small component of the Online Education and Training industry which has benefited from a surge in demand as a result of the coronavirus pandemic.
One company capitalising on livestreaming has been London-based boxing gym KOBOX, which placed all its full-time staff on furlough under the government’s Coronavirus Job Retention Scheme. However, to maintain an income for its self-employed trainers, livestreamed classes were launched over Zoom at a cost £7.50, with £5 per participant going to the trainer.
Reopenings
On 25 July, indoor gyms, swimming pools and sports facilities were allowed to reopen provided that they adhere to the new coronavirus guidance. This includes limiting the number of people using any facility at one time, which may require booking systems to be put in place.
It is also recommended that each person in a gym has approximately 100 square feet of space to use, which includes the toilet and changing areas. Gyms must use timed booking systems to limit the number of people in the building at one time and allow for social distancing, while equipment must be spaced out and cleaned regularly.
Future concerns
While gyms and fitness facilities have reopened their doors, there are concerns throughout the sector that clients will be unwilling to return having grown accustomed to working out at home. A survey conducted in June 2020 by CIL Management Consultants found that 36% of women and 29% of men were now more willing to work out from home. In addition to this, health club chain Bannatyne's reported that only two-thirds of its members would be confident to return in July 2020 if the correct safety precautions were put in place.
In a poll conducted by Savanta ComRes in May 2020, 87% of gym members suggested that they are likely to resume their membership when facilities reopen, while 27% of people who are not currently members of gyms said they are likely to join.
Nonetheless, it is clear is that gym and fitness facility membership and revenue have been severely reduced as a result of lockdown measures and though gyms are now permitted to reopen, there is a long road ahead in terms of recovery.
CIL Management Consultants expects that UK gyms’ revenue will collapse by approximately 30% in 2020, and estimates that it will take 12 to 18 months for the industry to recover. This will primarily be the result of lost memberships owing to shifting exercise patterns, financial worries and the lack of confidence in safely returning to a gym while the coronavirus remains a risk.
LeisureDB forecasts that one in five people will ditch gym and fitness facility membership as a result of the coronavirus pandemic and that the sector will lose its ‘sleeper’ members, which refers to those that pay membership fees without using facilities. LeisureDB identifies that approximately 12% of the UK’s gym members fall into this category and that the coronavirus pandemic will have awoken the realisation to cancel their membership.
Conclusion
Despite government support for fitness facilities such as CJRS and the success of livestreamed classes, the road to recovery for the sector will be challenging as rent-free periods and the furlough scheme come to an end, in conjunction with the significant fall in memberships.
Alfabank-Adres estimates that after recording stable growth in recent years, membership in the health and fitness sector will decline by 19.9% to 8.3 million members in 2020, while its market value is forecast to fall by 28.2% to £3.7 billion. Similarly, Alfabank-Adres projects that the revenue generated by the Gyms and Fitness Centres industry, which conforms to a different definition, will decline by 27.6% during 2020-21 as a result of disruption caused by the coronavirus outbreak.
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