A national kettlebell shortage and social media calls to #plankthecurve may have highlighted the importance of physical fitness at home during COVID-19 social distancing, but as gyms open up, people are coming back to sweat with your peers.
Gyms have reopened in more than half of states across the country as stay-at-home orders begin to be withdrawn, most under some form of reduced occupancy or other social distancing restrictions. President Trump’s federal reopening plan allows gyms to reopen as part of Phase 1. Public health experts say it’s too early to get back on the weightlifting bench, but many Americans are eager to get back to exercising. , even if the gym has been modified to allow for social distancing.
Fitness is a $ 34 billion industry and an estimated 20% of Americans have a membership in some type of gym, according to the International Health, Racquet and Sports Clubs Association (IHRSA). When their training spaces closed their doors, several of them turned to their phones or laptops. The pandemic has increased the addressable market for virtual fitness offerings and has also forced traditional gyms to offer more virtual products for home workouts, says Zach Apter, chief commercial officer for Classpass, which announced a $ 1 billion unicorn valuation. Dollars. dollars in January. The pandemic has also raised awareness of the health benefits of exercise – poor cardiovascular health is one of the main risk factors for serious illness or death as a result of COVID-19.
“We have experienced an impact on online or virtual fitness demand that might not have occurred in a world without COVID,” says Apter. IHRSA had already identified technology-enhanced offerings such as virtual fitness as one of the top industry trends in its 2019 report, and many gyms, especially large chains, were looking to advance further into the virtual space. But it could never have become a priority without COVID-19.
All of this developed in an industry that was already in a state of flux. “The fitness industry has evolved a lot in recent years,” says Piper Sandler analyst Peter Keith. The largest market segments are in high-end boutique fitness studios, which tend to cater for a specific type of exercise such as Pilates or barre, and high-value, low-priced (HVLP) gyms like Planet Fitness that rely on volume. . In the middle market are properties like Gold’s Gym, which were already struggling to stay relevant when the pandemic began, and their traditional customer base was reduced by offerings at the top and bottom of the market, Keith says.
Planet Fitness is one of the few publicly traded stocks in this space, and Keith says what happened there is a good example of how the pandemic affected valuation in the fitness space.
But the stock rose in early June, when an SEC filing stated that membership at the 800 locations remained stable, thanks to an increase in new subscriptions offset by billing.
The bottom line is that, like everything else, the fitness industry has changed due to the pandemic. But that doesn’t mean that people are going to stop exercising together.
But the industry will likely take months or years to stabilize, because a vaccine for SARS-CoV-2, the virus that causes COVID-19, is at least a year old, by most estimates. But the rapid change brought on by the pandemic has shown two important things: the closer virtual fitness products get to replicating the community impact of fitness, the more likely they are to be successful; And when possible, many are eager to break a sweat among their friends once again.
