The fitness industry, in my 34 years, has been recession-proof globally. But this COVID-19 pandemic is different. Never was there a time when the gym’s income falls to zero the following day and stays like that for five months!
Everyone was caught flat-footed. No one was prepared to handle this five-month business pause. When news leaked last April that gyms might open by September still, I sadly buried my face in my hands and uttered “that’s a death sentence.”
True enough, gyms are closing left and right. I am sure most, given the fighting chance, would love to remain open. In the end, the gyms can only afford to continue with the help of landlords, ample relief from the government and support of the community they serve.
One of the best things that happened to the industry is the emergence of a coalition of the country’s biggest gym chains. Through the joint efforts of the fitness industry’s business leaders, the gyms were finally reclassified by the Department of Trade Industry (DTI) from a Category 4 business, which can only operate 50 percent during MGCQ, to a Category 3 business, which can operate at 30-percent capacity during GCQ.
The DTI required re-opening protocols from each member of the coalition, and from that, they came up with minimum requirements to keep the gyms as safe as possible. Basics such as disinfecting stations, shoe baths, a mask requirement, temperature checks, health forms, proper ventilation and physical distancing are required. The DTI also imposed a 30 percent maximum capacity and prohibited any group classes or small group training. Gym equipment will be a meter away from all sides and while the member may opt to remove his mask while doing strenuous exercise, the next person such as the personal trainer should be two meters away.
The night before DTI was supposed to meet me for a walk through in the gym as a pre-inspection before opening, Metro Manila was once again placed on MECQ. Our Gold’s Gym staff and members alike were already jubilant a few days before due to the announced re-opening. Sentiments plummeted as fast as excitement rose.
Will people ever go back to the gym? In most countries where gyms have slowly re-opened, the experience is that only 20 to 30 percent of their members freeze their memberships and this drop is replaced by new gym goers.
In California, a one-month study of 2.2 million gym goers and nearly 16,000 staff revealed that only 0.002 percent of members and 0.373 percent of staff got the virus. That is definitely lower than the state percentage and it is not even conclusive that they got the virus in the gym. As many experts point out, most of the transmission happens at home.
The validity of the report that your propensity to be infected is a function of the amount of virus in the air and the amount of time you are exposed to it is clearly reflected in the research numbers.
“ Cash reserves and the willingness of shareholders to pump in more money is probably the biggest hurdle. That’s why I strongly believe that aside from closures, we will also see a lot of mergers and acquisitions. ”
In the recent virtual Fit Summit in Singapore, its CEO Ross Campbell told me that four key industry challenges have been identified. These are “financial constraints and negative cash flow, creation and monetization of new offerings such as digital group classes and personal training, engagement of members through lockdown periods and rolling closures, and adhering to stricter, and at times incredibly limiting, new operational practices.”
Despite that, Ross still believes in the silver lining. “Health and wellness will become the No. 1 priority of every person on the planet. However, to survive this ongoing crisis any company needs to be best-in-class, rich with innovation, with deep pockets and shareholders who will accept short-term losses in lieu of longer-term gains,” Ross added.
Cash reserves and the willingness of shareholders to pump in more money is probably the biggest hurdle. That’s why I strongly believe that aside from closures, we will also see a lot of mergers and acquisitions.
Everybody on the planet heard that at the onset of the global lockdown, Gold’s Gym in the United States filed Chapter 11 bankruptcy. Since they hold the most iconic fitness brand, it was not hard to find a new owner in the RSG Group of Germany. RSG owns the largest fitness chain in Germany, Austria, Italy, Poland and Spain through its brands McFit, John Reed and other lifestyle concepts.
In Metro Manila, I am sure you noticed that gyms have mushroomed. Growth of gyms increased by 500 percent in the last five years, unmatched by the increase in population. Meanwhile, market penetration in the whole country remains a single-digit low estimate of two percent to a high of five percent. This oversupply will technically be corrected by gym closures.
Can online platforms ever replace physical gyms? Not for everyone. With such a very small penetration rate compared to other countries, the contraction of gym members and attendance will be temporary. Now that more people value health and immunity, many will incorporate exercise in their daily schedule.
Plus nothing is new when it comes to home exercise. Remember the world’s Jane Fonda and Billy Blanks obsession? Despite that, physical gyms still grew. Also, extensive research has shown that those who use online apps still maintain or get gym memberships eventually.
Home equipment sales tripled during the quarantine but in time some of those people will still go back to the gym due to a lot of factors such as the support and motivation from the gym community, a variety of equipment and programs and simply a bigger workout space.
Currently, all our online efforts (classes, challenges, info) to help motivate members to continue their fitness regimen at home are free. Our fitness professionals were allowed to do their own online training to fund their quarantine needs. The only paid online platforms we have are the ones we had to maintain because of existing corporate contracts.
My personal take on this business hiatus? It forces you to reflect on what’s most important. Aside from my faith and my family, my gym family remains important to me knowing we help each other grow stronger every day.
It makes you review the systems you have in place and reinvent what needs to be recreated to blend well with the demands and challenges of a fast-changing environment while maintaining your brand DNA.
Lastly, it makes you grateful despite the uncertainties and a growing lack of control. I believe that it is only with gratitude and faith that we can boldly move forward to a better tomorrow brimming with hope.
Edited by Büm Tenorio Jr.