By the time this newsletter is published, fitness clubs in almost all European countries are again back in business. But just as the seriousness of the Covid-19 casualties were hugely different by country, so diverse were the reopenings. Some from as early as the month of May and others as late as end July or August. The longest closed were operators in Wales but German operators in NRW were among the first to reopen and in Sweden clubs were never officially closed.
Consumers returning to the gym, will notice their workout will be different than before the coronavirus lockdown. Some fitness fans can’t wait to get back to the gym. For others, being indoors in close proximity to other people engaging in high intensity exercise is the last place they will feel comfortable.
In most countries, the authorities have issued protocols limiting the number of people inside at any one time and offering “busyness trackers” on their apps, so customers can decide the best time to visit. At peak hours, people may be asked to book ahead of time, or keep their workouts to an hour. As for locker rooms, showers sauna’s and swimming pools it’s a mixed picture, depending on particular clubs, locations and countries.
For gyms, in addition to contending with costly measures to contain the spread of the virus and keep customers feeling safe, it’s a changing landscape in terms of where their customers are and what they may want. Particularly for fitness centers located in business districts, there may be far less demand when they reopen as working from home becomes entrenched. And the new routines people have embraced while at home may lend themselves to working out in one’s kitchen or livingroom, rather than going to the gym at all. Consequently, clubs could face a wave of cancellations, particularly after the summer.
Many gyms, both boutiques and big-box outlets, have turned to digital content and streaming of exercises. During the lockdown this has become really popular, but the problem has been that many operators offered these online services for free during the lockdown. Now that clubs are open again they will have to find a way to monetize the offering of virtual fitness.
In the U.K. alone, there were more than 600 Instagram Live workout classes in one day. It also puts operators in more direct competition with trendy home-workout programs such as Mirror, which was just acquired by yoga-wear maker Lululemon for $500 million, and Peloton, which has seen such explosive demand for its stationary bikes that it paused advertising back in March while it moved to accelerate its supply chain.
The budget sector, which has been booming on both sides of the Atlantic, is not immune to the new pressures either. It faces a future with higher hygiene-related costs, such as the more regular and intensive cleaning of equipment, as well as capacity restrictions due to the 1,5 meter distances required. These extra expenses may be difficult to accommodate when clubs are typically charging only about 20 to 30 euro a month.
However, the economic difficulties the Corona crisis has created, also will offer opportunities for mergers and acquisitions, as the acquisition of iconic global brand Golds Gym from a bankruptcy situation by German operator McFit ( RSG Group) and the take-over of the 50 Exercise4Less clubs in the UK by JD Sports Gyms in July has demonstrated ! Industry experts predict that more M&A activity – both on the supplier and operator side - can be expected in the second half of 2020.
Even so, companies with larger facilities and located in suburban areas will be able to react to the new normal quicker and in a more efficient way. Also experience so far has shown that younger members may be less cautious about coming back. Pure Gym found that when its clubs reopened in Switzerland, people under 30 were three times more likely to return than those over 50.
Yes, some people may ditch their subscriptions as the hard economic impact of the lockdowns hits. But no-frills clubs may also benefit from cash-strapped fitness fans trading down.
The result is that even the most nimble, well-situated competitors will have to work up more of a sweat to compete in the (post) Covid-19 era.