Why gyms are closing and where to now with the industry

KeithReilly

I'm interested to hear why people think gyms are closing? I know there's obvious answers, the state of the economy, upward only rent reviews etc but why do you think gyms are closing?
Is the big box gym model finished?
If you have given up gym membership what would attract you back?

Oryx

Ive been a member of leisure centre type gyms before, so Im not a powerlifting type, but this is what made me leave.

Cost
Value for money (dont go enough to warrant it)
Boredom (same old same old)
Bought home gym instead (cheaper and convenient)
Training outdoors and in classes is more fun and sociable.

What would make me join again

PAYG membership
Challenges and incentives to train (ie free membership offers for meeting targets)
Motivational staff, who actually coach.


The problem as I see it, is that it isnt economically attractive for gyms to offer the incentives I mention above.

jive

KeithReilly wrote: »

I'm interested to hear why people think gyms are closing? I know there's obvious answers, the state of the economy, upward only rent reviews etc but why do you think gyms are closing?
Is the big box gym model finished?
If you have given up gym membership what would attract you back?

All business are closing, not just gyms. It's got to do with the recession. A typical gym membership is ~€500 (some are more, some are less obviously). If you're struggling for money €500 is a lot and the gym isn't a necessity. Also take into account spending money on petrol to travel to the gym which is also now more expensive.

Most gyms will be fine. It's a very saturated market if you ask me and everybody tried to join in on the act when people were becoming more health conscious. It's easy to keep a business going during a boom but when push comes to shove and money dries up if you are in a market as saturated as the gym market then you will probably struggle because like I've said already, it's not a necessity to people.

Cheaper gym membership would attract me back but that's not possible for most gyms as they have to be profitable and cover the cost of the employees, rent etc. The same can be said for supplement shops these days as most sports shops now carry supplements. I can see a few of them closing down unless they have good prices.

jive

Oryx wrote: »

Motivational staff, who actually coach.

This too. I find a lot of people leave gyms because the staff are unfriendly / sh1t. It's not even about going to socialise; more to do with the fact you'd rather feel welcomed for using the facilities rather than unwelcome. You can see some staff think your arrival is some kind of hindrance for them, all the while they stand around not doing anything.

Zamboni

KeithReilly wrote: »

I'm interested to hear why people think gyms are closing? I know there's obvious answers, the state of the economy, upward only rent reviews etc but why do you think gyms are closing?
Is the big box gym model finished?
If you have given up gym membership what would attract you back?

The big box model is far from finished. Ben Dunne is opening one in the Beacon, Sandyford in September.
The industry is alive and well.
A couple of horses falling at hurdles does not signal any great trauma.

dartstothesea

What's big box model mean? I can sort of guess but not so sure.

UpTheSlashers

Sadly, the most succesful gyms seem to be those who prey on those who are seriously unfit and unmotivated. Raking in memberships in january knowing that they will only see most of their clients once or twice.

DL Saint

UpTheSlashers wrote: »

Sadly, the most succesful gyms seem to be those who prey on those who are seriously unfit and unmotivated. Raking in memberships in january knowing that they will only see most of their clients once or twice.

Completely agree. Also the fact that people are still willing to pay a fair few quid for bullsh*t like the educ0 gyms is baffling! :eek:

dartstothesea

Can't remember where I've seen it said (may have been on this forum) but yeah, I have heard that the only thing that makes gyms financially viable / possible at all is fees from members that don't even go.

SanoVitae

Zamboni wrote: »

The big box model is far from finished. Ben Dunne is opening one in the Beacon, Sandyford in September.

Personally, I would not include Ben Dunne's gyms as an example of the big box model.

He offers no frills gym memberships at a rock bottom price, which makes it pretty much impossible for others to compete with. Only that gym chain from Germany (can't remember the name) could do the same and survive over here.

As I mentioned in a previous thread, there is another househould name gym in serious financial trouble who I expect to close down within the next 18 months. The overheads are huge and they are losing members (and sacking staff) at an alarming rate.

Zamboni wrote: »

The industry is alive and well.

Not the way it currently is, in my opinion.

My prediction is there will soon be as many Ben Dunne gyms as there are chains of McDonalds. Gyms at the total opposite end of the pricing spectrum (e.g. David Lloyds) will continue to prosper. Their target market, however, is less than 1% of the market. The priority of the members of these gyms is not price so it will never be a factor as to whether they join. As far as I know, David Lloyds Riverview RAISED their prices during the recession.

Gyms who are in between these 2 extremes will continue to struggle. This is because the value of the services they currently offer does not even match yet alone exceed the price they are charging.

Things need to totally change within gyms for them to survive - merely having nice equipment and a lovely pool is not nearly enough any more....

mrpink6789

SanoVitae made a good point in another thread which I agree with that the future is smaller gyms building up reputations through word of mouth. I joined a small outfit due to a mates recommendation and have already brought 3 people with me.

The big ones are operating like most chain stores, set up as many places as they can and leverage the money of the ones that are making a loss off the ones that are profitable. Thats always going to be dodgy as purse strings tighten.

SanoVitae

mrpink6789 wrote: »

SanoVitae made a good point in another thread which I agree with that the future is smaller gyms building up reputations through word of mouth. I joined a small outfit due to a mates recommendation and have already brought 3 people with me.

Since the 90s, the fitness industry has been dominated by big businessmen who, after noticing that there was billions to be made within the industry, started opening up their own gyms which they quickly expanded into chains of gyms and franchises.

I see it going back to the way it was in the 70s and 80s, where gyms were started up by people who did so because it was their passion. Those who do so will inevitably provide a much better service with infinitely better customer service - light years away from the miserable receptionists who populate most of the big gym chains and can't even smile or say hello.

The Davestator

I agree with a lot but disagree that the smaller type gyms will thrive. I know of a huge amount of single site small gyms that have closed over the last 2 years. The chains are still here for the most part. Energie took over JSF sO no closure there. Only TF is gone and maybe one other mid range chain to follow.

SanoVitae

The Davestator wrote: »

I agree with a lot but disagree that the smaller type gyms will thrive.

I didn't say that they'd thrive, just that a lot more fitness enthusiasts would open their own gyms.

There is a definite gap there for them - many fail simply because they know lots about fitness and nutrition but little to nothing about marketing and how to run a profitable business.

Oryx

Oryx wrote: »

Ive been a member of leisure centre type gyms before, so Im not a powerlifting type, but this is what made me leave.

Cost
Value for money (dont go enough to warrant it)
Boredom (same old same old)
Bought home gym instead (cheaper and convenient)
Training outdoors and in classes is more fun and sociable.

What would make me join again

PAYG membership
Challenges and incentives to train (ie free membership offers for meeting targets)
Motivational staff, who actually coach.


The problem as I see it, is that it isnt economically attractive for gyms to offer the incentives I mention above.

A nice idea, but not very economic. How about the opposite as a method to encourage participation? Seems to be quite a cool idea I think.

A Gym Where It Costs You to Skip a Workout
A lot of people who join gyms or health clubs find it very easy to stop going. Gym-Pact, a new program in Boston, aims to change that. “Gym-Pact offers what [co-founder Yifan] Zhang calls motivational fees: customers agree to pay more if they miss their scheduled workouts, literally buying into a financial penalty if they don’t stick to their fitness plans,” explains Susan Johnston of The Boston Globe. “The concept arose from Zhang’s behavioral economics class at Harvard, where professor Sendhil Mullainathan taught that people are more motivated by immediate consequences than by future possibilities.” Gym-Pact launched a small pilot program last fall at Bally Total Fitness in Boston, and expanded its program at two Planet Fitness gyms in Boston in 2011. Currently, participants are fined $25 if they fail to follow the schedule in any given week, but Gym-Pact’s founders are still refining their model. “Zhang and [Geoff] Oberhofer plan to tweak the fee structure to allow it to be customized to a customer’s goals. Future iterations may include a combination of discounted gym memberships and smaller penalties that apply daily rather than weekly.”

UpTheSlashers

Deleted User wrote: »

A nice idea, but not very economic. How about the opposite as a method to encourage participation? Seems to be quite a cool idea I think.

I could see something like that causing a lot of legal hassle. What if someone stops going through illness etc.
The only way I could see it working is if members paid over the odds for membership at the beginning with the chance to earn back a percentage of the fee if they reached certain attendance targets.

The Davestator

SanoVitae wrote: »

I didn't say that they'd thrive, just that a lot more fitness enthusiasts would open their own gyms.

There is a definite gap there for them - many fail simply because they know lots about fitness and nutrition but little to nothing about marketing and how to run a profitable business.

Totally agree with that. People think they can make a fortune in the gym business, but there are much easier ways to get rich.
Rent, rates, massive insurance, staff, equipment ans power are huge costs that must be paid from day 1.

tomdublin

Gyms of all price classes will do well as long as they offer value and don't rip people off. The problem with many of the celtic tiger chains that are now bust or about to go bust is that they preyed on gullible and inexperienced consumers, charging way over the top for bady run, filthy gyms with bad equipment and gimmicky rubbish such as huge TV screens, computerized weights machines and mud spa treatments. It's similar to the many boom-time restaurants with pretentious decor and crap food that fortunately have disappeared.

mrpink6789

could be an option for any gym struggling...

http://www.thesun.co.uk/sol/homepage/news/3547705/Gym-fans-strip-off-to-get-fit-in-a-flash.html

SanoVitae

Maybe not....

Some disgusted bloke wrote:

someone with a big sweaty bum crack on a device you want to use. mmmm no thanks