PRODUCT NEWS
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| 83% of US gyms survived 2020, but revenues fell 58% and a million people lost their jobs |
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| 05 Mar 2021 . BY Tom Walker |
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| Gold's Gym was one of the biggest US companies to file for bankruptcy in 2020, being bought by Rainer Schaller's RSG Group / Shutterstock/Marboo Whisnant |
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US fitness industry revenue dropped 58 per cent during 2020 – from the US$35bn all-time high recorded in 2019 to US$15bn.
The figure comes from industry body, IHRSA, which estimates that the industry lost US$20.4bn in 2020, just one year after the sector generated its highest-ever revenues.
The US has been the country hardest hit by the coronavirus pandemic, with nearly 30 million cases and around 533,000 recorded deaths (at the time of writing).
Health clubs, gyms, and fitness studios in all states were forced to close their doors for at least one month in 2020.
In many states – including California, Oregon, and Washington – the closures persisted for most of the 12 months of 2020.
Mandated restrictions in some states allowed limited operations, ranging from outdoor or virtual-only services to a maximum of 50 per cent capacity.
IHRSA figures indicate that 17 per cent of fitness facilities closed permanently in 2020, leaving 83 per cent still trading.
Eight major fitness companies – including Gold’s Gym, 24 Hour Fitness, and Town Sports International (TSI) – filing for bankruptcy and in total, more than 1 million industry employees lost their jobs.
Some segments of the fitness industry have been hit harder than others. Data from major gym and studio payment processing companies reveal that 19 per cent of boutique fitness studios permanently closed, as of December 31, 2020.
Meanwhile, 14 per cent of gyms and traditional health clubs have ceased operations.
Commenting on the IHRSA figures, Brian Smith, MD of consumer investment banking at Piper Sandler Companies – an investment bank and institutional securities firm – said: "One has to remember that health clubs are largely fixed-cost businesses.
"A decline in revenue to such a large degree has devastating consequences, both short- and long-term.
“We are going to see lasting effects as operators look to rebuild cashflow, recapitalise their base business, rehire staff, and so forth.”
• To read more about the IHRSA report on the pandemic's effects, click here.
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