The Fitness Divide

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Within the past year alone, the for-profit health-club industry amassed almost $32 billion in profits, growing almost 8% compared to previous years. Health and fitness have undoubtedly emerged as trends that parallel stereotypes of American success and ideals. The rise in luxury fitness businesses and streaming home fitness with corporations such as Peleton, Soul Cycle, Equinox, Barry’s Bootcamp, Orange Theory, and more have largely dominated the expansion seen within the fitness industry. These institutions have also disrupted existing fitness models, such as traditional gyms. These luxury fitness brands compose around 40% of the existing fitness market, experiencing rapid growth of 121% in market capture in just four years as opposed to just 18% expansion for traditional gyms. The extreme growth of the luxury fitness industry has been accompanied with an explosion of budget gym chains, such as Planet Fitness. With Planet Fitness’ infamous $10 per month membership with 33% growth in 2019 it has managed to capture of 17% of the overall market. The combined effect of exponential growth in luxury fitness coinciding with growth of cheaper gym chains like Planet Fitness have created a hollowing out of mid-price fitness industries. The reduction in options in the midsection of the fitness industry can prevent certain populations from accessing the fitness industry and health education. Therefore, this growing division in the marketplace can have numerous implications for American society in terms of social capital, health, and social interaction in community recreational spaces that can exacerbate social inequality.

Sustainable Growth Model of Boutique Fitness

The growth of luxury fitness indeed has been a large driver of the health and fitness industry. Its model is self-sustaining and is aided by the concurrency of luxury gyms and streamable fitness. As brick and mortar malls in America diminished, luxury and boutique fitness have created “fitness clusters” within these structures in order to promote growth. From a $39 spin class at Soul Cycle to a rejuvenating $23 class at CorePower, a $38 strength session at Barry’s to a $185 per month membership at Equinox, each sector of luxury fitness is able to benefit by providing slightly different luxury services that can be utilized in combination with each other, rather than in direct competition. By structuring themselves geographically on top of each other in a form of “geobulk” , they ensure a consumer base that is willing and used to paying these prices in these areas. The geographical concentration these industries also capitalizes on creating a new social community with congruent values and provides social motivation to continue to partake in this new community. Participating in these various fitness classes creates a sense of “self-branding and status symbol,” which incubates a social community that is committed to starting their mornings with intense, boutique training and creates a social pressure to continue to return. These models also function on a class or to month payment basis, and attach an exclusive and particular lifestyle and demographic to fitness, which provides flexibility and a social contingency that traditional gym models lack. However, concentrating luxury gyms in a singular area and fostering a social community within them creates an imbalance by pricing out less affluent members from partaking in these social spaces.

Hollowing out the Middle

Similar to other consumer facing industries, this trend has caused a divergence in favoring the growth of either luxury fitness or extremely cheap gym membership options. The separation of the midmarket has also capitalized on extreme consumer attitudes towards fitness: the higher end capitalizing on an extreme, pre-existing dedication to fitness as a routine, while the lower end prioritizes “no judgement” and self-guided exercise regimen without a social component. This has allowed for less market share for traditional, mid priced health club and community fitness spaces. This is seen in figure 3, with the plateauing of health club dues in comparison to botique consumer spending. This allows for gyms entering the market to have more incentive on capitalizing on the extreme ends of the spectrum, rather than attempting to fill the midmarket gap.

Figure 3: Boutique Customers Spending More, but Health Club Dues Are Flat

Social Impact

With the minimization of mid-market fitness gyms and industries, the dynamic of traditional fitness spaces have altered from community based recreation facilities, such as YMCA’s or Boston Sports Clubs, to the extreme offerings of the fitness spectrum. This trend has in turn exacerbated social divisions and has eliminated spaces for classes to interact and has restricted cultural and social exchange. The limitations on accessibility to luxury fitness on geographic is determined on the basis of geographic concentration, with wealthier areas having significantly more fitness employees compared to less affluent areas. It was also found that “creative” portions of the population with denser concentration in the tech industry also had greater concentration of fitness instructors than those of working classes. This in turn limits the ability for all classes to have equal accessibility to fitness opportunities, and can have runoff effects in healthcare burdens for poorer populations. Combined with over 45% of America’s youth lacking accessibility to playgrounds, community recreational facilities, or park systems, many Americans are unable to easily access communal spaces that promote recreation or guided exercise easily without having to pay monthly commitments to self-guided, privatized gyms.

The result of this gap eliminates the ability for places in which different sectors of our community can come together for recreational purposes, like a YMCA, Boston Sports Club, or community center facilities. Supported by this trend, we become more homogeneous and culturally separated, creating societal inefficiencies and exacerbating social inequality that can have countless runoff effects. These externalities include determinants to health, education, and having spaces in the community in which individuals are striving towards a common goal with the support of others. With a decrease in the amount of spaces in which our society can come together to fulfill a basic requirement of human existence, we prevent ourselves from reaping the economic and social benefits that coexisting spaces can provide. In turn, this trend has the effect of completely privatizing and polarizing the fitness industry, which results in the lost social capital and ways in which we can promote social as well as economic growth.

In taking into account the increasing polarization of the fitness industry and the negative effects it can have on social capital and our nation’s well-being, it is imperative to consider new ways to capture the mid-market within the fitness industry while simultaneously bridging the gap between low and high end fitness options. In order to mitigate this polarization, it would be beneficial to aim new fitness industries to be increasingly more decentralized than traditional gyms, like BSC’s or Life Time Fitness. The new structure of gyms should offer singular, specialized classes in a geocentric location while decreasing focus and resources in their traditional, free-gym space. These facilities should provide an affordable, flexible pricing model that has a sense of a social lifestyle and allure that Soul Cycle and Barry’s have that will encourage continued customer return. In addition, we should also focus on developing effective fitness models in community spaces. These programs should utilize existing community spaces, such as parks or community centers, that offer classes with an affordable pricing model. This in turn will foster community engagement that encourages individuals to continue to return while simultaneously establishing a space in which various demographics of our community can interact and coexist.

More posts by Hannah McNeill.
The Fitness Divide
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