2023 Global Report Reflects Optimism for Fitness Industry’s Future

Looking at the challenges that health club, gym, and studio owners and operators worldwide face today, you might think they would have a dire outlook on the future of their facilities. Those challenges are plenty: lingering effects of the pandemic, supply chain issues, proposed value-added tax rate increases, higher energy costs, higher interest rates, inflation, a tight labor market, wars, weather events, and fears of a recession.

However, many executives have a broader and longer-term view of the future, one that recognizes that economies and consumer sentiment fluctuate but that changing consumer perspectives about health and fitness can counterbalance and perhaps overcome some current challenges.

Club and studio operators are optimistic about 2023, relative to 2021 and 2022, according to a recent survey of IHRSA member clubs for the 2023 IHRSA Global Report. Of significance, about 80% of respondents expect membership and revenue to grow by more than 5% in 2023. Although this preview will focus on challenges and facilities experiencing growth, more industry data, trends, and information on advocacy efforts are available in the report.

Offering the most optimism among executives are studies showing that consumers have an increased desire to improve their physical health and well-being. Eighty-six percent of consumers in more than 50 countries and territories are motivated to do more about their physical health and well-being today than in the past, as indicated in a report by IPSOS. Consumers desire this most in Asia, Africa, and Latin America, markets with lower membership penetration rates and, therefore, room for expansion by operators inside and outside those regions.

In the United States, 64% of Americans said that wellness is more important than other leisure activities, and 87% said they maintained or increased wellness spending in 2022, according to the Mindbody 2023 Wellness Index.

A Garmin report found that as people have returned to their pre-pandemic fitness habits, more of them are returning to indoor fitness where they can participate in activities they couldn’t do at home. As more employers require workers to return to the office, it could lessen the strain on fitness facilities in central business districts still stressed by the work-from-home trend.

Although all projections look up for the health and fitness industry, challenging factors stand in the way:

• Inflation

• Global gross domestic product

• Economic regulations

• Rebuilding the boutique studio segment

Post-pandemic Challenges for Health & Fitness Facilities

Realistically, all of the optimism can’t completely negate the damage the past three years have inflicted on the health and fitness industry—and businesses in general.

Since the turn of the 21st century, global inflation has remained between 3-5%. Even in 2020, the global inflation rate was just 3.25%, but it increased to 4.7% in 2021 as supply chain issues and consumer demand increased, based on data from Statista. In 2022, global inflation rose to 8.75%—the highest annual increase since 1996—because of a series of obstacles, including the war in Ukraine, increased food and energy prices, consumer insecurity, and economic instability in many countries.

Inflation has lessened in many parts of the world, but through the end of 2023, economists anticipate it will continue to be high, as reported by Statista.

The International Monetary Fund (IMF) recently offered its weakest forecast on global gross domestic product (GDP) growth in more than 20 years, and it projects that advanced economies in North America, Europe, and Asia will have sluggish GDP growth through 2024.

Some emerging fitness markets are contending with economic and regulatory headwinds, including the push to increase the value-added tax (VAT) rate in countries such as Chile and Romania that could stall long-term industry growth.

The hardest hit segment during the pandemic was boutique studios, which impacted the industry overall since nearly 40% of members belonged to studios prior to COVID—10 percentage points greater than fitness-only clubs, the next largest industry segment. About 30% of boutique fitness studios permanently closed because of the pandemic.

Studio membership in the U.S. decreased by 20.5% from 2020 to 2021 and 36.8% in total from 2019 to 2021, which equates to the loss of more than 9 million members, as noted in the 2022 IHRSA Health Club Consumer Report. Details about how this segment has fared in the U.S. during the past year will be included in the 2023 IHRSA U.S. Health Club Consumer Report when it is soon released.

Growth in the Industry Is Still Happening

Despite these challenges, some chains and facilities report overwhelmingly positive numbers in membership levels and units.

The report, which ranks membership and unit growth from company responses and other sources, found that large chain operators and franchisors are leading growth. Filings from publicly traded companies show that lower-priced operators and firms with a portfolio of multiple brands have improved performance over the first six months in 2023 relative to the same time in 2022.

Between 2021 and 2022, many of the largest fitness club operators grew their footprint, opening new locations across the globe. Anytime Fitness, headquartered in the U.S. but with clubs worldwide, had the most open units at the end of 2022—5,143.

Survey responses reveal the top 25 operators by membership posted an average annual membership growth of 15%. U.S.-specific membership trends will appear in IHRSA’s soon-to-be-released 2023 Health Club Consumer Report.

U.S.-based Planet Fitness claimed the top spot in a ranking of clubs by membership, reporting 17 million members at the end of 2022, up 12% from 15.2 million in 2021. At the end of the second quarter of 2023, it reported 18.4 million members.

Basic-Fit in the Netherlands experienced a 51% increase in members from 2021 to 2022, the highest membership increase reported in the survey. That took memberships from 2.22 million in 2021 to 3.35 million in 2022.

The 2023 IHRSA Global Report includes more insights from federation leaders and industry partners, research firms, point-of-service providers, and others broken out into five sections. Purchase the report to gain knowledge about:

• news that impacted the industry,

• the size, scope, and overall health of the industry in different regions,

• trends and opportunities worldwide,

• data on key players,

• suppliers offering innovative products and services,

• and so much more.