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Effect of COVID-19 on the Fitness Industry

This is an excerpt from Fitness Facility Management by Steven A. Trotter & Chris Stevenson.

The COVID-19 pandemic changed the world. No one saw it coming and could have ever adequately prepared for its impact. COVID-19 is, hopefully, a once-in-a-lifetime experience that led to some drastic changes. People were in lockdown at home. Businesses were forced to close. The pandemic altered the traditional workplace. Many people started working remotely. Consumer behavior dramatically changed. Some changes were temporary, but others affected how people behave, work, socialize, and address their health and fitness needs.

While all industries were affected, the fitness industry took a massive hit. Facilities of all types had to shut their doors. The length of closure varied depending on location. In some regions, facilities were closed for just a few months, but in certain areas, mandates forced facilities to shut down for over a year. Regardless of how long a closure was, the effect was devastating. Facilities lost a lot of revenue. Organizations had to lay off or furlough staff. Applying for governmental aid was a complicated process. Fitness facilities struggled. The industry’s immense frustration was that taking care of health and fitness, the same service that fitness facilities provide, was a key to diminishing the effects of the COVID-19 virus. That important service could not take place because they were closed. It was a real catch-22.

There were a few silver linings to the COVID-19 pandemic. The challenges presented brought our industry together. Competitors sat together to figure out the best practices to create clean and safe environments and worked together to increase advocacy efforts for the industry as a whole. Innovation skyrocketed. Closures forced facilities to provide more virtual and digital programming. While some facilities did this already, the pandemic amplified the practice tenfold. Exercising in the great outdoors also increased. Since facilities could not provide indoor services, many organizations created unique outdoor exercise areas and programming. The final item to note is that COVID-19 brought to the forefront the idea that taking care of health and fitness was essential. A Kaiser Permanente study of people with COVID-19 showed that regular physical activity provided protection from hospitalization, intensive care unit admission, and death. The study also noted that people who exercised consistently decreased their chances of severe outcomes from COVID-19 compared to inactive people (Sinclair and Kanakri 2021). Health, well-being, and fitness matter. Fitness facilities are essential!

As the world reopened, the fitness industry did not necessarily return to normal. The Health & Fitness Association (previously named IHRSA) is a trade association that assists the commercial fitness industry. Their research showed that as of January 1, 2022, 25 percent of all fitness facilities and 30 percent of studios had closed since the start of the COVID-19 pandemic (IHRSA 2022). Most experts agree that even as of this writing, we have not seen the end of COVID-19-related facility closures.

Community and collegiate recreation centers also had closures and setbacks from COVID-19. Many collegiate recreation centers had to furlough employees and were not allowed to refill positions as employees left for other opportunities. In one collegiate recreation center, 50 percent of the positions vacated during the pandemic were cut permanently. Funding for these nonprofit facilities also quickly became a problem. Collegiate recreation centers, which mostly operate as an auxiliary service on a college campus and are primarily funded by student fees, had to quickly decide what to do when college campuses shut down and sent students away. Solutions involved refunding student fees, furloughing employees, and additional drastic but necessary measures. According to a 2023 report on the state of managed recreation facilities, 83 percent of respondents are still taking action on reducing expenditures, such as increasing fees (51.5 percent), improving energy efficiency (35.5 percent), putting construction projects on hold (34.4 percent), decreasing hours (31.1 percent), or reducing staff (30 percent). In fact, 63.3 percent of collegiate recreation facilities reported reducing operational hours, while 36.4 percent were forced to cut programs, and some (4.6 percent) had to permanently close facilities (Tipping 2023).

Changes in the Industry

Facilities that did survive the pandemic still face long-term challenges, many of which may be permanent. Staffing is one of those challenges. Due to lower membership numbers and decreased revenue, many organizations rely on smaller staff. Team members are wearing more hats and taking on more responsibilities. In many cases, it unfortunately became a do-more-with-less situation. That mindset, rather than a do-less-with-less situation, contributed to the “great resignation,” which will be discussed in chapter 7. The other big issues regarding staffing are getting staff back and finding and retaining new team members. The pandemic created a massive change in this area. The great resignation, a shift in work priorities, career changes, remote working options, more employment choices, quiet quitting, and more all contribute to these challenges. Employee engagement and retention are other crucial topics to address. Dealing with rehiring, finding, and retaining talent are not the only issues concerning staffing. There is also a need for enhanced staff training.

As people returned to more activities following the acute phase of the pandemic, there was a need for more comprehensive staff training. This need stems from a few different issues, the first of which is that many organizations have smaller teams. As mentioned earlier, a smaller team means more responsibilities for each team member. This situation requires more training than in the past. More comprehensive training is essential so each team member can do their best work. Increased training takes time and effort. Consistent and enhanced training creates higher productivity, confidence, and morale levels, positively affecting employee engagement and retention. Finally, organizations have many more protocols and programs in the new normal. New requirements create a heavier lift on management and leadership to ensure that team members are trained to execute these changes effectively. These new protocols stem from a change in members’ postpandemic needs.

There have been many long-term changes to members’ needs and expectations that stemmed from COVID-19. The most obvious are enhanced cleaning protocols. Before the pandemic, it was not shocking to hear a member express delight when a facility was clean. A dirty facility was generally tolerated, and cleanliness was a perk. That is no longer the case. Members expect a facility to be immaculate. When government-regulated standards were required during the pandemic, members came to appreciate this level of cleanliness and now expect it. They want to see, smell, and feel clean when entering a facility.

Related to cleanliness are desired changes in facility design. During the pandemic, there were required changes to spacing. The 30-inch (76 cm) by 48-inch (122 cm) minimum clear space adjacent to fitness equipment required by the Americans with Disabilities Act was no longer sufficient for the new standards. Equipment was moved further apart or removed. Some facilities simply turned off every other piece of cardio so members could not use it. Others capitalized on the technology capability of networked cardio machines and implemented systems that would lock a machine after use until a staff member properly cleaned it, or they activated social distancing mode so the machine wouldn’t turn on if someone were using the equipment beside it. Group exercise classes had designated spots and attendance limits to keep a safe social distance between members. Whether members will be comfortable in more crowded environments remains to be seen. There are signs that they enjoy having a little more personal space, which affects facility design moving forward. Changing programming demands, such as virtual and digital options, outdoor offerings, and well-being-related services, also affect facility design moving forward.

Another area where members’ needs have changed is in programming expectations. The pandemic exposed the need for virtual and outdoor exercise options. Will members continue to want such programs moving forward? Early signs are that they will not replace the indoor and in-person gym experience, but they support it and probably will be expected by members, to some extent. A desire for this type of programming affects design elements as well. Facilities must consider creating spaces for personal movement experiences, such as filming or streaming virtual programs. They must think about equipping group exercise rooms with the technology needed to stream live classes in a hybrid environment. Considerations for outdoor programming need to be taken into account as well. Where will it take place? How can the outdoor area be designed to create a unique and desirable experience? Will the outdoor experience be an area for people to work out independently with equipment, or will it be guided programming from an instructor or trainer? The most important thing to understand with virtual and outdoor offerings is that they must be crafted as an intentional experience and done well. It is not enough to conduct a class on FaceTime or simply put equipment in a parking lot for people to use. If they are going to be options for members, these offerings must be well-thought-out and properly executed.

One other area that we have seen an uptick in post-COVID is health and wellness coaching, according to the American College of Sports Medicine (ACSM) (Thompson 2023). This trend demonstrates that members now see value in a holistic approach to health and well-being that involves goal setting and behavioral change. In that regard, facilities are adding more mind–body classes (such as meditation), health-oriented workshops, and mental health resources. Options like this were few and far between before the pandemic. Only time will tell what member demands remain when it comes to programming, but it is safe to say that these new desires will remain a part of fitness facility programming in some way, shape, or form.

These changes have prompted many organizations to rethink and restructure their business models. While specific business models will be explored later in this book, it is worth noting the impact of the pandemic on current models. Before the pandemic, many models focused on maximizing the number of memberships to be successful. With organizations unsure if they will ever reach the same number of people as in the past, many have shifted the focus to maximizing revenue per member. If there are fewer members, they need to spend more to hit revenue targets. Many facilities in the prepandemic era focused heavily on new membership sales. While sales are always a focus, member retention has become more critical than ever. With fewer people joining, keeping current members is now of utmost importance. New business models also include everything we have mentioned: Facilities must consider innovative programming, virtual components, new technology, and outdoor offerings, and they must determine what differentiates them in the marketplace. Size, location, and design will also be reevaluated based on what makes the most sense in this new normal.

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