Why gyms are leading leisure

Faced with ongoing challenges from the cost of living crisis, consumers are considering where to make cutbacks. Over 77% of respondents to our recent consumer survey have seen an increase in their regular outgoings, with inflation being the primary cause. As a result, 38% plan to decrease or stop their social activities at some point this year. However, gyms are faring better than other leisure and food and beverage (F&B) sectors. Despite 75% of respondents feeling neutral or somewhat worse about their personal finances, 73% of respondents plan to increase or maintain the frequency of their gym visits. 

Figure 1: How will the frequency of your leisure activities change in 2024?

Across all respondents, no age group showed a notable willingness to stop or reduce their gym visits. This highlights that gyms are firmly considered an essential social and wellness pastime, particularly in the era of working from home. Respondents were more willing to decrease or stop visits to restaurants and casual dining outlets, or other social events such as live comedy and competitive socialising, due to the rising costs. This is likely due to exercise and wellness being considered an essential part of a weekly routine; 87% of people who do exercise, do so at least once per week.

Survey respondents are more willing to maintain their monthly gym costs and will reduce one-off treat activities, as they appear prohibitively expensive or are not in respondents’ monthly budget. Across our survey area, 46% of respondents state that their income has remained the same or decrease in the last year. While discretionary spending remains squeezed, health and fitness clubs must ensure to offer value for money and not increase costs so much as to alienate consumers. Consumers with a gym membership are more likely to be motivated to use it and exercise – yet if consumers do not see value for money and cancel memberships, they are unlikely to rejoin, which will impact operators’ bottom line.

Figure 2: Why will you be doing less of the below activities in 2024?

Younger respondents (16-24 year olds), in particular, plan to increase frequency of gym visits, highlighting the importance that Gen Z place on health, wellbeing, and the social aspect of frequenting a gym. At the other end of the spectrum, 55+ year olds are the least likely cohort to decrease or stop their gym visits all together. If health and fitness operators can cater their memberships and offers to appeal across the generations, operators should record an increase in membership retention rates and revenues. Flexibility will be key in attracting and retaining clients, particularly for members who have adopted hybrid working.

Gyms at the luxury end of the spectrum are showing the strongest recovery with added spa, racquets and outdoor pool facilities that cater to the whole family as well as metropolitan singles. This is evidenced by the renewal of annual contracts despite the growth of the budget model with flexible monthly subscriptions. It is the squeezed middle and those boutiques urban work out classes who are finding the current economic environment challenging.

During the Global Financial Crisis (GFC), gym memberships fell as individuals looked at ways to cut discretionary expenses, yet this trend is not being echoed in 2024. Gym membership numbers are broadly comparable with pre-COVID levels (16% of UK adults held one in 2023, compared with 18% in 2019), according to Mintel. During the COVID-19 lockdowns, people turned to at-home workouts and health and fitness apps, yet this trend did not stick; once lockdown measures were lifted, and consumers were more aware of the importance of health and wellness, consumers returned to gym-based workouts (market value increased by 11.5% in the 12 months up to March 2023, the largest increase recorded over a 12-month period). Gym operators also recorded a 3.9% increase in the number of members during the 12-month period. Like a number of leisure operators, some gym operators have struggled due to rising energy and staff costs. The State of the Fitness Industry Report 2023 quoted that the industry recorded a 0.9% drop in the total number of gyms and health clubs in the UK. Nevertheless, engagement, community and connections will continue to drive people to exercise classes, whether they choose a low-cost gym or boutique luxury, respondents are continuing to prioritise health and wellbeing, showing that gyms are leading the leisure sector.