Millennials Spend Big on Boutique Fitness

Carla Zuniga is punching a heavy bag as if she were preparing for a title fight, although she's a 35-year-old hair stylist doing her regular workout.

Zuniga isn't sweating at some low-fee, big-box fitness chain. Prevail Boxing is a 1,500-square-foot studio in Los Angeles that charges $250 for 10 classes.

"I think people in my generation are more willing to invest in what challenges them and makes them healthy," said Zuniga, who grew bored with cheaper, traditional gyms. "It's expensive to be healthy, but it's more expensive to be sick."

Costly coffee and artisanal avocado toast may be getting the blame for millennials' inability to afford a house. But those expenses pale in comparison with what a growing segment is willing to spend on fitness, abandoning $30-a-month gyms for trendy studios where classes for cycling, boot camp or yoga can run $30 a session.

Boutique fitness studios have become the only growth segment in an otherwise stagnant gym industry, according to separate research reports from the Association of Fitness Studios, fitness technology firm Netpulse and financial services firm Stephens.

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"When it comes to the younger generation, consumer items like car and home purchases are at an all-time low," said Greg Skloot, vice president for growth at Net-pulse, a San Francisco company that creates mobile apps for health clubs.

"They don't want an annual gym membership commitment and a contract," said Skloot, who co-wrote a recent report on fitness industry changes titled "The Club of 2020." "They want to be able to make physical fitness choices on demand, and they are willing to pay for it."

Spurred by popular start-up ClassPass and other online middlemen, young fitness addicts say their days of mindless treadmill workouts tied to just one gym are over. With a limited number of spots per class and advance reservations generally required, there's a mad rush to get into the hottest classes.

Rules can be strict where studios have waiting lists of a dozen or more people who are hoping someone doesn't show up for a class so that they can slip into the spot.

At Prevail Boxing, for example, cancellations with less than eight hours' notice cost $10 on top of the price of the class. Fail to show and there's a $20 fee.

Arrive less than five minutes early and you stand a chance of losing your class spot to someone else.

People sign up as early as two weeks in advance for a coveted spot with a sought-after trainer such as Cycle House's Nichelle Hines, whose title is chief ride officer.

Some instructors and owners have become celebrities, with reality TV shows and hundreds of thousands of Instagram followers.

Bart Kwan, 33, has 472,000 Instagram followers and 674,000 YouTube subscribers. Kwan regularly posts comedy and power-lifting workout videos that garner more than 1 million views each. Kwan's "Justkiddingnews" You-Tube channel has nearly 1.7 million subscribers.

Kwan said he wanted to re-create the atmosphere he once found in a mixed martial arts training facility.

"We were paying top dollar to go there," Kwan said, "but we considered that place our temple."

Grid Vongpiansuksa tried Kwan's Barbell Brigade in Los Angeles in 2014 and came back for the support.

"Sure, it's expensive," the 22-year-old said, "but in an environment like this, people are encouraging you, so it becomes you investing in the best you can be."

Boutique fitness studios mix small-group camaraderie and dojo-like commitment with coconut water and their own branded merchandise, such as Barbell Brigade's line of Dominate Humbly products and attire.

Instead of the professional athlete and bodybuilder photos that line the walls of some traditional gyms, there are selfie walls perfect for the Instagram-obsessed.

Skloot and other experts say the social aspect partially explains the willingness to pay so much more than at a traditional gym. Millennials may be ready to forgo an alternative social activity - going out for dinner and drinking and dancing, for example - where the cost can easily run $100 or more.

"You see your friends at the gym," Zuniga said, "and the next morning you don't wake up feeling awful. You wake up feeling great."

At Cycle House, which specializes in demanding cycling classes, it's not unusual to see members lingering outside in the courtyard and at the adjacent coffee shop. But the difficulty of the classes is the real draw, said Peter Marcos, a customer who liked Cycle House so much he quit his tech job to work there.

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