As Fitness Studios Emerge, Health Clubs Must Adapt

It seems as if training studios have become as common as the ubiquitous Starbucks. With thousands of studios ranging from CrossFit boxes to independent training studios to franchises, they really are on almost every corner.

It Seems There Is A Cross Fit Box Or Fitness Studio On Every Corner These Days"The industry is changing," says Michael Scott Scudder, founder of the Fitness Business Council. "We've seen a shift to specialized studios and it is going to keep growing. It's only a matter of time before someone — maybe a former group exercise coordinator or even one of the big guys — decides to launch studios that offer all the traditional group exercise classes and takes that segment of the population from the traditional clubs."

The evolution of the industry and traditional health clubs' approach of being everything to everyone, has opened the door for smaller players to nibble away at the market share.

"The industry is continually evolving from a more simplistic and universal approach to one that is more specific and specialized," says Bill McBride, president and CEO of fitness consulting company BMC3, and a member of IHRSA's board of directors. "This is being driven by an increased sophistication of providers and an appetite for entrepreneurship. This is also being driven by the industry’s lack of ability to penetrate deeper into the population."

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As competition continues to come from these niche players, some industry experts have likened it to the aerobics boom of the 1980's. Fast-forward 30 years and traditional health club owners are once again wondering what they can do to stay a step ahead of the studios.

"I’ve seen research that states 25 percent of club members have gone to classes outside of their club and it has been reported that as many as 45 percent of studio members maintain a traditional club membership," says McBride. "Traditional clubs need to reevaluate their programming — design each program as a business unit, implement a business plan, a marketing plan, hire for that business unit and execute as if their business depended on each offering."

Whether it is because the small studios are doing the fitness end of the equation better, or the fact that people are just looking for something different than running on a treadmill, it seems that the draw of these studios is something people are willing to pay for, and studio owners are capitalizing.

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William Rundle, one of the owners of Boston-based Mission Fitness is in the middle of revamping the direction of his recently purchased club. The new owners want to ensure they are delivering what the public is looking for.

"As a small club of about 2,000 square feet that has had various incarnations as a personal training studio and a 24-hour fitness club, we can draw on those aspects and try to provide an experience that bigger clubs can't," he says. "We are taking out some of the traditional club feel of the last several years and concentrating on functional fitness, great classes and great personal training. We can't be everything to everyone, but we can be great at what we do."

McBride says that if done correctly, traditional independent health club models can take some of that advice and succeed by incorporating aspects of studios to which people are flocking.

"As a rule, it is never a good idea to simply add more mediocrity to anything," says McBride. "There is a big opportunity to redefine offerings and make each one stand alone in excellence. I’ve seen several clubs add hot yoga, specialized aquatics, CrossFit and Les Mills. Having separate spaces with differentiated brands can be a great approach, along the lines of 'medical arts' buildings with several different medical specialties under one roof, but all independent, creating a medical destination sometimes with shared central services. They can do this in separate buildings or by incorporating the club-within-a-club concept that has been talked about for years."

While studios are providing a challenge to traditional fitness and multipurpose gyms, owners who can create a distinct user experience inside their walls may be able to weather the storm and define themselves as the best of both worlds.

RELATED: Three Ways to Learn What Your Members Really Think About Your Club

RELATED: Join other independent club owners for the iClubs Conference in San Diego

John Agoglia has spent nearly two decades either working in health clubs or writing about them. He currently writes for several digital and print publications in and out of the fitness industry.

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