One in four health clubs could go out of business by the end of 2020 without federal assistance to help alleviate financial pressure caused by COVID-19 and related closures and restrictions on operations, according to IHRSA, the trade association for commercial club operators.
Thirty-nine percent of independent gyms could go out of business without federal relief, according to the Community Gyms Coalition (CGC), a group representing more than 15,000 community gyms in the United States. Its data came from a survey of 1,000 owners of local, independently owned gyms in November 2020, with 413 responses to those specific questions.
Closures have already started. A September Yelp report on business closures showed that from July to September, the fitness industry had a 23 percent increase in closures with 6,024 total closures, 2,616 of which were permanent.
Data from major payment processing firms showed that 15 percent of gyms had permanently closed as of Sept. 30, according to IHRSA.
IHRSA estimated that the industry has lost more than $15 billion in revenue as of Oct. 1 plus 480,000 jobs.
Rick Caro, a 40-year veteran of the industry and president of Management Vision, Inc., told IHRSA that the COVID-19 pandemic has been the toughest time for the industry in its 50-year history.
“COVID-19 is affecting the businesses, their members, employees, and the community at large,” he said. “Clubs are struggling with no real government support as a whole.”
Although some health clubs and studios received funding through the Paycheck Protection Program, the relief has not been enough for many, according to IHRSA.
That’s why the association is pushing health club operators from all segments of the industry to write letters to their federal representatives to support the Health & Fitness Recovery Act (H.R. 8485) filed by U.S. Reps. Mike Quigley (D-IL) and Brian Fitzpatrick (R-PA). The act would give $30 billion in grants to fitness businesses struggling through the COVID-19 closures and restrictions.
The Community Gym Coalition survey asked respondents how many thought they would survive through 2021 if the COVID situation did not improve and they did not receive meaningful assistance. Thirty-nine percent said they would not survive. When the group asked if they would survive if a federal relief program gave them a no-strings-attached grant for their full-year 2019 revenue (minus any 2020 revenue/grants), 88 percent said they could survive through 2021.
“The clock is ticking for our leaders in Washington to provide community gyms the relief they need to survive,” Debra Strougo, co-founder of Row House and member of the Community Gym Coalition Advisory Board, said in a media release. “This new data not only validates the problem – with one in three gyms at risk of imminent closure – but also highlights a common-sense solution that would help the vast majority survive. Because of industry-specific closures and restrictions, thousands of local, independent gym owners have their hands tied as their savings vanish and debt skyrockets. Unless Congress provides industry-specific support to redress the industry-specific harm caused by these closures, thousands of small and mid-size, locally-owned gyms are going to close forever.”