The Growing Gym Industry in the United States

Liam Gill
BCOM 214
December 12, 2021
 Table of Contents

Industry Summary ……………………………………………………………….…...…………. 1

Industry Trends……………………. …………………………………………………………… 1

Revenue Before/After COVID …………………………………………………………...1

Size of Market .…….………………………………………………………..……….…...1

Figure 1 ………..….………………………………………..……………….……….….. 1

A Silver Lining …….………………………………………………………..……….…...2

Competitive Landscape ………………………………………………………………….…....... 2

Most Influential Players …….…………………………………………………..………. 2

Highest Costs for Gyms …….………………………………………..……………...…...2

Market Share Concentration ………..….…………………..……………….……….….. 2

Figure 2 …………………....………..….…………………..……………….……….….. 2

Competition is High and Increasing …...…………………..……………….……….….. 3

At Home Workouts/Home Equipment ……………………………………………....…………. 3

Historically ……………….……………………………………………….....……….….. 3

2020 ………….…….…………………………………………………..……….…........... 3

In the Future ……….…………………………………………………..……….…........... 3

Conclusion ……………………………………………………………….…...………………… 3
This document shows useful information about the market of gyms as well as at home gyms and
their respective industries across the United States. Gyms have been around forever but as time
goes on their popularity keeps increasing due to the general populations desire of being in better
shape also increases. Since social media and everyone being able to show themselves to the
world at the touch of a button is possible nowadays, it is even more popular to look as good as
you can. The following information will help one decide whether to invest in this growing
market. This report includes Industry Trends, Competitive Landscape, and At Home
Workouts/Home Equipment.

Industry Trends

Revenue Before/After COVID

The COVID pandemic has had a huge temporal impact on the revenues of Gyms since the
shutdown of the country. According to Ryan Roth in Gym & Fitness Franchises based on data
from the industry it has been shown that revenues for gyms across the United States has
“massively decreased by 28 percent in 2020” during the pandemic (Roth, 2020). This is due to
the fact that since gyms contain a lot of people in a very small building as well as everyone
touching the same equipment and breathing around each other gyms were forced to close down
for an extended period of time. However, revenues have bounced back during 2021 and are
expected to rise again (Roth, 2020).

Size of Market

The market is expected to make large jumps in total fitness units sold as well as some of those
units being placed in home gyms (Icon Group International, Inc., 2019). This is because there is
a steady upward trend over the near past of people becoming more and more interested in staying
in shape. This is because health and fitness are trendy nowadays due to increased availability of
facilities as well as social media (Hoffmann & Mai, 2015).
A Silver Lining

Even though COVID hit gyms hard, a higher percentage of people are caring more about being
in shape so it should rebound stronger than before (Roth, 2020). Not only this but due to the
pandemic health consciousness has been looked at much more seriously and is becoming a
popular trend. Which will in turn boost revenues back up to the level they were at in 2018 and
2019 while presumably increasing them in later years (Roth, 2020).

Competitive Landscape

Most Influential Players

The market is vastly spread out when it comes to who owns the most gyms, which makes it a
very competitive market. The biggest player in the game right now is Fitness International LLC
which is the parent company to gyms like LA Fitness and they have the largest market share at
5.5% of all gyms in the nation (Le, 2021). This shows that even the top dog of the industry does
not own very much of the market.

Highest Costs for Gyms

The highest cost for gyms to operate is their wages paid. In the entire gym industry, the cost of
wages comes out to be 35.1% whereas the second highest cost is rent at 6.8% (Le, 2021). This is
because when running a gym, you have your initial cost of equipment and that equipment
depreciation, but you have a constant, high cost of paying all of your employees as well as
monthly rent for the location of your gym.

Market Share Concentration

Even though the largest company only dominates a small amount of the industry, major players
dominate the market as a whole. This is because there are many major players who have various
locations spread across the United States (Roth, 2020). The main reason for this is because gyms
carry reputation, which is why most people choose the gym they do. Not only that but the more
money you must open a gym the nicer building and more amenities you will be able to put in
your gym initially.
Competition is High and Increasing

Since the gym is a trendy and growing market in todays society there is also high competition
with increasing demand. Especially since COVID and social media demand for gym and fitness
services have grown in the last 15 years (Roth, 2020). Since everyone is worried about health
and looking there best for their Facebook photos going to the gym and training is becoming a
fad. This in turn leads to more competition in the market since the market as a whole is growing.

At Home Workouts/Home Equipment

Historically

When looking at home workouts as well as home workout equipment it did not use to be a big
thing, however since times have changed it has become much more popular. Especially because
at home workouts were way less prevalent pre-pandemic (Nettescheim, 2021). Since COVID has
hit it has spread fear across the United States about being in bad health and so many people are
focused on working on good health habits which includes working out. Not only that but the
social media era took off even more during the pandemic and there are a lot of people online who
post videos and essays on there workouts since then (Nettescheim, 2021).

2020

Since COVID hit in early to mid-2020 it has had some weird effects on the fitness market. The
gym industry itself went down by 28% in revenue as discussed earlier, but the gym equipment
industry revenue went up by 4.5% due to the shutdown and demand increasing (Ristoff, 2021).
This is, again, because more people become health conscious in conjunction with the fact that as
that happened, gyms had been closed for months in most places.

In the Future

Even though the market for gym equipment had a great year in 2020 due to the pandemic,
equipment sales are still expected to increase in the future. This is as long as another shutdown
doesn’t occur and hinder the production side of things which is the only issue that came from the
shutdown in 2020 (Roth, 2020). This is because the steady trend of living a healthy lifestyle will
continue to grow in American culture for as long as social media and the media in general push
it.

Conclusion

This report covered an overview of the gym industry and the exercise equipment industry. It does
so by discussing Industry Trends, Competitive Landscape, and At Home Workouts/Home
Equipment. Although gyms took a very heavy revenue hit in 2020 it is expected to make a
comeback, and that same revenue hit transferred as revenue gained for gym equipment so that
people could workout at home. For more information about the gym industry please direct all
inquiries to liamgill@email.arizona.edu.
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