NYC Fitness Industry Plots Comeback After Dark Year of Closures

(Bloomberg) -- Members of New York City's fitness industry who sweated out the pandemic say gyms are bouncing back after more than a year of closures and persistent struggles to retain clients.

The resumption of in-person instruction in recent months -- aided by increasing vaccination rates -- has helped bring back many clients and rekindle the sense of community that can come with gym classes, according to leaders of Equinox and other studios.

“Times are definitely a lot better,” Amanda Freeman, founder of fitness studio Strengthen Lengthen Tone LLC, or SLT, said at a virtual event Wednesday sponsored by Bloomberg LP on the future of New York City's fitness industry. “For certain types of workouts -- one of which is SLT -- people really need to go to a studio.”

The industry is trying to regain its footing after the pandemic upended Americans' exercise habits. While broad economic lockdowns were a boon for home-based exercise companies such as Peloton Interactive Inc., in-person gyms were hit hard. About 17% of the 40,000 health clubs that operated in the U.S. prior to the pandemic were forced to shut permanently by the end of 2020, according to an industry lobbying group.

Studios in New York have faced challenges including capacity restrictions that were more stringent than those for many other types of businesses. Gyms in the city were allowed to reopen last September at a third capacity, but group classes remained shuttered until March, when they were originally permitted to begin hosting customers at 33% capacity.

While those capacity restrictions have since been lifted entirely, the delay prompted a group of studio owners to sue the city and state to allow group fitness class to resume, claiming they were losing members to facilities in nearby Nassau and Westchester counties.

The roughly yearlong closures led about 40% of studios in New York City to shut their doors for good, according to the United States Fitness Coalition. Freeman's SLT had to shutter four city locations during the pandemic because of lost revenue.

“It was a bit of a bloodbath,” Freeman said. “We all had to lay off our employees for the survival of our business.”

Traffic Rebound

Now, vaccination rates and easing restrictions are providing a boost. Equinox said in May it had seen a 55% increase in new membership sales in New York after lifting its mask mandate. Studios inculding Solidcore, 305 Fitness, Barry's Bootcamp and others also have moved to full capacity, maskless classes, encouraged by Americans' growing comfort being around other vaccinated people. In May, traffic into fitness centers nationwide was 83% of January 2020 levels.

“The clubs are full, we're breaking records,” said Simon Belsham, president of Equinox Media. “We're almost back in many of our clubs to where they were pre-pandemic.”

Gyms will need to find an equilibrium with home-based workout programs, industry leaders acknowledge. After all, many people who bought Pelotons aren't giving them up.

Some instructors, too, enjoy teaching remotely, making it a challenge for studios to bring them back. Ally Love, chief executive officer of The Love Squad and host of the Brooklyn Nets, said when she leads Peloton classes, she has a studio right in her home.

“When we were supposed to be socially distanced, I had 25,000 people live in my living room,” she said.