As the fitness industry continues to evolve in the post-COVID era, gyms, studios and wellness centers are finding themselves at a series of crossroads. The landscape is rapidly changing, with key trends emerging that could make or break a business model.
At Parallel Path, we’ve seen firsthand how these shifts are affecting our clients and the broader market. Whether you’re managing a high-end boutique gym or a budget-friendly fitness chain, understanding these trends is crucial to staying competitive.
The Engagement Problem
One of the most significant trends we’ve observed is the growing pressure on higher-cost gyms to maintain member engagement. These establishments often offer premium services, state-of-the-art equipment, and personalized training programs, but the price tag comes with high expectations.
Members paying a premium are looking for more than just a place to work out; they want an experience.
Failure to deliver on this expectation can lead to membership drop-offs. According to 2023 IHRSA Health & Fitness Consumer Report, there are currently 184.6 million gym and fitness club members in the United States with an average gym retention rate of 60.6% and an average membership duration of 3.3 to 4.7 years. Boutique fitness studios that offer a more personalized and intimate experience maintain a higher retention rate closer to 70%
These statistics alone underscores the importance for fitness centers of all sizes to foster a strong sense of community and offer unique, engaging experiences to retain members. Whether through specialized classes, events, or personalized wellness plans, higher-cost gyms especially must continually innovate to keep their members coming back.
Squeezed Margins
Margins are tightening across the fitness industry, and this is true for both high-cost and budget gyms. The COVID-19 pandemic accelerated the shift to digital fitness, forcing many traditional gyms to rethink their business models. Now, as the world returns to in-person activities, gyms are grappling with how to balance their physical and digital offerings.
The competition is fierce, and everyone is feeling the squeeze. Strategies focused on margin improvement, attrition management, and win-back campaigns have become more critical than ever. Gyms that have successfully navigated this challenging environment are those that have diversified their revenue streams—offering digital memberships, branded merchandise, and wellness services like nutrition coaching.
Bridging Digital and Physical Fitness
The fitness industry is evolving to accommodate the increasingly “multi-modal” preferences of consumers. This trend, which has accelerated since the pandemic, involves not only the integration of digital and in-person experiences but also the blending of various physical fitness options. Today’s fitness enthusiasts are more likely to mix and match different workout environments and modalities, whether that’s attending classes at a boutique studio like Orangetheory, participating in CrossFit sessions, or practicing yoga at a specialized studio.
A McKinsey report highlighted that 50% of fitness enthusiasts were less happy with their pandemic-era routines, with 95% of fitness club members reporting missing at least one element of working out at the gym, and more than 60% of Americans who exercise regularly say they will likely prefer a mix of working out at a gym or studio and at home in the future.
Gyms that have embraced this multi-modal approach by offering hybrid models—such as virtual classes, on-demand workouts, and personalized digital coaching in addition to their physical facilities—are thriving. This strategy caters to members who enjoy the flexibility of working out from home while also providing resources for those who prefer in-gym experiences.
Building Stronger Communities
Community has always been a cornerstone of the fitness industry, but it’s becoming even more critical as gyms seek to differentiate themselves in a crowded market. Whether it’s through social media engagement, member events, or branded challenges, gyms that foster a strong sense of community are seeing higher retention rates.
For example, budget gyms like Planet Fitness and other HVLP gyms have successfully created a loyal following by promoting an inclusive, non-intimidating environment. On the other hand, more amenity-driven gyms like Lifetime have focused on creating tight-knit communities where members feel like they belong to an exclusive group. In both cases, the sense of belonging and connection is what keeps members coming back.
Navigating the Path Forward
As we look to the future, fitness brands must continue to innovate and adapt to stay relevant. The trends we’ve discussed—engagement pressure, margin challenges, hybrid models, and community building—are shaping the industry and will continue to do so in the coming years.
For brands in the health and wellness sector, the key to success lies in understanding these trends and leveraging them to create meaningful, lasting connections with their audience. At Parallel Path, we’re committed to helping our clients navigate this ever-changing landscape. Whether you’re looking to enhance member engagement, diversify your revenue streams, or build a stronger community, our team is here to support you every step of the way.