The Reality Check Your Fitness Business Needs: What the Data Actually Says About Survival
By Lee Robinson, VP of Sales, ABC Fitness
We need to talk.
I spent three days at T10 this past September, sitting across from gym owners, studio operators, and franchise executives who are all asking the same question: “What in the world is actually happening in our industry?”
The answer isn’t what most people want to hear. But it’s what you need to hear if you want your business to still exist in two years.
The Numbers Don’t Lie (Even When We Want Them To)
Let me start with the uncomfortable truth that came out of our comprehensive market analysis: if you’re still operating like it’s 2019, you’re already losing.
Planet Fitness, the king of budget fitness, just pulled off their first price increase in 25 years – from $10 to $15 for their Classic Card. That’s a 50% jump, and guess what? Their membership kept growing. Meanwhile, Life Time is reporting $815 average monthly revenue per member and posting 18.5% revenue growth with 422% net income surge.
The message? Price isn’t the problem. Value perception is.
But here’s where it gets interesting: even large multi-location operators with their army of boutique studios, achieved flat growth despite opening 50-100 new locations. More studios, same revenue. That should terrify anyone thinking that simply expanding footprint equals success.
Your Members Aren’t Who You Think They Are
The demographic revolution happening right now is either your biggest opportunity or your funeral march. Gen Z now represents 54%* of new gym memberships across our network. Not 20%. Not 30%. Fifty-four percent.
These aren’t your typical gym members. They’re willing to carry debt for fitness expenses, they expect mobile-first everything, and 72%* of them use neo-banks you’ve probably never heard of. Yet they have a 54%* attrition rate compared to Baby Boomers at 26%*.
Here’s what’s keeping me up at night: most operators are chasing these members with the same strategies that worked for their parents. That’s like trying to catch fish with a tennis racket.
The Technology Question You’re Avoiding
Every operator asks me about technology. But they’re asking the wrong questions.
They want to know about the latest app features or virtual class platforms. Meanwhile, 97%* collection rates are sitting right there, achievable through basic payment optimization. We’re processing $12 billion annually, and the operators hitting that 97% mark aren’t using magic, they’re using a 90-10 mix of bank direct debit to card payments and billing on Fridays.
The real technology question isn’t “What’s the coolest new thing?”; it’s “What boring, unsexy operational improvements will actually move my revenue?”
Three Things You Can Do This Week to Move Revenue
- Audit Your Payment Mix: Pull your collection data for the last six months. If you’re not hitting 95%+ collection rates, you’re leaving money on the table every single month. The optimal mix we’ve identified across 30,000 locations shows bank direct debit dramatically outperforming card payments for subscription billing.
- Test Your Mobile Experience: Hand your phone to a 22-year-old. Ask them to sign up for a membership, check class schedules, and make a payment. If they struggle with any part of that process, you’re bleeding potential Gen Z members. Our data shows 405,000* past-due payments recovered via mobile apps—that’s real revenue sitting in your pocket.
- Map Your Cancellation Reasons: The top reason for membership cancellation isn’t what you think. It’s not price. It’s not moving. It’s collection issues—20.95%* of cancellations happen because of payment problems. Fix your billing, reduce your churn. It’s that simple.
The Uncomfortable Reality About Premium vs. Budget
The data reveals something that challenges everything we thought we knew about the fitness market. Premium operators aren’t just surviving the economic pressure—they’re thriving. Life Time’s $815 monthly revenue per member isn’t an anomaly. It’s a roadmap.
But here’s the nuance: premium doesn’t mean expensive gym equipment. It means solving real problems for your members in ways they can’t get elsewhere. Life Time’s MIORA health optimization program is doubling revenue month-over-month because it’s addressing the holistic health needs that traditional gyms ignore.
The question isn’t whether you can charge premium prices. It’s whether you’re delivering premium value.
What’s Coming (Whether You’re Ready or Not)
The next 18 months will separate the operators who evolve from those who become cautionary tales. Here’s what’s already happening:
Hybrid is becoming standard. 72% of Gen Z members use both gym and home workouts. If you’re not offering seamless integration between physical and digital experiences, you’re not competing.
AI isn’t coming, it’s here. We’re embedding AI into member journey optimization and seeing operators reduce overhead while increasing retention. This isn’t about robot trainers. It’s about predicting member behavior and intervening before problems become cancellations.
Corporate wellness is exploding. B2B fitness contracts are on the rise, but most operators are still thinking like B2C businesses. The companies writing the biggest checks aren’t looking for gym access. They’re looking for measurable wellness outcomes for their employees.
The Questions You Should Be Asking
Instead of “How do I compete with the big chains?” ask “What unique value can I deliver that no one else can?”
Instead of “How do I keep prices low?” ask “How do I demonstrate value that justifies higher prices?”
Instead of “What technology should I buy?” ask “What problems do my members have that technology could solve?”
The Bottom Line
The fitness industry is consolidating. Not in the way we expected—with big chains swallowing small operators — but around value delivery. Operators who solve real problems for their members are winning. Those who just provide equipment access are struggling.
The data from our 30,000+ location network shows a clear pattern: businesses that adapt to changing member needs, optimize their operations, and embrace technology thoughtfully are not just surviving—they’re setting new revenue records.
The question isn’t whether change is coming to the fitness industry. The question is whether you’ll lead it or get left behind.
Your move.
*Cited from proprietary ABC Fitness data
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