The Rise of the $6,000-a-Year (or $120-a-Year) Gym

Cristina Winsor, of Wakefield, works out at Planet Fitness in Reading on Tuesday, March 19, 2013.
Photo: Dina Rudick/The Boston Globe via Getty Images

Holiday weight gain: It’s real, and as of tomorrow, millions of Americans will ditch the cinnamon rolls and hit the track in a New Year’s effort to reverse it. They will fail, or at least most of them will. And they will spend billions of dollars doing so.

They’ll spend it on diet books, nutrition plans, sneakers, spandex, cleanses, bets, and gyms. And when it comes to gyms, they will increasingly tend to spend a whole lot or relatively little. Let’s call it the barbell effect, a sweaty little variation on the big inequality theme.

One way to see it is to look at the two gym brands commonly cited as the fastest-growing in America: CrossFit and Planet Fitness. Both are expanding like crazy. CrossFit has gone from having 13 affiliate gyms in 2005 to 10,000 today. And Planet Fitness has more than tripled in size over the past five years.

But aside from their bang-up growth rates, the two could not be more different. The former is expensive and intense, appealing to competitive individuals ready to commit thousands of dollars and many hours to working out. I go to a CrossFit gym a few blocks from my apartment. It costs $160 a month, often more than I spend on groceries. The latter is perhaps most famous for giving out free pizza — a fact it embraces and publicizes, no less. Its monthly fees are normally around what a movie ticket costs.

One has the motto “Forging Elite Fitness.”

The other, “Home of the Judgment Free Zone.”  

A photo posted by Brandi (@brandishapirooo) on

But the trend is broader than those two brands. High-end gyms catering to individuals with intensity and ample disposable incomes are proliferating, particularly in urban markets. The infamous and fast-growing SoulCycle costs an eye-watering $34 a class. (If you buy a 30 pack, it works out to just $28.33.) Work out four times a week for a year, you’re facing a nearly $6,000 tab. Going to CrossFit looks cheap in comparison, at about $2,500 a year in Manhattan. Ditto for all those boxing gyms, Pilates and barre studios, and outfits offering massages and juice bars.

But amenity-lite, low-end gyms catering to budget consumers are proliferating, too. For the same price as a single one-off SoulCycle class, you could work out for a month and a half at a Blink Fitness outlet or for three whole months at the Planet Fitness in Brooklyn. “From 2010 to 2014, many small, low-cost gyms with few amenities and month-by-month contracts have fared well,” said an industry report by IBISWorld. “Poor economic conditions, coupled with many consumers continuing to be budget conscious over the period, have caused new trends to emerge.”

It is the middle that is growing more slowly, with some chains struggling to demonstrate their value to consumers — your Bally Total Fitness, now all but defunct, or Curves. It is the gyms with considerable but not intolerable monthly fees and decent amenities, but no sheen of luxury or promise of extraordinary results.

Take this passage from the latest annual report of Town Sports International Holdings, which runs the chains of New York, Philadelphia, Washington, and Boston Sports Clubs. “The number of competitor clubs that offer lower pricing and a lower level of service have continued to grow in our markets over the last few years. These clubs have attracted, and may continue to attract, members away,” it said. “We also face competition from club operators offering comparable or higher pricing with higher levels of service” and “private studios offering niche boutique experiences.”

To better compete, it has pivoted both high and low. Its monthly dues have dropped to an average of $59, versus $66 ten years ago. And it has also opened its own line of shmancy studios, as have many other gyms.

It is worth noting that those middle-market gyms are a bad value for many customers. One economic study looked at gymgoers on annual, monthly, and pay-as-you-go contracts. (Monthly fees were about $80, and the drop-in price was about $10.) They found that people paying for the gym went so infrequently that 80 percent of the monthly members would have spent less if they’d just paid for dropping in. Only 1 in 10 or 20 went three times a week; about 1 in 4 people on a monthly or annual contract only went once a month.

That’s no big deal if you’re signed up at a Planet Fitness and paying only $10 a month. And the sneaky secret of many cheap gyms is that their entire business model is predicated on people not showing up too often. (For more on that, check out this great NPR segment.) But it’s a really big deal if you’re paying $50 or $100. And it is a big deal if your finances have gotten squeezed of late — as they have for so many families, as evidenced by the fact that median household incomes have kept declining for the past few years.

Then there is the segment of wealthy, college-educated individuals who have seen their incomes bounce back and rise — and who are more than willing to shell out $40 to hop on a stationary bicycle or $25 to get walked through some ballet poses or $350 a month to have an assistant walk you to your workout.

The good news for those of us thinking about our Santa bellies is that, as always, throwing on your sneakers and taking a walk remains free. 

The Rise of the $6,000-a-Year Gym