The Future of Fitness

THE FITNESS INDUSTRY

See where the industry is heading in the coming years

It’s been a tough couple of years for the fitness industry. Since United Leasing & Finance started lending in the fitness space more than 25 years ago, we haven’t seen anything impact the industry quite like the challenges of the past two years. The good news is — the future of fitness is looking bright.

Even throughout the pandemic, it’s been clear that people still value health, wellness, and fitness. This puts the industry in a great position to not only rebound but to also grow during the next several years. According to data from IBISWorld, fitness industry revenue is expected to grow an annualized 2.7% over the next five years to $40.3 billion. While some growth can be attributed to the pandemic recovery, there are many other factors that have the potential to positively impact the industry moving forward.

Increase in Sports Participation

Participation in sports is expected to increase over the next several years to 2027 according to IBISWorld, which will have a two-fold positive impact. The increase in sports participation will boost demand for fitness services and grow the potential pool of consumers, ultimately helping drive industry revenue growth.

As with so many other industries and aspects of our daily lives, we can’t escape the impact of COVID-19. On a positive note, however, as the COVID-19 situation continues to improve, so will confidence in fitness participation.

“As local communities and the economy recover from the coronavirus pandemic, people will have more options to choose from for physical activity and recreation,” the report states. “Participation in sports, particularly team sports, is expected to grow as it becomes safer to gather in groups due to the high vaccination rate among the U.S. population.”

“As local communities and the economy recover from the coronavirus pandemic, people will have more options to

choose from for physical activity and recreation,” the report states. “Participation in sports, particularly team sports, is expected to grow as it becomes safer to gather in groups due to the high vaccination rate among the U.S. population.”

Concerns about Childhood Obesity

Families and parents are continuing to become more conscious of health, wellness, and fitness, especially with the growing concern over childhood obesity. According to The Physical Activity Guidelines for Americans, 2nd edition, children ages 6 to 17 are recommended to perform 60 minutes or more of moderate-to-vigorous physical activity daily, but the CDC states that less than a quarter of children in that age range meet that recommendation.

Keeping these factors in mind, IBISWorld predicts this will spur an increase in gym memberships from consumers 17 years and younger who will invest more in fitness classes and private training sessions.

Engagement of Baby Boomers

Kids 17 and younger aren’t the only demographic that IBISWorld predicts will increase in gym memberships. Baby boomers are also expected to increase their engagement with gyms and health clubs as they continue to age and grow more health conscious.

As the median age of the U.S. population grows, so does the number of people with more leisure time, like baby boomers who continue to reach retirement age. This rise in leisure time will give them more time to pursue other interests and hobbies, like fitness. Another factor to keep in mind is the shift in cultural norms. With a continuing shift toward sharing household responsibilities equally, this could lead to more leisure time overall.

Incentives for Gym Memberships

Awareness continues to spread about the benefits and importance of including fitness in our daily lives, which is creating a shift in consumers to increasingly see gym and health club memberships as vital and necessary expenses. Even employers and health insurance providers are incentivizing gym memberships.

There are many studies that show fitness promotes higher productivity, like the study “Exercising at work and self-reported work performance” done by Leeds Metropolitan University and published back in 2008. More employers are realizing the benefits and subsidizing gym memberships for their workers, helping to boost the industry.

According to IBISWorld, employers aren’t the only ones encouraging gym memberships. Many health insurance providers are also growing more concerned over the number of obese people in the U.S. and are looking for ways to cut healthcare costs by reducing the risk of diseases like type 2 diabetes, heart disease, and high blood pressure.

“In particular as healthcare costs continue to escalate, health insurance providers may implement incentives to promote preventive health practices, including the use of fitness centers among individuals within their provider network,” states the IBISWorld report.

Growing Consumer Spending and Disposable Income

The reports from IBISWorld predict that growth in both per capita disposable income and consumer spending will boost the fitness industry in the coming years. According to IBISWorld, per capita disposable income is anticipated to increase at an annualized rate of 2.7% over the next five years until 2027.

Individuals will be able to spend more on training sessions and gym services, making the gym-going experience better, which could have a domino effect for them to continue making it a bigger part of their daily lives. Plus, as the COVID-19 situation continues to improve, wage growth and prices are expected to rebound and employment will increase, leading to overall economic growth.

While these are some of the factors we see potentially influencing industry growth in the coming years, we unfortunately aren’t fortune tellers. What we can say is that, throughout the past two years, we have been proud and amazed to watch the resiliency and creativity of our fitness clients in facing one of the hardest and most challenging times in the industry’s history. If that is indicative of anything, it is certainly that the best is yet to come.

About United Leasing & Finance

United Leasing & Finance is a customer-focused and growth-oriented leasing and finance company committed to providing custom financing solutions to businesses across the U.S. and Canada. For almost 60 years, United has partnered with clients to achieve mutual success from small businesses to Fortune 100 companies and has been lending in the fitness space since 2000.