THE TRUTH ABOUT THE CORPORATE GYM INDUSTRY
The corporate gym industry continues to grow. But contrary to popular belief, BILLIONS of dollars continue to be wasted by members each month because of the industry’s model.
LISTEN ABOVE OR CHECK OUT THE VIDEO (WITH TRANSCRIPT) BELOW TO LEARN:
- HOW much money is spent and wasted on gym memberships each month.
- WHY the corporate gym model is designed so members don’t use it.
- HOW you can offset the waste of your gym membership and some cost-effective alternatives to make your fitness more convenient, more accessible, and eliminate your excuses.
- WHAT you can do to maintain that consistency and intensity and NOT quit.
James Grage: I have an interesting discussion today. Something that’s been rattling around in my head for a bit, so might as well go ahead and jump right in.
Welcome to another episode of the Under the Sun Podcast, where we talk about everything: fitness, nutrition, motivation, and life strategies for living a better, happier, healthier life.
So today what I want to talk about is the gym industry. I know the gym industry has been growing year over year. It’s a massive industry. As a matter of fact, and I’m looking at some statistics here. So if you go online, you can find all kinds of different stats. I happen to be looking at one right here. It’s a website called new gains. Learn to build muscle. They did an infographic here on 2019 gym statistics. And so it’s pulling from some of this and I think there are some interesting talking points here.
James Grage: The first one we talk about the gym industry growing or the fitness industry growing. So they quoted at about $33 billion a year in the US, which I did some math here that verifies that. So let’s talk about this for a second. Let’s just talk about what the gym industry looks like.
They say that approximately 14% of the US population has a gym membership. Now we’ve got 329 million people in the US right now. They also state that the average gym membership is $58 a month. So that’s actually on the low side.
So you’ve got some of these corporate gyms that are offering $5 a month memberships. But then you’ve got memberships that go all the way up to $150, $200, $300 – so the average is $58 a month. Now, here’s what’s really interesting. So let’s do the math real quick.
James Grage: If you’ve got 329 million people in the US and 14% have gym memberships, that is 46 million gym memberships a year, 46 million. Now, if we were to take that other statistic of $58 a month as an average gym membership price, and we were to multiply that 46 million memberships times $58 a month, that is 2.7 billion dollars a month. Not a year, a month. Now, if we multiply that by the 12 months, that brings us to approximately $32 billion, which verifies his number that they have a $33 billion. So we’ve got $32 billion a year and gym memberships.
Now here’s where it’s messed up: Statistically, according to what I’m looking at here, and several other sites that say something similar, approximately 80% of the gym memberships go unused. And I know that’s probably not a shocker to you.
So 80%. If we were to take 80% of our $32 billion a year that they’re collecting from us, in the ACH payment that we pay every single month over and over and over. So if only 20% of the people are going, that means that $25.6 billion dollars a year is wasted on unused gym memberships.
$25.6 BILLION WASTED. That’s a shame. That’s a real shame. And here’s what’s upsetting to me about it, it’s your corporate gym environment. Not only do they not care, but they’re also banking on that. There’s another statistic here. Let me pull this up and I think this is going to be an eye-opener for you.
James Grage: Here it is right here. “Commercial gyms need about 10 times the members their facilities can actually handle to be profitable”. So that’s from Men’s Journal Magazine.
So ten times the members that their facility can handle, that’s what they need to bring in in gym memberships, just to be profitable. So what that says to you is they’re banking on the fact that only one in 10 people are actually going to show up. Cause if everybody that showed up to the gym that had a gym membership, they’d be completely overrun. Matter of fact, there’s another statistic here, I won’t name the gym, but this is a popular one, let’s call it a budget, priced a national chain. They’re quoting here, that “Per gym, there are about 6,500 members per gym or per location, but they can only accommodate 300 people at a time”. So they’ve got 6,500 members that belong to that particular gym, but they can only handle 300 people at a time.
James Grage: Now, of course, you can break that up throughout the day and say, all right, well there’s a morning crowd and there’s an afternoon crowd and there’s an evening crowd. Those are your three main times. Yes, people trickle in the middle of the day, but if you’ve ever been to the gym at two o’clock in the afternoon, it’s not exactly packed.
The same thing at 11 o’clock. Super busy in the morning. There are people there in the middle of the day at lunch and then the evenings, of course, are slammed. So let’s just take your three prime time slots, 300 people in the afternoon. This is the max, by the way, max capacity. This isn’t an average. They’re saying can only handle 300 people, which I don’t know if I’ve ever been to a gym that had 300 people in it at one time, but that is insane. That’s packed. You’re not getting a piece of equipment.
James Grage: You’re not getting a bench. You’re not getting a dumbbell. You’re going to be sitting around picking your nose, waiting for someone to finish. But anyway, if you were to take those three prime times, that’s 900 people probably a day out of the 6,500 so what I’m saying is that the gym business is designed to take your money to get that ACH payment every single month, but they’re banking on the fact that you’re not going to show up.
And that’s what I think sucks because it’s not about results. It’s not about making sure that people reach their fitness goals. This comes across is we hope that you pay the money. We hope you set a new year’s resolution for yourself because you do it every single year. We hope you sign up. We’re going to incentivize you to sign up for as long as we can and do a 12-month membership cause we know that you’re never going to show up and we’re just going to collect your money.
James Grage: So that is the basis of what I wanted to talk about today because for me, my primary goal is to see people succeed. So what does it take to eliminate all the excuses, all the reasons, which by the way, there is no such thing as excuses, only reasons, but eliminate all those reasons why you can’t work out consistently. A lot of it of course is time. We’ve all got a lot of different things and we’re juggling. It doesn’t matter how old you are or what your life looks like. Guaranteed, you’re probably packing your day with all kinds of stuff.
If you’re a parent, of course, you’re dealing with kids. If you’re a career person, you’re dealing with that. If you’re a student, you’re juggling maybe going to school and homework and a part-time job and whatever else you have going on social life.
James Grage: Time is always going to be an issue for all of us. So that’s one thing. Money’s going to be another thing. And we just pointed out how much money is being wasted right now. So that’s been my whole goal is to try to make fitness more accessible, and eliminate some of those reasons or excuses so that people can achieve their fitness goals.
It’s not just about money, and that’s what I don’t like about corporate gyms: is that it’s all about money. Now, I’m not pointing the finger at ALL gyms.
There are a lot of small, boutique gyms that are owned by individuals or by a small group, and they really DO care about their members and want to see everybody succeed. I’m not going after the entire gym industry here saying that the gym industry sucks. Not at all. I’m just saying that statistically here, there’s a lot of money being wasted because they bank on the fact that we all want to get in shape.
James Grage: Even people who say they don’t want to be healthier, or somehow be in better shape — whether that means losing a few pounds or feeling better or having more energy, whatever their definition of being in shape is — everybody wants to feel a little bit healthier, look better.
So they’re banking on the fact that we all want that. The banking on the fact that the new year’s resolution, it was one of the first things everyone does. They go out, they go get all the gear right? It’s like go get it: Tennis shows, go get some new AirPods, get some new workout pants, go get a gym membership, and I’m all dialed in. I’m super committed. All these things hopefully are gonna make me even more committed because I just spent my harder and money on it, so I’m going to go and I’m going to do it.
James Grage: And then like three weeks in dwindles away. Matter of fact, there are some statistics here about when people fall off. All right, here we go. Gym statistics on members who join and then (those who quit).
8% of men in the US quit going within a year. 14% of women quit going within a year. That’s not bad. That’s in a year’s period of time.
But 50% of all new gym members quit going within six months. So half the people within six months are gone, dropped out.
Now again, I’m not saying that these statistics are perfect, depends on the source that you pull. You’re going to see probably fluctuations in the numbers. And here are the reasons why people quit: 46% of people say that it’s because of the cost.
Well, especially if you’re not using it then it’s really expensive. It’s like leasing a car, going and leasing a super high-end car lease in a Mercedes, and then never driving it. Having it just sit in your driveway.
James Grage: All right. How often members actually go to the gym according to the attendance rate of all these. This is an old stat, but 50% of them visited the gym at least a hundred times over the entire year. It’s not terrible, but that’s still more than a third of the year, or less than a third of the year that they’re going.
So you’re wasting two-thirds of the year there. And I always talk about results coming from consistency. They don’t come from a magic plan. It’s not from your workout plan is not from your nutrition plan. Yes, those things matter. But what matters the most is the consistency that you put into it and the intensity that you put into it. Going to the gym less than 30% of the year is not going to get you the results you’re looking for. So anyway, I thought that was interesting.
James Grage: It’s always something that rattles around in my mind, especially when people say, “Oh, you know, resistance bands in a workout program that’s expensive! It’s over $100”! But according to an average gym membership at $58 a month, in two months, you paid for it completely.
And you can use it anywhere you want, anytime you want, it’s yours. You don’t have to go anywhere to use it, time’s not an issue. So it’s actually a major cost saver, especially considering how much money is wasted here in the US.
Here’s another thing that I think is pretty interesting in the fitness industry: more than twice the amount of money is spent on clothing and accessories as is being spent on personal trainers. Now, matter of fact, if you were to look at, so this statistic is talking about millennials spend close to $112,000 on fitness purchases over their entire lifetime, which equates to monthly costs of $33 a month.
James Grage: So they’re breaking it down to $56 on health supplements, $35 on clothing, accessories, $17 on meal plans, and $14 on trainers. So the funny thing is if you’re taking the meal plans and trainers and add it up, it’s still less than clothing.
Everyone’s out there going and buying clothing, spending more on that than they are on meal plans and actually trainers or training programs, which I think is kind of funny, but I actually see it go into a gym. It looks like a fashion show. Now fitness has become just as much fashion. It’s a fashion statement, right? It’s a little lifestyle. I go to the gym and I wear the outfit. Can she tell that I’d go to the gym? I got the gym workout clothes and the gym shoes on. I live the gym life. It’s easier to wear it than it is to live it.
James Grage: And so I think that’s one of the reasons why the apparel industry has grown so much. It’s just trendy.
So anyway, pretty short podcasts here today. I just wanted to kind of plant that seed with you, that if you’re going to spend the money on a gym membership, then by God at least go use it. That’s all I have to say.
If you’re going to, if Americans are gonna waste almost $26 billion a year, that’s the wasted. I mean if we’re going to spend $32 billion and total go to the gym and at least use it. But if not, if you not gonna use it and you want to get in shape, then maybe it’s time to start analyzing why you’re not going. I did a program once, it was actually for bodybuilding.com it was called Rewired, and the focus of the program wasn’t about the actual training program or the nutrition program.
James Grage: I really didn’t care as much about that. What I was more interested in is the psychological aspect of goal setting and also figuring out what some of your pitfalls are. Because we all have pitfalls. And if you can recognize what those are and recognize some of our own patterns, then you can catch yourself as you’re starting to trip.
And you can say, “Oh, you know, I’m doing it again”, but you have to be aware of it. So this whole program was based on that. And one of the things that I think is really important is that self-awareness and saying, “Okay, why am I doing this? What’s my reason for wanting to get in shape and really digging into it”? And we talked about in that in the past when it comes to goal setting, but you know, figure out what it’s going to take for you to be really committed and looking at what some of your pitfalls are.
James Grage: So if you’re going every year in January and you’re doing the same thing over and over. How many times have you said a new year’s resolution in December or January to get in the best shape of your life? But it doesn’t work like that. We’re there with bodybuilding.com. The reason I did that program the way I did is they told me that statistically a lot of these people were getting two or three weeks into their programs, and they would quit. Or they would program hop. They would say, “Oh, I’m not getting results fast enough”. And so they would move to the next program and to the next program, thinking that there’s some sort of magical program out there that is this shortcut to success. This magical hack life hack for getting in shape easier without putting in the time and the intensity and that consistency.
James Grage: And there is no shortcut around that. So it’s trying to help people really dig in and figure out how I can help them stay committed for the long haul. But one of the most important things is figuring out or recognizing your patterns.
If you do that same thing over and over, it’s like that saying the definition of insanity is doing the same thing over and over, except you’re expecting a different result. So if every year you’re setting a new year’s resolution for yourself, but come March or April, you’re not going to the gym anymore, and you do this year after year, clearly, there’s a pattern here.
So what’s it going to take for you to break that pattern? How can you make your fitness more convenient or more accessible to eliminate your excuses? So I’m not saying that the way that I train is the only way to do it for me. it has been a way to be able to juggle all the things that I’ve got going on in life.
James Grage: Because the truth is, as much as I’m into fitness and is much of a priority as it is to me..I mean, let’s face it, it’s been my career, my entire adult life. It gets to a certain point where I’ve just, I only have so much time between all the other priorities that I have.
And so this enables me to be able to squeeze it all in and create more time for myself because there is only so much time in a day. You can only get up so early and stay up so late, but you can create time by creating efficiency. In other words, stop wasting so much time. So I’m not a, I’m not super sympathetic when people say, “Oh, I don’t have time”, because I feel like I’m about as busy as one can be. I kind of sound like a busy bee.
James Grage: I feel like a busy bee. I just know that if you really want it, you can do it and you can figure out a way to do it. So if you’re doing something, and you’re falling into the same pattern, stop for a minute.
So as we get close to the end of the year and you start thinking about your new year’s resolutions, again, ask yourself, “Am I going to do the exact same thing that I did last year? Am I going to set a goal for myself? There’s a lofty goal that I’m not going to reach, that I’m going to get frustrated and I’m going to quit”.
Or is it time to reevaluate and say, “Maybe there’s a better approach here. Maybe one, I’m going to set smaller goals for myself and break those down into smaller goals, goals that are achievable so I can keep myself motivated, keep myself psyched up and energetic to go ahead and continue moving forward”. Versus setting big lofty goals where you’re always going to fall short and therefore demotivate yourself.
James Grage: So obviously, this all ties into, you know what I’m kind of all about these days, which is having the freedom to be able to train outside the gym.
Again, it doesn’t mean I’m anti-gym cause I’m not. I just know that I can reach my fitness goals without having to go to the gym and it gives me a lot more flexibility. But anyway, I just wanted to share some of those statistics with you. I thought they were eye-openers, the biggest one being money.
None of us like wasting money, but the reality is statistically most of us in the US are wasting money on gym memberships. Anyway, that’s it for now. I hope you guys are doing awesome and I will see you on the next podcast.