You made a ton of assumptions based on my comment.

I've had that rate or cheaper at 24hr for 20 years. I get what I need from my local gym and have brought other people there in the past. I was a 4-5 day a week member before the outbreak.

I lwon't be as frequent going forward, due to how stocked my home gym is now, but most memberships now a days are 2-3x what I pay per year or higher. I've done that math and it does not make sense for me to cancel at my current rate even if I only go to another location when visiting family in the future.

NTXAg10 said:

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You made a ton of assumptions based on my comment.

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I wasn't assuming anything based on your comment (nor directing my comments directly to you) - was just posting on the model in general.

Opening a gym right now sounds like a great way to lose money. You realize we're in a pandemic, and the world is going to look different on the other side? Fitness trends are changing along with a lot of other things.

One thing that came to mind in the above discussion:

A gym membership cancelation hurts the gym way more than an online business. A gym has a finite number of prospective local members to attract. An online user canceling a membership does not hurt the revenue because there are seemingly infinite number of new users to enroll.

A gym cannot churn through new users like an online company.

Edit-I'm having hell uploading this picture from my phone, but it's relevant and funny.

https://imgur.com/a/iS94np3

Proposition Joe said:

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It was indeed hyperbole of me to say that's why most things have moved to a subscription model.

But to act like the act of still collecting monthly subscription fees from dormant users isn't a revenue stream for these companies is being purposely naive.

There's literally multiple services now being offered by credit card companies to "make you aware" of all of your little subscriptions. Why would a credit card company -- that wants you spending -- be developing utilities to assist you in being aware of services that you 100% have no desire to be rid of?

Yes, all service providers prefer that every user they have is actively using their service and more than happy to pay the fee for it every month. But that doesn't mean that they aren't thrilled to still be deriving revenue from users that really don't take advantage of the service, forget they even subscribe to the service, or were drawn in by the reduced/free promotion and forget to cancel before it expires.

There's a reason services that offer a free 30-days want that credit card # on file - and it ain't because they think you'll love the service so much that you'll just be too excited to remember to give it to them again.

It's because they know a decent % of the people will forget about it and get billed a month - maybe two or three - before noticing and cancelling.

(There's also a decent percentage of software products that have shifted to the monthly subscription fee because they figured out they were generating far more revenue than they would selling the same product as a package up front. Why bother asking $200 for the full version of MS Office with a usable product cycle of 3-4 years when you can charge $15/month for life?)

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There's a couple reasons why subscription services with free trials do what they do. Part of it is users are lazy and it is hard to get even motivated people to come back around to a website and provide CC info just like users are (admittedly per your argument) often times too lazy to come back around and cancel services. Get payment info when people are most motivated to give it to you is like marketing 101.

The other reason though is it eliminates 2 bad things from the system:

1. People who aren't likely to ever use your service aren't taking on a free trial if you've got to give your CC info up front. There IS an element to it of keeping unlikely users away because their cancellations and contesting of the fees later on are actually quite costly.

2. Eliminates people churning free trials by signing up their pets or 'roommates' like Bart Simpson or Eric Cartman or Keyser Soze for the trial when theirs runs out.

HYC_AG said:

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This isn't earth shattering stuff but, people don't pay ridiculous amounts of money for CrossFit or Orange Theory for the workouts... they do it for the community.

Big impersonal places like 24 hour fitness are going to hurt from the WFH shift, but places that offer something more than a place to pick up heavy things will continue to draw people in the door.

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I can see this, but those who are going to home gym weren't really the demographic CF or OT were going after.
My gym at work was just serviceable enough to not consider buying a membership. I've cycled in and out of gym memberships before and the hardest part is just getting to the gym. And that was before kids. Now there's no hope. So we've started pulling together a home gym (during the most expensive time to be doing so- ouch).

Just like you said, I think the COVID home gymers who those who already struggled to get to the gym and just have a traditional gym regime.

CF and OT are struggling right now with the COVID denying them what people really want out of that membership anyway. The ones that can make it through will bounce back just fine.

SoupNazi2001 said:

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I guess I have a different perspective on gyms post Covid than most. Once people aren't afraid to go to gyms anymore I think you will have a lot that choose to go especially those who work from home. When I WFH and the kids are in school it is much easier to go to the gym due to lack of commute. I enjoy getting out of the house and seeing other people than my family when I WFH and am much more focused at the gym.

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There is some truth to that. I do think we will see an uptick in people getting back out there for this very reason, but I also think the number of gyms per capita won't return to what it was either. I could certainly be wrong though. I do think opening one right now is risky as hell and frankly risky even in normal times.

Our latest gym in particular will absolutely see a large uptick in people returning but it's also a very unique place. Average age is older and is essentially a social scene for the old folks on top of working out. I suspect they are chomping at the bit to get back.

I think most angles have been covered, here. The only thing I'd add is that it is quite likely that a lot of workout facilities have been closed during the pandemic, and not likely to reopen. Therefore, if you're going to go forward with your plan, check out auctions or liquidators for recent vintage lightly used equipment, and save money on start-up costs that way.