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Gyms fear they'll go the way of arcades and movie rental stores

Proof of vaccine will be required at NYC restaurants, gyms and concerts
NYC to mandate vaccines for some indoor activities 08:55

Going to the gym was always part of Kari Hamra's routine until last year's government-ordered shutdowns forced her to replace the workouts with daily rides on her Peloton stationary bike.

That's when she discovered something surprising: She did not miss the gym. At least not the driving back and forth, filling water bottles, changing clothes and most of all, taking time away from her husband and two boys.

Now that her gym in Springfield, Missouri, is open again, she's slowly returning. But finding a more convenient exercise schedule at home and seeing a surge of COVID-19 cases in her hometown this summer have her questioning how much she needs the gym. She figures that if there never had been a coronavirus outbreak "I would still be a gym rat."

The pandemic has reshaped how Americans exercise and upended the fitness industry, accelerating the growth of a new era of high-tech home workout equipment and virtual classes.

Thousands of small fitness centers and studios that were forced to close a year ago are now gone for good. Others are struggling to stay afloat and have redesigned their spaces, turned toward more personal workouts and added online training.

Is Peloton a gym killer? 

We don't yet know if gyms will survive in the face of virtual workouts provided by apps and pricey, interactive bikes and treadmills or if they go the way of arcades, video rental shops and bookstores.

Peloton, a tech company that makes interactive stationary bikes and treadmills and app-based workouts, is betting the workout-from-home trend is here to stay. It's breaking ground Monday on its first U.S. factory just outside Toledo, Ohio, where it plans to begin production in 2023 and employ 2,000 workers.

Peloton's stock closed at $116 per share Monday, up 346% from $26 a share in mid-March 2020. 

Workout clothing company Lululemon, known for its stretchy leggings, also bet on the trend early on in the pandemic, acquiring at-home fitness startup Mirror for $500 million

Lululemon shares are trading at $408 per share, up 125% from $181 a share in March of last year. 

Meanwhile, demand for Peloton products surged so much during the pandemic that some customers had to wait months to receive their bikes. While the company said the backlog has waned, it reported that sales have continued to soar, up 141% in the first three months of this year.

"A broken model of yesteryear"

Peloton founder and CEO John Foley thinks technology-driven home fitness routines will eventually become more popular than gym visits, which he called "a broken model of yesteryear."

The phenomenon compares to video streaming services overtaking the movie business. 

Peloton's next steps include bringing more of its equipment into hotels, apartment complexes and college campuses. It will also launch more workouts through the company's app.

"Fitness is one of the few remaining categories that is going to be massively disrupted by a digital experience," Foley told the Associated Press.

During the early months of the pandemic when they were forced to close, many independent fitness centers turned to Zoom and other video conferencing platforms to continue offering classes like yoga and pilates and personal training sessions to their members. 

But not all gym operators are leaning into virtual training. 

"We don't have the budget to do it at the same price and the same quality," said Jeff Sanders, CEO of Apex Athletic Health Club in Penfield, New York. "Digital is great, but we've seen surveys that show people want to stay active, but miss the interaction and being around others."

9,000 gyms and counting already closed

Roughly 9,000 health clubs — 22% of the total nationwide — have closed since the beginning of the virus outbreak and 1.5 million workers lost their jobs, according to the International Health Racquet & Sportsclub Association.

The industry group is lobbying Congress to approve a $30 billion relief fund for the fitness industry because many clubs are struggling to recover from months of lost revenue and membership declines and still owe back rent.

Even more facilities are expected to close this year, particularly if the government doesn't step up. The popularity of working out from home isn't helping either, according to Helen Durkin, the association's executive vice president of public policy.

Gyms and fitness studios embrace the outdoors during COVID-19 01:26

"People are integrating their lives with technology. This is where society is, and it's just going to get more integrated," said Michelle Segar, director of the University of Michigan's Sport, Health and Activity Research and Policy Center.

Fitness industry leaders say research has shown that health clubs pose no more risk of spreading the virus than other public spaces. But San Francisco gym owner Dave Karraker thinks it will be a long time before many people are comfortable going into a big, tightly packed fitness center.

"They are going to be thinking about ventilation and air purifiers and how long ago was this equipment sanitized," he said.

He reconfigured MX3 Fitness's two small studios and created personal workout spaces. It has become so popular he's looking for a third location.

He's not surprised that people are coming back even though safety remains a concern.

"They don't want to live this solitary existence anymore," he said. "There's all kinds of motivations. Let's face facts, gyms are great ways to meet new people, especially if you're single."

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