Wearable Tech World Feature Article
January 12, 2015

Gym Operators Finding Double Trouble from Wearables & Higher Rents

Even a cursory glance at the wearable technology market will find plenty of clear applications for the technology in question in the field of pursuing better physical fitness. With a host of fitness tracker systems on hand, it's easy to see where this technology has value in helping people get out, get active, and from there, get fit. But the wearable technology that drives these capabilities, meanwhile, is just one of a two-part set of trouble for gym owners.

As many markets have discovered, the use of automation and similar tools often has something of an adverse impact on hiring and employment, and here, gyms are proving no exception. With the growing amount of wearable devices that can provide coaching and other do-it-yourself fitness programs, gyms are starting to wonder if the demand for personal trainers and even memberships altogether will fall off.

After all, the total market for wearable fitness devices is on the rise; in 2014, a Gartner report noted that global shipments of such devices amounted to 70.2 million units, and other estimates suggest a total market of $30 billion by 2019, with smart wristbands alone accounting for $20 million in total shipments. A host of providers are already in play—like Fitbit and Jawbone, as well as the Nike FuelBand—and reports from the Consumer Electronics Show (CES) event suggest that there was no slowdown, as items like the Spree SmartCap emerge.

Naturally, the gym population—like Equinox Fitness' president and CEO Harvey Spevak—doesn't seem overly concerned. After all, as Spevak asserts, there really is no substitute for “...hands on expertise and experience.” Since Spevak believes he's targeting the “luxury consumer,” said consumer will want that hands-on touch first. Indeed, Spevak even believes that wearables can be a boost to his industry; with wearables becoming a larger part of the picture, it will help drive interest in getting fit in general and that will turn more users toward the gym system. Given that Equinox was the first national chain to partner with Apple when the Healthkit app came out, that suggests Equinox is more than ready to put its money where its mouth is, so to speak.

But this is just the tip of the iceberg for gyms' troubles. Spevak is right that there will likely be an explosion of people interested in fitness, and some of these will indeed turn to the gym. But not all of those people will do so, and that means losses. Plus, Spevak fails to consider how many of those currently in the gym system will decide to leave as a result of having improved do-it-yourself tools on hand. What's more, there's another problem attacking the field: increased rents. Rent costs in major markets are on the rise, particularly in two of Equinox's biggest markets, New York and San Francisco. However, gyms can work around this to a degree, as gyms don't specifically need to be on main drags or in similar high-value areas. A gym can be on an upper floor, or set off the beaten path somewhat. That can help, particular if there's an area with a lot of closed business anyway.

Still, the fact remains that the market for gym services is about to face its share of uncertainty in the future. Enhanced possibilities in the do-it-yourself front will likely hurt some operations, as will higher rent. But a general increase in fitness interest will help at least mitigate the damage, and may produce better results all around.

Edited by Maurice Nagle

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