Ajay, 41, hired a freelance personal trainer, someone who used to work with Cult.fit.<\/p>\n
Meanwhile, in Mumbai, Rohit (name changed), a 29-year-old marketing professional, realised he hadn\u2019t stepped inside his gym for over two months and decided to make a change. Instead of renewing his membership, he cleared a corner of his living room and transformed it into a compact home gym.<\/p>\n
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A pair of adjustable dumbbells, a kettlebell, a pull-up bar and a yoga mat later, his fitness routine was back on track, minus the commute, waiting time and monthly fees. \u201cPrice-wise, while the initial investment can seem steep for a home gym, I found that the equipment pays for itself within a year compared with gym fees,\u201d says Rohit.Therein lies the problem for the plethora of new-age gyms, which have been slowly losing their muscle. Across cities like Mumbai, Pune and Bengaluru, renewal rates for gym memberships have plummeted, often by 25-30%, ever since Covid, says Nikhil Rajpuria, president, Maharashtra Gym Owners Association.The reported numbers for FY24, the latest available, show that Cult.fit, the industry bellwether, saw its EBITDA (earnings before interest, taxes, depreciation and amortisation) slip further into the red, from a loss of Rs 263.2 crore in FY23 to a loss of Rs 587 crore. Other gyms have also been reporting losses. FY25 numbers haven\u2019t been reported yet, but if low renewal rates bear out there as well, it won\u2019t make pretty reading.<\/p>\n
Renewals are critical because of that old marketing truism: it costs a whole lot less to retain than to acquire a new customer.<\/p>\n
But why are memberships falling in a country that could do with a lot more people working out?<\/p>\n
HEAVY WEIGHTSA key reason is a dilution of the gym experience itself.<\/p>\n
\u201cOvercrowding is an issue during peak hours,\u201d says Rajpuria, who is also director of Gyms For All<\/a> (India), which runs the Transform chain. \u201cWe offer discounted rates for off-peak timings, but it doesn\u2019t always work. Ultimately, people go when it\u2019s convenient for them.\u201d<\/p>\n Conventional wisdom suggests that the way around this problem would be to open more and bigger spaces. But in India\u2019s overpriced urban real estate landscape, that is not exactly a wise option.<\/p>\n Rajpuria admits that Transform has had to downsize. \u201cEarlier, each gym was at least 6,000 sq ft. Now, we are cutting down to 2,5003,000 sq ft. Rentals in metro cities are just too high.\u201d<\/p>\n Mounting operational costs from electricity, taxes and maintenance are eating into the margins. Members chase discounts and expect premium service, creating an unsustainable balance.<\/p>\n Adding to the pressure is the GST structure that changed in October, which removed input tax credit on expenses by fitness centres. \u201cThat\u2019s an effective 18% increase in rental costs,\u201d says Rajpuria. \u201cPlus, gym equipment still attracts 18% GST. It\u2019s become nearly impossible to sustain.\u201d Most gyms, he says, are losing money. \u201cOur operating costs \u2014 rent, salary, power \u2014 make up 85% of monthly expenses. Inflation keeps raising these, but membership prices barely increase. Members demand discounts, not realising they are forcing gyms to cut corners.\u201d<\/p>\n Some, like Anytime Fitness, a global chain of 5,500 gyms, including over 170 in India, are trying out different models to tackle user worries. \u201cOvercrowding is a key pain point in traditional gyms,\u201d says Vikas Jain<\/a>, MDof Anytime Fitness<\/a> India. \u201cOur 24×7 model eliminates that\u2014members work out whenever they want. That flexibility changes the entire experience.\u201d<\/p>\n But will that be enough? As mentioned earlier, in many cities, high-rise living is changing how people work out. Newer apartment complexes come equipped with gyms, yoga rooms and even functional training zones. And that convenience is winning.<\/p>\n Market leader Cult.fit, which is preparing to go public, did not respond to ET \u2019s questions.<\/p>\n HOME COMFORTSFor those not living in an apartment complex, there is always the possibility of setting up a home gym.<\/p>\n
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TRAINER TROUBLESAdding to gyms\u2019 troubles is their inability to hold on to their most critical resource \u2014trainers.<\/p>\n