Fitness Investment Landscape (L.E.K. Consulting)

Summary

• The number of U.S. gym locations decreased by ~25% from 2019 to 2022 due to pandemic-related closures.p.2
• Total U.S. health club membership expanded to ~73M members in 2023, representing a ~6% increase compared to 2022.p.2
• Total health club visits reached ~5.8B in 2023, growing ~11% versus 2022 levels.p.2
• High-Value Low-Price (HVLP) chains expanded Q4 2023 visit volume compared to Q4 2019, with Crunch Fitness up +81% and Planet Fitness up +27%.p.3
• Life Time Fitness grew total revenue by ~17% from 2019 to 2023 by increasing revenue per member from ~$2.2K to $2.7K.p.3
• Average health club visits per member declined 28% from 109 visits in 2019 to 79 visits in 2023.p.4

Key insights

1. In-person fitness demand rebounded strongly in 2023 as member visits reached ~5.8B.p.2
2. HVLP and Premium gym segments continue outpacing mid-market gyms in gaining market share.p.3
3. Around 75% of surveyed gym members report high satisfaction and strong perceived value for money.p.4
4. Google Trends searches for strength training were ~40% higher in 2023-24 than in 2019-21.p.4
5. The adoption of GLP-1 weight loss drugs acts as a tailwind for fitness clubs as strength training is needed to preserve lean muscle mass.p.4
6. Fitness sector M&A valuations in 2024 are evaluated on year-over-year operational performance rather than pre-COVID benchmarks.p.5
7. Boutique fitness concept tie-ups and platform consolidations are increasingly used to smooth financial volatility and diversify concept risk.p.6