With a growing number of companies hoping to become the Peloton of ‘X’ or the Netflix of fitness, the global digital fitness market is expected to reach $27B by 2022. At the same time, demand for and spending on in-person workouts continues to grow. While headlines point to the end of the gym as we know it, high-end studios and budget clubs are expanding at record pace. In an effort to keep tabs on the global markets and track industry leaders, here’s a rundown of recent developments. 

In 2018, US health club industry revenue reached $32.3B, a 7.8% increase from 2017, according to IHRSA. Over the same period, total health club membership grew to 62M, with membership to a boutique studio increasing 121% over the past five years, compared to 18% for commercial fitness facilities and 15% for all fitness facilities.

In the UK, research from LeisureDB reported a total market of 10M gym members as the industry grew to £5B ($6.3B USD) for the 12 months ending March 2019. Meanwhile, the European market—including Norway, Russia, Switzerland, Turkey, and Ukraine—reached 60M members and €26.6B ($29.4B USD) in value for 2018. And in the Asia-Pacific, 22M members across 14 regional markets accounted for $16.8B in total revenue.

In all, IHRSA reported that the global health club industry revenue totaled $94B in 2018, as more than 210K clubs served 183M members. This continued growth helps explain (and justify) the aggressive expansion plans being undertaken by budget gyms and boutique studios alike. 

As we detailed back in Issue No. 22, Xponential Fitness hopes that each of its eights concepts, including Club Pilates, CycleBar, StretchLab, Row House, AKT, YogaSix, Stride, and Pure Barre, will reach 900 locations each over the next five years. Next up, the company is eyeing international expansion across Saudi Arabia, United Arab Emirates, Qatar, Australia, the UK, Canada, Mexico, Japan, and Brazil. 

After years of modest growth, Barry’s Bootcamp received a $100M growth investment from North Castle Partners—a private equity firm that specializes in the health and fitness sector—in 2015. Since then, Barry’s has grown from 17 locations to upwards of 50 locations in 17 cities across 10 states and Washington DC, plus 10 international locations. Most recently, the company opened its Asian flagship studio in Singapore, with Paris, Mexico City, Melbourne, and Doha, Qatar listed as “Coming Soon” on their website. 

Of course, Barry’s 50-ish locations are dwarfed by the thousands of studios coming online at Orangetheory Fitness. After reaching the 1,000-studio milestone and $1B in system-wide revenue for 2018, OTF plans to reach 2,500 global studios and 2.5M members by 2024. Currently, the company has 800K members across 1,100 studios in 49 US states and 22 countries. 

Following a similar trajectory, F45 Training is coming off an investment from Mark Wahlberg and FOD Capital that valued the company at $450M. Since launching in 2012, F45 has already amassed some 1,500 studios. According to F45 CEO Rob Deutsch, the Aussie company is eyeing 10,000 studios as they focus on global expansion. Having already opened in 40 countries, South Korea, Russia, Afghanistan, and Spain are next up. 

Of course, boutique concepts aren’t the only operators on the move. In the US, budget gyms like LA Fitness (700 locations, $2B revenue in 2017), 24 Hour Fitness (430 locations, $1.44B revenue in 2017), and Planet Fitness (1,500 locations, $449.9M revenue in 2017) are doing just fine. Since opening in 2011, Equinox-owned Blink Fitness has reached 50 locations and is continuing expansion. Meanwhile, luxury operators like Equinox and Life Time are expanding beyond fitness to become full-fledged lifestyle brands.

But, circling back to the parallel growth of digital fitness, how can it be that seemly every boutique and some big-box gym is expanding at a time when disruption is imminent?

Despite headlines to the contrary, the all-out collapse of brick-and-mortar gyms isn’t a foregone conclusion. According to Jon Canarick of North Castle Partners, over the next 15 years, the fitness market looks like more of the same. 

In speaking with Health Club Management, Canarick said high-value, low-price (HVLP) options will continue to find success. The same goes for group fitness — what Canarick refers to as HVLP 2.0. As digital options like Peloton apply pressure and competition among studios grows, Canarick expects there to be closures among boutiques — especially in urban markets with expensive rents. 

In the digital and connected fitness space, Canarick sees Peloton as the definitive frontrunner in the premium market. As more competitors enter the space, high-end options like Tonal and Mirror will battle it out for second place. Noting that Technogym has already entered connected hardware, Canarick speculated that SoulCycle, too, will eventually introduce an at-home option. Meanwhile, he sees cheaper options becoming available, further segmenting the market. 

Still, Canarick concludes, “I believe we humans still desire ‘live’ experiences – whether it’s because we work out with friends or because we need motivation and accountability.” 

If that statement proves to be true, the future of fitness will be defined by access—the option to work out at home, go to the gym, or tune into an audio class—and won’t be confined to an either-or decision between digital or in-person exercise.