The fitness industry continues to thrive, according to a new report from Place.ai that measures foot traffic across the fitness facility landscape.
“Even as consumers reduce discretionary spending, many see gym memberships as an essential indulgence. And while value may be key for some fitness buffs, others are willing to splurge on pricier health clubs,” Placer.ai said in a recent blog post on the growth trends at premium fitness brands like Life time and Orangetheory. The company said it dove into the data for the two premium fitness chains to better understand what’s driving their recent success.
Worth the Workout
Placer.ai said it’s no secret that value has dominated the consumer mindset this past summer, including the fitness category. Low-cost chains like Crunch Fitness and Planet Fitness remain popular choices for gym-goers, but the research firm contends that upscale gyms are carving out their share of visit gains.
“Since April 2024, Life Time and Orangetheory have driven consistent year-over-year (YoY) visit growth, Placer.ai said in its post. “In Q2 2024, foot traffic increased 5.4 percent to Life Time and 7.8 percent to Orangetheory compared to 2023.”
The company said that Life Time encourages community and aims to be more than just a place to exercise, which is reflected in the cost of membership. Increased foot traffic suggests that more consumers are opting into Life Time’s lifestyle, the blog post stated.
Orangetheory takes a different approach to fitness.
“Aside from a premium membership tier which offers unlimited classes, the Orangetheory model allows members to pay monthly for a set number of guided workouts at its boutique-style gyms,” the company wrote in its post. “Orangetheory prices aren’t cheap, but considering the personal attention and real-time biofeedback gym-goers enjoy, it’s no wonder the concept is resonating with consumers.”
Frequent About Fitness
Placer.ai said Digging deeper into the data reveals that visitors to Life Time and Orangetheory are highly engaged with the brands, frequently visiting the club or taking regular classes. “The more members are engaged, the more likely they are to renew or upgrade memberships,” the research form suggested.
“In Q2 2024, 86.0 percent of Life Time’s visits were made by frequent visitors (those that visited at least four times a month) – a higher share than that of value fitness chains (78.3 percent), the Placer.ai data shows. “Meanwhile, 63.0 percent of Orangetheory’s visits came from frequent visitors.”
Placer.ai believes this slightly lower share may be due to the fact that Orangetheory offers pre-purchased class packs which allow gym-goers to spread out their workouts over a longer period of time.
“And this allows Orangetheory to drive traffic from casual gym-goers who may avoid monthly gym memberships altogether,” the blog said.
Choices of High-Income Audiences
While Life Time and Orangetheory experience different shares of frequent visits, Placer.ai said analyzing the demographic characteristics of each provides further insight into the audiences from which they drive traffic.
“Perhaps unsurprisingly, Life Time’s captured market featured the largest share of high-income households in Q2 2024 (i.e. those with HHIs above $150K), followed by Orangetheory. And value gyms were more likely to draw consumers with HHIs below $100K, the data showed. “But notably, Life Time, Orangetheory, and value gyms all drew diverse audiences.”
The Placer.ai post said that 40.5 percent of Life Time’s captured market was made up of households with HHIs below $100K – while 19.7 percent of value gyms’ captured markets were made up of households with HHIs over $150K. The captured markets of all three reportedly had similar shares of households making between $100K and $150K.
“So while the highest income consumers may be most likely to visit the upscale chains, those making $100K-$150K are almost as likely to visit a value-focused gym,” the blog post ascertained.
Plenty of Work(out) to Do
“Value-focused gyms and upscale health clubs each have a place in the wide fitness landscape, with demand for both growing strong,” Placer.ai concluded. “Will the industry continue to be a winner as 2024 comes to a close?”
Image courtesy Life Time
