There were 3060 gyms in the UK in 2021. This was down from the previous year and accounts for the impact of COVID-19 and the subsequent national lockdowns on the industry. More recent figures due to be released in 2023 are expected to show recovery, with the number of UK gyms actually surpassing pre-pandemic levels. It’s a competitive market. And gyms aren’t just competing against each other. They’re also competing against health clubs and the rising popularity of exercising at home. Still, the fitness industry is set to hit £5 billion in the UK this year. With 15% of the UK population currently holding a gym membership, there certainly appears to be enough opportunity for gyms to make money, but how do they do it? How do gyms make money? Gym membership fees A gym membership is a recurring fee that’s paid either monthly or annually for access to facilities and equipment. In the UK, the average gym membership is £40 a month, but gyms can charge either significantly more or less than this. Between 60 to 80% of a gym's income is likely to come from its membership fees, and the money is used to cover operating expenses like rent and utilities as well as to buy and maintain equipment, hire and manage staff, insurance, marketing and other necessary expenses. Memberships also provide a recurring income source and help maintain financial stability while planning for future growth. More members will often mean more money for the gym. What’s interesting about subscription-based models like this is that the gym can generate income even when members don’t attend regularly or at all. One NPR article uses one of the largest gym chains in the US as an example. So, Planet Fitness has around 6,500 members per gym, even though each of its gyms can only accommodate around 300 people at one time. They're oversubscribed. But this doesn’t matter because they know most of their paying members won’t turn up regularly enough for it to make a difference, and this allows gyms to maximise their income without running beyond maximum capacity. Some gyms also generate additional income by offering different membership tiers with varying fees and perks, such as 24/7 access, guest privileges, and fitness classes. PT Packages Gyms also make money through their personal trainers by charging members for one-on-one or small group training sessions on an hourly or per-session basis. The trainers may be directly employed by the gym, or they’ll be independent contractors who rent space and use the equipment. The gym takes a cut from the PT’s training fees through the rent they charge or through a commission. Personal training services can be a significant source of revenue for gyms, especially those that attract high-end clients or for niche training or trending workouts. According to More than Muscle, most people tend to choose between 1 and 3 sessions a week. Some people also choose to train for a specific fitness goal or have an event in mind, such as a marathon or military fitness test. Non Commercial Gyms Commercial gyms are open to everyone. They tend to be larger too, meaning they can sign-up more members and will offer a wide range of different equiptment and services. Non commercial gyms are a little different. They may be studios or boutique gyms (sometimes these terms can be used interchangeably). These types of gyms may be focused on a single type of exercise like yoga, indoor cycling, or cross-fit. Non commercial gyms can also be private gyms, which may mean there's a specific requirement in order to join: residance, institution, profession or associatioin, for example. Non commercial gyms tend to rely on a smaller membership group attending the facility regularly. This is unlike commercial gyms which are known to oversubscribe members. Selling Merchandise and Extra Services Personal trainers aren’t the only thing that gyms can charge their members extra for. There’s also an opportunity to sell retail items or services that align with the gym’s brand and target market. This could be selling protein powder or sports drinks. It could also be branded t-shirts, water bottles, or sports equipment like gym bags and towels. Merchandise can also be a great way to increase brand awareness and help with marketing, which can also bring in money. Gyms with a large and dedicated customer base could also licence their logo or brand for use on third-party products. Some gyms will also rent out their floorspace to concessions, such as sports massage therapists or nutritionists. Higher-end health clubs often have a café or coffee bar providing drinks and snacks to members for a fee. Online Fitness Gyms can also branch out into the world of online fitness. This was popular during the COVID-19 pandemic when national lockdowns forced gyms to close. While online classes and sessions won’t be possible for a lot of gyms due to the technical expertise of a higher-end and professional setup, remote training can provide a significant boost to income. Aarmy is one example we used in a recent post about indoor cycling apps. The New York-based gym has an app that users can access to drop into live indoor cycling classes or follow boot camps. One of the advantages of remote fitness is that it can attract subscribers from well beyond a gym’s traditional catchment area. It also means gyms can engage with members even when those members aren’t available to come to a physical location, which should help with membership retention. Classes Gyms can hire their space out for classes as they would with PTs for training sessions. Gyms can charge tutors or teachers a fee for using a room or a studio, especially during off-peak periods when the gym isn’t using that space. If a gym has a cycling studio, then reaching out to teachers who may already have a loyal following can help reap the benefits of indoor cycling classes for the gym. This can also allow the gym to open up to activities that target other audiences. For example, a HIIT studio offered out in the morning for a pensioner’s tai chi class. It also saves the gym from planning, developing, and marketing its own classes. And it isn’t always about courses with a physical aspect, either. Gyms might hire a studio space for a meditation teacher or for a nutritional and well-being workshop. Electricity-generating equipment Sometimes it’s easier to save money than it is to make it. Gyms can install electricity-generating exercise equipment to capture the power generated by their members and offset their energy costs, reduce their carbon footprint and help power their premises. Installing RE:GEN Studio bikes for instructor-led classes is an effective and easy way to create clean electricity. The human power is stored inside a central battery unit from which the gym draws power as necessary. Learn more about what the RE:GEN Studio can do for your gym. Don’t own a gym? Pre-order the RE:GEN for a 2024 drop and charge your electronic devices using human power. Advertisements Gyms can advertise other non-competing local businesses and services for a fee. This could be an advertisement on the back of a toilet door or paid ads on an email newsletter campaign. It could be charging for advertising space on equipment, walls, or flooring and for displaying promotional materials like flyers and posters. The amount gyms can charge for advertising will vary depending on their target audience. Re-using space It’s not only office buildings that are redefining their commercial spaces. Gyms may be forced to reassess the amount of floor space they need or can afford, given the difficult economic times that businesses are facing right now. Depending on the terms of the lease, gyms may be able to rent out a section of their property to a completely unrelated retail or business entity. For example, the gym could end up sharing its rent with a remote working office or a hairdresser. Gyms rely primarily on membership fees for income, but that often won't be their only revenue source. With the UK economy shrinking, it’s important for gyms to maximise the amount of money they can make because not only are their overheads and expenses going up, but their members are also making difficult decisions about where and with whom they spend their money. More commercial and non commercial gyms are set to open in 2023, but it will be interesting to see whether the number of members follow suit or not and if this will impact how gyms make money in the future.