When the pandemic first hit North America, gyms were just behind airlines among the hardest-hit industries. Even before official shelter-in-place orders, many were quick to close down and transition to virtual everything -- from streamed yoga and kickboxing classes to one-on-one remote sessions with a trainer.
Meanwhile, sales of Peloton (PTON) bikes soared while shares of national gym chain Planet Fitness (PLNT) fell to a record low of $33.93 on March 20, 2020.
Many smaller gyms across the country closed their doors as people canceled their gym memberships en masse.
Even a year later, articles about how the "home-workout revolution may be here to stay" proliferated the internet while Peloton stock was also at a record-high $167.42 on Jan. 13, 2021.
Did The 'Home Workout Revolution' Even Happen?
But just like with the airline industry, gyms began to recover as soon as restrictions started to lift. While flip-flopping somewhat, Planet Fitness stock rose nearly 13% to $79.44 in the last six months while Peloton plummeted by 74% in the last year and employees started describing company morale reaching an "all-time low."
Some Peloton executives were even called out for allegedly using paint to conceal rust on bikes and avoid further losses.
Numbers crunched by investing magazine Financial World show that Google (GOOGL) searches for 'gym membership' in the U.S. are up 176% in January 2023.
While gym interest always spikes at the start of the year, this number is at a record high since people first started using Google to search for things like this in the late nineties and early aughts.
"These findings offer a fascinating insight into how dedicated many Americans are to see through this goal during 2023," a Financial World spokesperson said.
So why did the at-home workout "revolution" ultimately fizzle out? A report by management consulting company McKinsey found that 95% of customers participating in some sort of at-home fitness program missed some aspect of in-person workouts.
Another 50% said their at-home workouts were not as intense or consistent as they are when they go to a physical gym.
Image source: Getty Images
Should I Be Investing In Gym Companies Right Now?
While 70% of fitness companies still planned to continue offering online workout options for the foreseeable future, they have quickly evolved into another option or "perk" to be offered to clients while the main bulk of customers still seek in-person workouts and classes.
This doesn't mean that virtual workouts are "dead" as sales of at-home fitness equipment have also remained strong even amid inflation and there have still been high virtual class sign-ups from those who prefer them. Companies like Lululemon (LULU) are investing in new products like the Studio Mirror for streaming virtual classes.
But interest in virtual workouts does not pose an existential threat to in-person gyms as the question of whether people would go back after the pandemic has by now largely been answered in the affirmative. Despite the 32.45% dip in revenue seen in 2020, the gym industry is predicted to grow at a CAGR of 7.21% a year until 2028.
"We believe that people will employ a hybrid approach, using the plethora of digital concepts and traditional gym experience,” Jefferies analyst Randy Konik told CNBC last year. "Gyms that champion this model will emerge as winners in years to come."
