Specialist
Former President & CEO at Gold's Gym International Inc
Agenda
- Trends and developments across the HVLP (high-value, low-price), mid-tier and premium segments in the gym industry
- Membership trends and potential long-term changes in consumer behaviour
- At-home fitness equipment vs gym competitive dynamics
- Potential industry disruptors, highlighting Apple Fitness+ (NASDAQ: AAPL) and Amazon (NASDAQ: AMZN)
Questions
1.
Could you estimate where average membership rates sit for gym operators today?
2.
How are membership rates trending for HVLP [high-value, low-price] vs mid-tier vs premium gyms?
3.
What might membership rates trend at the end of 2021 for HVLP, mid-tier and premium gyms, discounting the potential impact of the Delta variant?
4.
How might the Delta variant or any other coronavirus strain change your expectations over the next few months?
5.
What are your expectations for the next year, including some best- and worst-case scenarios?
6.
Do you think that there is any threat around gyms potentially having to shut down again, despite people’s willingness to still go to gyms?
7.
What other metrics would you use to assess the relative health of the gym industry? What about utilisation rates as a proxy?
8.
Are utilisations back up to pre-pandemic levels? Is the average member still utilising its memberships as frequently now vs pre-pandemic?
9.
Is there a subset of consumers that might not be coming back to the gym due to having figured out another way to work out at home? What percentage of people that churned may just not come back altogether because they already have equipment at home?
10.
Do you find that the memberships freezes that were put in effect due to the pandemic have been mostly unfrozen by now?
11.
Has membership rate recovery been generally linear across HVLP, mid-tier and premium gyms? Considering the progression from the membership trough to where they are now, was it linear in nature and that just recently stopped with the Delta variant or might these members mostly have come back specifically in the summer in droves?
12.
Some estimate that 20% of US gyms have permanently closed due to the pandemic. Would you expect that 20% to be replaced by new gyms over the next few years?
13.
Has the bricks-and-mortar gym market shrunk permanently due to the rise of at-home providers and the demographic that is now used to working out at home?
14.
What advice would you give bricks-and-mortar gym operators wanting to compete in a post-pandemic world? Do they have to adopt a different strategy or change their operations or are the factors for success similar to pre-pandemic?
15.
What are your thoughts on players in the HVLP segment and their positioning in this environment? Who might come out of the pandemic much stronger with potentially better poised for market share gains?
16.
Who do you think Planet Fitness – which you highlighted as a standout in the HVLP segment – is most successfully gaining market share from? Is this from peers within the HVLP segment itself, or from other segments such as the mid-tier?
17.
How much white space is there for the HVLP tier to grow? What might be Planet Fitness’s unit growth runway over the next five years? Which regions do you find most of the growth will come from? Where might Planet Fitness be pursuing growth?
18.
Are some of the rent or real estate tailwinds benefiting one tier over the other or is it mostly a benefit for the HVLPs?
19.
What are your thoughts on mid-tier gyms, which you identified as being one of the more challenged segments? Could you outline its potential growth runway and positioning relative to the HVLP and premium segments?
20.
Which mid-tier operators do you think are most favourably positioned coming out of the pandemic?
21.
What are your thoughts on Gold’s Gym and its post-pandemic positioning, under new ownership?
22.
What do you think about LA Fitness and its competitive positioning post-downturn?
23.
What are your thoughts on premium players such as Equinox and Life Time Fitness?
24.
What are the competitive dynamics for at-home equipment players vs gyms? Which tiers or players are most impacted by at-home fitness penetration?
25.
Do you think there’s any risk of potential trade downs, where people that maybe buy a piece of equipment and pay a membership fee for a digital platform alongside being members of a gym such as Equinox downgrade to a mid-tier or even an HVLP gym membership due to the impact of having to pay for two subscriptions?
26.
Which players do you think are strongest in the at-home fitness segment? What are your thoughts on the different modalities that have come to market including even the legacy ones?
27.
Do you have any thoughts around the Apple Fitness+ platform? Do you find it disruptive to the fitness ecosystem, including leading at-home connected fitness players such as Peloton?
28.
What are your thoughts on Amazon’s potential to disrupt the sector?
29.
Do you agree that Amazon’s potential to compete in the sector is by acquiring an existing fitness operator?
30.
What do you think about the sustainability of memberships being at or around 100% of pre-pandemic levels due to at-home technology which we’ve just discussed?
31.
What are the biggest risks to the gym operator or at-home fitness industries and some potential outcomes over the next 12-18 months?
