Fitness clubs with monthly payments are growing in popularity

The active development of new budget chains in the fitness services market has led to an almost doubling of the market share of clubs with recurring, that is, monthly, payments over the year. The popularity of this format is facilitated by the reduced consumer planning horizon after two crises and the increase in the share of young audiences. But working with monthly pricing is mainly beneficial for new clubs with a limited range of services. For full-size venues, switching to a new model means a loss of almost 60% of revenue.

Clubs with recurring payments in the first quarter of 2024 accounted for 8%, or RUB 3.46 billion, of the total volume of fitness passes sold (RUB 63.5 billion). A year earlier, the figure was almost half as much – 4.5% (1.59 billion out of 35.29 billion rubles). This data is provided by FitnessData, predicting that by the end of 2024 the share of monthly payments in general in the Russian fitness services market will reach 10%. President of the Association of Fitness Industry Operators Olga Kiseleva notes that the most noticeable growth of clubs with a recurrent model can be seen in Moscow and the Moscow region, where they now generate up to 15% of total revenue.

Recurring fitness clubs offer a subscription model: clients are charged a fixed monthly fee. The system, according to Ms. Kiseleva, is popular in European countries, accounting for 90% of sales on the market. But abroad, such agreements often provide for penalties upon termination. Such sanctions are not yet practiced in Russia. Managing partner of the Zamoskvorechye bureau Dmitry Shevchenko explains that from the point of view of legislation, the consumer has the right to refuse the service at any time, and the paid price for the unused period must be returned. The fine can be qualified as a violation of consumer rights, the lawyer says.

Ms. Kiseleva explains that in Russia, in most recurrent clubs, visitors make an initial payment in the amount of one or two monthly contributions. If regular payments are interrupted at any point, they usually need to be repeated. The head of FitnessData, Maxim Borovikov, considers the entrance fee to be the only legal option from a legal point of view. Clubs with recurring payments, he said, have existed for a long time, but their development became widespread after the pandemic.

Olga Kiseleva believes that the popularity of the model is facilitated by changes in consumer habits, which have been influenced by recent crises. Maxim Borovikov notes that the growth of the new model is ensured by huge investments in its development and low cost of services. “Currently clubs operate at high density, 3–5 people per 1 sq. m. m in terms of the number of cards, and with an average bill of 2–3 thousand rubles. per month per client,” he says. Spirit Fitness CEO Elena Egorova cites the growing number of young clients as a factor in the growing popularity of monthly payments: now 20% of fitness club visitors are those who are 15–24 years old.

The growing popularity of recurring clubs occurs against the backdrop of the overall growth of the fitness industry. Its turnover in the first quarter of 2024 increased, according to FitnessData, by 22% year-on-year, to RUB 63.5 billion. The cost of services has increased by 10%. By the end of 2024, analysts expect an increase in industry turnover by 17%, to 250 billion rubles. In the recurring segment, according to FitnessData, there are mainly relatively young, actively developing networks: DDX (announced the opening of 45 clubs this year), Spirit Fitness (15), Urbanfit (6–10), Yobody Fitness (plans several). Some networks are trying to implement a recurrent model in select markets. Thus, Fizkult and World Class in Nizhny Novgorod sell up to 20% of cards using a recurrent model, says Mr. Borovikov.

President of the National Fitness Community Elena Silina draws attention to the fact that fitness clubs with recurring payments operate primarily as studios or gyms without a pool; they have a minimum number of employees; trainers come upon request. For clubs with an expanded range of services, this model is often ineffective, the expert adds. Director of Franchising and Development at XFIT Irina Troska says that the margin of mini-format XFIT Point clubs (operating on recurring payments) is now slightly higher than full-format XFIT.

According to Elena Egorova, the margins of recurring clubs are achieved by reducing costs and a larger base of visitors, although only 30% of clients train regularly. With this model, adds Maxim Borovikov, for large clubs the cash gap in the moment can be up to 60% of revenue.

Alexandra Mertsalova