Poor gyms. They’ve suffered a few knocks recently. First there was an OFT investigation into unfair membership contracts. Then there was the Twitterstorm after LA Fitness refused to cancel the contract of a couple when the woman became pregnant and the man had lost his job. And this double-dip recession certainly isn’t helping membership numbers.
But out of the ashes rises a phoenix – in the form of no-contract, budget operators. A few weeks ago, not one but two leaflets advertising new no-contract gyms in my area dropped through my door. One was from The Gym Group, which has been on the scene since 2008 and currently has 20 gyms across England, with plans to open 20 more by the end of the year.
The other leaflet was the bright orange and familiarly fonted easyGym; yes, Stelios has entered the fitness market. So far there are only two easyGyms, but world domination is projected, with 50 planned for the UK in the next five years and up to 1,500 across Europe. Both Stelios and The Gym Group are offering a cheap monthly membership, with no tie-in contract (£16.99 The Gym Group, £17.99 easyGym), and both offer £5 one-day passes.
The advantages to the consumer are obvious. At around half the price (or less) of traditional gym membership, there is a sizeable financial saving. With no contract you can cancel any direct debit for a languishing membership whenever you want. And cheap one-day options mean people can try out a gym before they take out a membership, or use it infrequently, if that’s what fits in with their lifestyle.
So what about the disadvantages? Well, first off there are the crowds. When I took a Body Pump class at the Wood Green easyGym in north London, the gym floor was busier than I’ve ever seen one. It was peak time – 8pm on a Monday – but apparently the gym is busy throughout the day. Not everyone sees this as a disadvantage, though: 63-year-old David has been using a gym on this site for years (it used to be a Virgin Active) and he thinks its latest incarnation is an improvement. “I like that it’s busier – it’s more friendly. The equipment is much better and I am saving over £20 a month.”
There’s also the fact that budget gyms offer a stripped-down package. There are usually no ‘extras’ like swimming pools or saunas. EasyGym does offer exercise classes, but a membership that includes them will set you back £34.99 a month. Suddenly it doesn’t sound quite so cheap (though you can still pay £5 to attend a one-off class).
Then there’s the theory that a good deal could end up costing more in the long run. The lower price tag means people are more likely to retain a direct debit for an unused membership, as it’s only a few quid each month. And as most budget gyms still charge joining fees, there is a deterrent to cancelling if you think there is any chance you are likely to want to go back – and as most of us know, it’s easy to kid yourself when it comes to exercise.
But easyGym CEO Paul Lorimer-Wing says budget gyms offer great value and more choice for the consumer. While the typical business model of a gym relies on many people signing up and few actually coming, the model for budget operators is different: people can leave whenever they choose, so the aim is to keep them coming. “This model forces us every day to work for customers. They can leave as soon as they are not happy with the service, so the service has to be good. We are attracting people who have never used the gym before,” says Lorimer-Wing.
Talking to people working out, it certainly seems to be filling a gap in the market. Olivia, 41, was attracted by the lack of contract. “I was happy I didn’t have to tie myself into anything, I could just see whether I would keep using it or not.” So far she has: it’s been six months and Olivia still comes to classes on most days. Ugur, 18, is visiting friends in the area and has paid a fiver for a one-off use. “I like that I can work out with my friends when I visit them. Things like the changing rooms are a bit rubbish, but you get what you pay for and I would definitely come again.”
So do these budget operators spell the end for gyms as we know them? Steve Dick, sales and marketing director at Virgin Active, doesn’t think so. He believes there is a place in the market for both budget and high-end gyms. “It gives the consumer a wider range of choices. Budget gyms will attract first-time exercisers into the market and over time these people may migrate to clubs such as ours,” he says.
In fact, Virgin Active also offers no-contract memberships (from around £60 to £85 per month, depending on the club) and only introduced contracts in 2004 due to demand from members for better rates for those who were prepared to commit for a longer period of time.
There’s no doubt that more choice can only benefit consumers. With a low-budget option on offer, the high-end gyms will have to work harder to justify the increased cost of membership. But for many people the real problem with gyms is not what they charge, but the way they go about it – the hard sell.
That’s where Jamie Ward, CEO of PayasUgym, thinks his business can help. Set up last year, PayasUgym has teamed up with hundreds of gyms across the country to offer one-day passes, with no induction or joining fee. “I came up with the idea when I was training for a swim and moving around the country a lot for work. It was impossible to even find a gym, never mind gain access,” he says.
Users of the site give their postcode and a list of nearby gyms is generated. You buy your pass online and just show your mobile phone to reception staff when you arrive at the gym. You don’t have to give any personal details, which means you won’t be bombarded with calls from the gym trying to get you to buy a membership.
“What PayasUgym offers is completely fair. Gyms are finding it very hard to hold on to members at the moment, yet we’re finding that 20% of our users go on to sign up,” says Ward. He believes this is because users are able to assess their exercise needs and likely gym usage in a non-pressurised way.
If you use a gym regularly then a membership option isn’t a rip-off; it’s a good deal. We all know that for many people, their intentions are good, but other things get in the way. What both budget gyms and PayasUgym offer is the opportunity to exercise at your own pace and convenience, without having to spend a fortune each month on something you might never use.
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