Challenges & Opportunities in Strategy as Gyms Reopen

It’s no secret that health clubs worldwide are going through challenges, and now is the time to exchange ideas about how to overcome these difficulties. The best way for the fitness industry to tackle reopening is to learn from others who have gone through the journey.

We spoke to Loni Wang, owner of Shenzhen Catic Wellness Group in China, about the reopening of her facility. Wang said she hopes that by sharing her experience, other club operators and owners will be able to reopen successfully.

In this four-part series, we will cover the hardships that impacted Catic Wellness’ reopening and how the club overcame these obstacles. We’ve separated these challenges and opportunities for health clubs into four categories:

1. Strategy,
2. Finance,
3. Member Retention, and
4. Leadership.

In the U.S. alone, roughly 91% of gyms—from big health clubs to small studios—closed due to coronavirus-related mandates. Fitness facilities will face many challenges during the process of reopening.

During our conversation with Wang, she spoke about the issues she sees the fitness industry facing, such as:

• Increased negative perceptions of the industry,
• Reduced number of attendance, and
• Financial burdens.

Since reopening, Wang sees more opportunities arising than challenges. So, let's look at five strategic challenges and opportunities facing clubs after COVID-19.

Club Strategy Challenges and Opportunities

Wang identified two main challenges for health club strategies:

1. Adapting to New Guidelines
2. The Fitness Industry's Current Business Model

It isn't all bad news, though, in facing these obstacles, she also discovered three opportunities:

1. Now is a Good Time to Change Our Business Model
2. Using Digital Platforms to Stay Connected with Members
3. Building Relationships with the Medical Community

While the COVID-19 pandemic has affected every industry, Wang says it's been a "very, very bad situation" for the fitness industry in particular. So, let's start with the two health club strategy challenges she identified.

Challenge: Adapting to New Guidelines

In China, the government closed clubs in January. Members weren't able to start returning until early April. Catic Wellness was finally able to open their first club back up after 49 days, but it would be 105 days until they could reopen all locations.

Even then, to prevent any resurgence of the coronavirus, clubs across the country faced changing guidelines and restrictions resulting in the opening, closing, and reopening of many businesses. To ensure her club's survival, Wang met with her staff during Chinese New Year, breaking into nine small groups to discuss how to manage the situation. The meeting ended with the understanding that as a company, they would need to have three things:

1. the confidence in their company and the fitness industry,
2. an understanding of what they would need to change to continue to make revenue and pay their staff, and
3. the ability to quickly enact any changes required resulting from government regulations, safety best practices, or changing consumer trends.

Member safety continues to be top of mind for all club operators and owners. Many have used this international four-pronged framework as part of their reopening plans to mitigate risk and help ease the fear of returning members.

Challenge & Opportunity: The Fitness Industry's Current Business Model, Now is a Good Time to Change

One challenge that is also an opportunity is the fitness industry's current business model.

"[The industry's] challenge is our business model because we need the people to come in [to provide a] service," said Wang. "So, this is a good opportunity ... to find a solution to change our business model, and that's what we have done."

Part of changing the business model at Catic Wellness was the introduction of apps and increasing online training and nutrition services for members. This allowed Wang's staff to continue making money during this crisis.

"We don't want people quitting their work, you know, we want them [to stay]," said Wang.

Opportunity: Using Digital Platforms to Stay Connected with Members

The ability to connect with members and staff through digital channels has proven successful for fitness facilities that are still closed, and for those reopening. Wang said that taking advantage of digital resources is vital in showing members that their health club is available to support and help them, regardless of whether they can physically be in the facility. Hosting exercise classes and training sessions online have also been beneficial as a source of revenue and community building.

Opportunity: Building Relationships with the Medical Community

As one of China's first club companies to actively promote wellness, and the cooperation between health clubs and the medical community, it's no surprise that Wang can see the opportunity to bring the fitness industry closer to the healthcare fields.

Wang said that the pandemic has opened doors for the industry to work with the medical community. Physical activity works to improve overall health as well as mental health. Studies show that fitness can reduce risk of heart disease, lower the risk of developing some cancers, improve cognitive function, and more.

Linking with the medical community can increase trust with members and help in reversing the stigma that gyms are dirty. It’s a simple connection that can create a positive tone for health clubs. Wang said if a doctor prescribes a patient exercise, they need to do it, and that's where the fitness industry can help.

"It's not, come to our club," says Wang. "The hospital has a special hour, and our personal trainer works with a doctor, and once [the patient] has the habit, then they come to our class."

While health clubs can greatly benefit from this type of mutual relationship with the medical community, at its core, it's about improving the health of communities through physical activity.

What’s to Come

“At this moment, I think, [for] all of our club owners, we need to know they have confidence [in] our industry,” said Wang. “We need to share with each other. We need to [be] working together.”

That's part of our job here at IHRSA. We’re constantly working on resources to guide the global fitness industry through situations such as COVID-19.

This is new territory for everyone, which is why it’s essential to be confident, have a game plan, and work together by sharing resources and successes. Looking for more strategy resources? We’ve put together a list of webinars, e-books, and articles from strategic plans to workplace culture.

Stay tuned for part two of the article series, where Wang will identify financial challenges and opportunities for health clubs.