Many of those are smaller “boutique” studios, which one national expert said may have trouble surviving in the long run. But their offerings run along the top national trends in the fitness industry, particularly high-intensity interval training, or HIIT, and group fitness settings.
Industry data indicates Gilbert is ripe for such businesses. Market Potential Index numbers from data analytics firm Esri indicate there are more Gilbert residents who typically spend between one and six hours per week exercising than the U.S. average•.
Working in a competitive market, some of the businesses are finding ways to attract customers so that they can survive as a boutique business against powerful “big-box” gymnasiums, owners said.
“If you’re filling a need and you’re filling a niche and you’re providing what you promise, you’re going to be successful no matter if you’re a big gym or a small gym,” said Jess Janssen, owner of Delta Life Fitness, which opened in March 2019.
Gilbert’s favorable fitness market
The metrics for Gilbert are favorable to opening a fitness studio in town. The town is growing and remains on the young side, with a median age of 33.9 years, according to the American Community Survey’s latest five-year profile (2014-18) for Gilbert from the U.S. Census Bureau.
Furthermore, median household income, according to data analytics firm Esri, reached $95,766 in 2019 and is expected to grow to $105,984 by 2024.
Those numbers alone are attractive to some gym owners, such as Jason Todd, who opened Tough Mudder Bootcamp in the SanTan Pavilions in October. Per-capita income was key data in obtaining a Small Business Administration loan, he said, as well as the number of stay-at-home parents and work-from-home adults. He found those numbers to be high in Gilbert.
“Our time is valuable,” Todd said. “And so coming in here to a place like ours, they get a good
warmup and a good cooldown and a great workout in 45 minutes. They’re in and out, and they can get on back to their life.”
Gilbert residents are also more likely to exercise than the average person. Esri data shows 17.8% of adult Gilbert residents exercise two or more times a week at a club. Esri gives that a Market Potential Index score of 124. The MPI represents the relative likelihood of adults in the specified trade area to exhibit certain consumer behavior or purchasing patterns compared to the U.S. An MPI of 100 represents the U.S. average.
Adult Gilbert residents who exercise at some other type of facility two or more times a week is 9.4% for an MPI of 109.
Fitting in with national trends
Several of the gyms that opened in the past year could be described as boutique gyms, something that Walter Thompson, an associate dean for Graduate Studies and Research at the College of Education and Human Development at Georgia State University and former president of the American College of Sports Medicine, said did not fare well as a trend in ACSM’s annual worldwide survey of fitness trends for 2020.
ACSM has done the survey annually since 2006, in part, he said, to help people in the fitness industry differentiate between what is an actual trend and what is a passing fad.
“It’s like with Pilates,” Thompson said. “A decade ago, there was a Pilates studio opening on every corner. Ten years later, you’d be hard-pressed to find a Pilates studio.”
But the smaller gyms opening in Gilbert frequently are specializing in two of the three top trends in ACSM’s latest survey: HIIT, which came in it at No. 2, and group training, which was No. 3. Wearable technology was No. 1.
Todd’s Tough Mudder studio is an example of a place that does HIIT and group training. He said the science behind HIIT is a reason for its popularity.
“It allows for a longer metabolic burn throughout the day so people can see results as long as they’re balancing that with some good nutritional habits,” he said. “They’re getting a high-intensity workout, getting their heart rate up, getting their body moving, which continues that burn throughout the day.”
Group training regained popularity, Thompson said, out of the economic landscape of the Great Recession, when personal trainers could not find people who could afford to do one-on-one training, but they could go in as a group. He also said it appeals to the millennial generation’s lifestyle.
“They like to be alone with their device,” Thompson said, “but they still need socialization. They go to group training for their need to be part of the group. And then after the hour, it satisfies that need.”
Reducing the business risks
Of the 12 brick-and-mortar gyms that opened in Gilbert in 2019, two already have closed. That underscores the risks of the business.
Thompson said boutique studios have trouble staying afloat in markets with many big-box gymnasiums that can get a larger volume of clients and offer discounts and lower membership costs.
Delta Life Fitness’ Janssen has an answer for that: “You get what you pay for.”
Janssen said at the rates that big-box gyms charge, they need a lot more members to make the business model work.
“Here with the boutique style, the cost is a lot more contracted ... smaller space; we have more flexible equipment, whereas they have to buy and maintain contracts for all of those big machines. So their overhead is actually a lot higher than ours.”
With the smaller operation, Janssen said she is able to give more personal attention to her approximately 200 members, checking to see if all is well when she does not see a member for a few days.
Those touches, she said, make it worthwhile for her members to pay the extra money. At a big-box gym with a small monthly fee, it is easy to fall away from attending with no one noticing, she said.
Like Tough Mudder’s Todd, she studied the area’s demographics on income and single-income families to zero in on a location, a decision that the Delta Life Fitness corporation signed off on. The corporation’s backing of her as franchisee in marketing and operations have helped her get off to a strong start in her first year, she said.
“Almost nobody has to cancel Delta Life because they didn’t like it,” she said. “Most of the time it’s just life circumstances.”
Freeing herself from the overhead of a brick-and-mortar space proved beneficial to Donna Chasan, who opened Thrive Performance Yoga in January 2019, only to close it in summer to get out from under the pressure of a lease.
Now Chasan puts her efforts into Yoga Party Live, which runs public yoga outings in Gilbert at venues such as Postino’s, Culinary Dropout, Topgolf and Sandbar. Outdoor outings also made the ACSM’s survey list as the No. 13 trend in fitness for 2020.
“I think people like to get up, meet up with a group and have a good time working out, then maybe stay and get some food,” she said.
Thompson said the adaptability that Yoga Party Live showed is what it takes for boutique gyms to survive in the market.
“They’re doing a great job,” he said. “They’re offering a great service. It’s just they have to be adaptable.”