Everyone’s talking about
Studio bounceback
In the last issue of HCM, we checked with big box operators in the UK to see how trading has been going since restrictions were lifted. This month we turn our attention to boutiques and urban studios to find out how they’re faring. Kath Hudson reports
London has been quiet since the pandemic hit – some days in September 2021 it was estimated office occupancy was as low as 11 per cent.
This lack of footfall has had an impact on attendance at studios – as well as bars, restaurants, takeaways and theatres. The summer holidays exacerbated the problem, with many London workers choosing to decamp and work elsewhere.
However, now we’re into Q4, holidays are over and people are returning to their offices. The first Monday of September was the busiest morning rush hour since the pandemic hit. Tube traffic before 9am jumped by 19 per cent compared to the previous week and bus travel by 43 per cent. Hopefully this is a sign we’re moving back towards the old normal.
So how are urban and city-based operators faring through this difficult time? We ask our panel.
At the beginning of the pandemic, like most fitness operators we quickly pivoted online with both on-demand and live stream content. We call this Frame Studio 8. This studio has supported both new revenue during the pandemic but also retention of current Framers and supporting the community with charitable campaigns. Frame Online has been key to delivering on our brand vision of getting more people moving for mental and physical wellbeing.
Studio sales this summer were up on the same period last year and we’re now driving sales into Q4.
Pre-pandemic we were exceeding budgets and we expect to be back to that level during 2021. For now, we’re focusing on rebuilding the communities at each of the studios.
Our physical locations are all central London-based, so it’s hard to see what consumer behaviour will be like once offices return in the longer-term. In the short-term, we’ve seen people blending online and in-studio, with online our best performing ‘site’ at present.
We’ve seen a trend away from HIIT and more intense classes towards the more fun and lower tempo classes. There could be a lot of reasons for this, but pandemic fatigue is definitely a contributor.
We haven’t seen a change in profile, however we’re seeing a lot of new acquisition from people who haven’t exercised in a long time. We have a long way to go to build back from the pandemic, but the more we as an industry can break barriers to using our facilities the more society will benefit.
We’ve seen some shifts away from central business district usage as commute patterns have changed – more people are working from home, and therefore more likely to work out in suburban residential areas.
However, we’ve observed that both usage and reservations are trending upwards, regardless of geographical location.
In both suburbs and cities, people are eager to return to their pre-COVID fitness routines and among users who have returned to class, average usage is 10 per cent higher than it was before the pandemic, and that number is consistent across suburban and urban areas.
During a recent survey, two-thirds of respondents told us that equipment is one of the driving forces for heading back to studios.
In fact, four of the top five fitness genres with the highest recent reservation volumes use equipment that’s typically not found in home gyms and even less likely to be found in city apartments. However, even those in suburbs who may have been able to invest in equipment during the pandemic are eager to get back to studios, with 81 per cent of people saying they push themselves harder in a group setting than they do on their own. We imagine bookings will continue to grow as vaccinations continue and more people feel comfortable heading back to class.
We’re also seeing a growing trend of vaccine-required classes, especially in cities such as New York and San Francisco, where vaccines are now required for all indoor fitness studios.
In a recent survey, we found 69 per cent of fitness fans strongly prefer returning to classes that require a vaccine, and 18 per cent plan to only return to studios with vaccination requirements. We believe these vaccine-required classes will be an important step to get people back to studios who may have been on the fence about group workout classes.
We’re at about 60 per cent of pre-pandemic revenues, which is a problem. It’s below expectation and something we expect to continue for at least the next seven months.
The damage caused by the UK government’s response to COVID-19 will be long lasting and could even be structural. Freedom Day turned out to be freedom from the hell that England has become and our customers fled to sunnier climes. The challenges associated with travel also mean some people now go away for three weeks to three months to optimise their trip or work from home overseas, so London is much quieter than usual.
We only have residential locations and these have been better used at certain times of day – we’ve noticed that middle-of-the-morning classes and normal off-peak sessions have picked up, which potentially bodes well for the future.
Those who are coming back to the studios are coming more often and are more engaged and, thanks to the vaccine, people are less scared of COVID-19, so government willing, we could go back to normal very quickly.
However, London still seems to be suffering from a malaise and unlike 2020, there’s no push from the government to get people back to their old routines, or back to the office. The closures in March 2020 triggered the most unprecedented government financial response because a three-week closure would be a monumental shock to businesses like ours.
However, here we are in month 19, having been closed for 308 days in the past 500-odd, and it’s a miracle anyone is still here. Another six months of this and London will look like Kosovo in the 1990s.
Since we’ve been allowed to open up, trading has been largely in line with expectations, which is encouraging, though of course we’re all hoping to be able to return to some form of normality/pre-pandemic trading levels across the estate as a whole sooner rather than later.
We’ve seen there’s a strong demand for fitness facilities, and with the easing of self-isolation rules and the ongoing facts that fitness facilities are safe places to be, we feel the future is still bright.
Pre-COVID the whole sector had been on such an upwards trajectory, we’re hoping to return to those days, especially as exercise plays such a key role in physical and mental health.
With office occupancy in major cities estimated to have gone as low as 11 per cent at some points, our suburban sites are performing the best.
However, we’re hearing from our many corporate clients that office attendance is likely to increase during Q4.
Our customer demographic remains the same as pre-pandemic and we’ve seen a good uptick in new customers coming through who had perhaps not been too into fitness before COVID-19 and have since realised how vital it is.
Although our suburban studios remain an important part of our footprint, we’re looking forward to seeing all studios in our sector come back to life with increased office occupancy. With excellent ventilation and thorough cleaning we know studios are very safe places to work out, so we’re looking forward to delivering more classes for more people and creating safe community spaces for people to feel part of something again.
