money What people consider 'wellness' is changing, MindBody CEO explains
The fitness industry is recovering from the shock of COVID-19, and gyms are finding that some pandemic-era trends are subsiding while others are sticking around.
"It starts with how the consumers think about wellness," Mindbody and ClassPass CEO Josh McCarter said on Yahoo Finance Live (video above). "And we say that COVID really created this global wellness imperative where people think about wellness differently."
According to Mindbody's 2022 Wellness Index Survey of 16,000 individuals, 78% of respondents said that wellness was more important than ever and nearly half of those surveyed cited mental well-being as a top reason to exercise.
These findings suggest that the definition of wellness has broadened: It's now more about "integrative wellness," McCarter said, which encompasses other services beyond exercise such as IV therapies, red light therapies, and cryotherapy.
"So as we see that now, more and more people are thinking about things like meditation and also those type of practices that can help them with their stress management and with their mental health," he added. "And so we think that services around that area will continue to grow."
'Communal animals'
Fitness still remains a top priority for Americans, though how they seek it out may be changing again.
Virtual workouts and online fitness classes, which surged during the pandemic, are gradually becoming a thing of the past as more individuals return to gyms nearly two years after COVID-19 forced many businesses to close their doors.
"Well, we're definitely seeing a resurgence in demand," McCarter said. "About 83% of consumers now are booking in-person classes, so that's really great news for a lot of the small and medium businesses that serve the market that were closed due to restrictions over the last couple of years."
Between March 2020 and December 2021, 25% of health and fitness facilities permanently closed, according to data from The Global Health and Fitness Association (IHRSA). Additionally, 30% of studios closed, and more than 1.5 million industry jobs were cut.
While the pandemic is far from over, more Americans are getting vaccinated and states are rescinding mask mandates, leading many gyms to maintain a hybrid approach between in-person and online classes. According to McCarter, some have cut back virtual workouts to once a week "rather than four or five times like they used to during the pandemic."
Anthony Geisler, Xponential Fitness CEO, agreed that rise of virtual workouts during the pandemic hasn't permanently disrupted in-person fitness.
"I mean, look, working out at home has been around forever. I tell people my mom did Richard Simmons sweating to the oldies when I was a kid. So it's not that working out at home is new," Geisler said. "It's just a small part of the pie. And so it got a lot of attention during COVID because people had no other choice but to work out at home. But we're communal animals. People love to be inside the studios."
"There's definitely a lot that's happening," McCarter said. "Right now, it's just coming back into the physical spaces. We certainly have seen the trend with boutique fitness that Mindbody has really been part of and supported that industry ever since its inception in the early 2000s. And so we do see a move away from the larger-format gyms into more boutique fitness, whether that's spin or yoga or Pilates. That market still seems to be growing nicely."
Inflation in the fitness industry
McCarter also touched on whether or not he expects inflation to have an impact on demand for classes and wellness services.
"Well, it is concerning on one level," he said. "But on the other side, again, of our business with ClassPass, that really is a model that allows somebody to buy, effectively, a discounted service and be able to go to multiple different properties to redeem, effectively, points that they get in exchange for their membership. And so that's something that we've seen actually a nice increase on that side of the house where people are thinking about having different modalities being able to tap."
ClassPass offers an array of memberships that cater to different budgets. Memberships begin at $15 a month for 6 credits and go up to $199 a month for a total of 100 credits. Credits can be used to book a class or appointment and vary by location, class type, or popularity. Members can choose from pilates classes, gym time, meditation classes, or even book a manicure at a partnered salon.
"Being able to offer those types of services at a discount, I think, is really where the market is going right now," McCarter said. "And that's one way that we can help more consumers get into the broader wellness industry."
Sandra Salathe is an editor at Yahoo Finance.
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