America’s Going to the Gym Again. That’s Bad News for Peloton, But Great News for Mental Health
Alison Phillips from Iowa State University was an associate professor in psychology. She became so exhausted of running the elliptical machine at her home day after daily for almost a whole year during the pandemic. First, her feet were getting tired from the repetitive motions. But even worse, it hurt her mind. “It’s boring,” says Phillips. “Same thing, all the time.” So two weeks to the day after Phillips received her second COVID-19 vaccine shot, she returned to her local gym. “I needed the variety of activities,” says Phillips. “For not just my feet, but for interest sake.”
Phillips discovered that she is much more outgoing now than during pre-pandemic training. “Seeing people was really important to me,” she says. “This was funny to me.” Before the COVID-19 pandemic, says Phillips, “I didn’t go to the gym for social ties, because I had small children and a full-time job. To be productive, I went to the gym. I would avoid people so I didn’t have to talk.” Now, Phillips found herself budgeting ten minutes or so of extra time at her gym in Ames, Iowa for chit-chat. “I started talking to people that I had seen for years before the pandemic, and I had never talked them,” she says. “But I got back and I said, ‘I’m so happy to see you.’ I was motivated to chat with people. This was a nice feeling to meet people and have their attention. There was a common sense that we wanted to be there. And we’ve made it through this pandemic. Socially, it was a refreshing breath of air. And I changed as a person.”
She also finds that socializing in the gym helps her work out. “My mood has been better,” says Phillips. “And when your mood is better, you have more energy to put into exercise.”
Many Americans, it seems, share Williams’ newfound affinity for the gym. According to CNBC data, gym visits have almost returned to pre-pandemic levels. In October, they were only 8% lower than in the same time period 2019. Planet Fitness, a gym chain that has more than 2000 locations reported solid growth in its third quarter. Revenue increased by 46% to $154.3million, compared with the previous year. Net income rose to $21.9M, against a $3.3M net loss for the third quarter 2020. Chris Rondeau, CEO of Planet Fitness stated during an earnings conference that the membership reached 97% of its pre-pandemic levels. It was more than 15,000,000. Planet Fitness’ stock price rose 16% over the next two days.
Meanwhile, shares of Peloton, the web-connected home exercise bike and treadmill that grew in popularity as Americans were cooped up in their living rooms during the pandemic shutdowns, have fallen more than 40% since the company announced worse than expected earnings on the same day as Planet Fitness’s results. Peloton reported lower than expected revenue, a larger-than-expected loss, and $1.25 per share of net income for the most recent quarter.
Peloton and Planet Fitness had a similar reversal in fortunes during the worst of the pandemic. While home exercise was convenient, crowded gyms were ripe to spread the virus. Phillips—who has studied the benefits of group exercise, which include lower stress levels and significant improvements in mental, physical, and emotional quality of life—worried that gyms would go under. “People were working out at home and became good at it,” she says.
It turns out, people have forgotten their old routines. And this news doesn’t just bode well for Planet Fitness. This is a return to normalcy before the Pandemic. Planet Fitness, which is aptly named after Williams and others who embrace the lost human connection at the gym could be a positive sign that America can become a better place.
Danon Ray is a New York Army National Guard recruiter. He hates working from home. “The house is too familiar, too comfortable, the temperature is not right,” says Ray, 45. “Working out in a gym is a communal, social thing. It’s people who have the same interests who are involved with trying to better themselves. You develop some sort of bond, right?” During the shutdown, Ray did calisthenics alone outside. However, he was able to return to Planet Fitness in Bronx this year. “My job is highly stressful,” says Ray. “And when I don’t go to the gym, I feel like I miss my medication, something that keeps me normal. I’m always saying to myself mentally, ‘you’ve got to go to the gym tonight. O.K., you can’t go tonight? You’ve got to wake up early in the morning.’”
For Sheila Aparicio, a retired NYPD detective, her memberships at Planet Fitness and two other New York City-area gyms don’t really provide social benefits. She’s all about the exercise. “I’m pretty hard core,” says Aparicio. “Sometimes I go to the gym and I see people standing around and all they do the entire time is talk. I stay away from those people.” Aparicio
thought about buying a Peloton during the pandemic, but the price of the equipment—anywhere between $1,500 and $2,500—was a turnoff. So was its bulk; Aparicio thought she wouldn’t have room for it in her apartment.
Despite Peloton’s recent struggles, home fitness isn’t going anywhere. Tonal and Mirror are two other newer brands that have been connected to home fitness. Matt Powell NPD Group’s senior industry advisor, said retail sales for home exercise equipment were up 20% in the first eight month of 2021 compared to the year before. However, sales from June through August of this year fell 5% relative to the three-month prior year. NPD reports that the 2020 sales for home exercise equipment were $3.7B.
Analysts in the fitness industry predict that after a pandemic, workouts will be similar to work environments and that there will be a hybrid approach. Some people have become so accustomed to the convenience of home exercise, they’re swearing off the commute to the gym—much like those workers swearing off trips to the office. Some people crave the camaraderie of the gym or the social aspect of the break area. “There is a place for both,” says Joanna Zeng O’Brien, a senior analyst at Moody’s Investors Service who covers the fitness industry. “In the end, we’re social animals, right? I could see people having a Peloton bike and home and still going to the gym.”
Americans are more aware of self-care after the fallout from the pandemic. Exercise has become a priority—wherever people prefer to do it. The increase in gym memberships and visits resonates even further. “I’ll tell you what makes me hopeful regarding people’s mental health,” says Phillips, the Iowa State psychology professor. “If people are very depressed, they don’t take action to get out there and exercise. To be able to do that, you must have the mental health to move forward and take action. It also reflects positively on resilience. And not only coming out of their homes, but out of their shells.”