Running buddies Misa Dugally and Katie Ownbey opened the treadmill studio Stride in Pasadena, California, in 2016. Their second location, in Orange County’s Tustin, had been open only 17 days before the coronavirus pandemic closed its doors March 19.
When they reopened on May 26, the experience was drastically different.
Attendees checked in remotely on the studio’s app and entered through a propped-open door, touching nothing en route from their car to their assigned Woodway treadmill. There’s no towel service, no lockers to stash your stuff, and definitely no showers. Though the studio normally holds 25, classes right now max out at nine runners and walkers. The first week, they averaged about 70 percent of that new nine-person max, Dugally told Runner’s World.
A handful of exercisers wore masks. One, who has a child with underlying health conditions, snapped photos of the touchless hand sanitizer stations and upgraded air purifiers to text to her concerned husband before class began. And afterward, no one lingered or chatted.
Dugally was ecstatic to welcome her community back. But while Orange County was originally less impacted by the pandemic than other areas, as of June 29, they’ve now accumulated 12,608 cases and 326 deaths, in a population of about three million.
And as they look up the road from the pandemic, Stride and other running facilities like it face a steep incline. Most fitness studios operate on slim margins, and reduced class sizes and increased expenses related to virus protection will slash those further.
They’ve spent months figuring out how to minimize infection risks and navigating ever-changing state and local regulations about when and how they can reopen. Now, the killing of George Floyd and the protests and political unrest in its wake have further pushed timelines and complicated messaging, forcing business owners to reckon with their role in fighting racism as they worry about their financial solvency.
Even as the indoor running facilities begin offering socially distanced workouts, it’s not entirely clear if their clientele is ready to come back. In a national survey of 1,000 fitness enthusiasts released by media company aSweatLife in late May, one-third said they don’t plan to return to the gym within three months of restrictions lifting. In another, conducted by investment bank Harris Co., 34 percent of gym members planned to cancel post-COVID.
Even Dugally’s own sister, who is two years older, refused Dugally’s invitation to attend Stride’s first classes upon reopening. It came as a shock, a small personal struggle amidst a bigger crisis.
“This is not going to be a profitable business right now. It just isn’t,” Dugally said. “We’re just going to have to figure it out.”
The Pre-Pandemic Peak
Before COVID-19, the fitness industry overall raked in $94 billion yearly—and boutique studios were booming. In larger and even mid-sized cities, specialized spaces to bike, stretch, bend, and run beckoned on nearly every corner, said Jarrod Saracco, a fitness-industry consultant outside Philadelphia who calls himself the Health Club Doctor.
Treadmills, often maligned by outdoor runners, rank among the oldest and most recognizable pieces of fitness equipment. However, even up against high-tech options like virtual-reality cycling and infrared-heated yoga, ’mill-based classes were surging in popularity. They replicate many of group running’s benefits, and allow those at different paces to sweat together, said Pam Kufahl, director of content and engagement at fitness industry news and events company Club Industry.
The number of people booking them increased 82 percent between 2017 and ’18 alone, per the fitness-membership service ClassPass. They pounded out miles at national studio chains like Barry’s Bootcamp and OrangeTheory, big-box gym classes like Precision Run at Equinox, and independent sweat shops like Chicago’s Runaway Fitness and Thoroughbred Run Studio in Mill Valley, California.
Franchises like private equity-backed holding company Xponential also took notice of the trend. They bought the Stride concept from Dugally and Ownby at the end of 2019. It’s since become the fastest-growing of the company’s eight brands, according to franchise president Jeff Stokes. More than 50 owners have purchased territory rights to open new locations. Three deals have even closed during the pandemic, a sign that some studio owners and their financial backers still see hope on the other side, he said.
But many existing studios remain in suspense. New York’s Mile High Run Club, a New York City-based treadmill studio that opened in 2014, served about 45,000 runners in the first quarter of 2020, according to co-founder and CEO William Heath. While all three Mile High locations remain closed, Heath spends his long workdays on calls with accountants and real estate attorneys and in Zoom meetings and Slack chats with colleagues.
“There’s a webinar, roundtable, and insider group for everything at the moment,” he said. “You’ve got to balance it with the decisions that need to get made to solve whatever is the next most important thing.”
One early tough call was laying off all 20 coaches. Mile High has been clear they’ll be rehired when classes resume. In the meantime, letting them go so they could collect unemployment “was the kindest thing we could have done,” he said.
Many studios received help—up to two and half times their monthly payroll—from the Paycheck Protection Program (PPP), said accountant Eric Killian, founder of The Fitness CPA. However, the PPP was primarily designed to keep workers in jobs. Coaches and trainers are often part-time or temporary, including college students who went home when schools closed, pointed out Kristine Theodore, who owns Chicago’s Runaway Fitness with her husband Ted.
In order for PPP loans to be forgiven, only 25 percent could go to rent—the biggest line item for most studios. Depending on the city and the size, studio space often costs around $7,000 to $13,000 a month. “They’re basically giving you pennies to pay thousands of dollars; that ratio doesn’t work,” Theodore said.
Few fitness businesses will endure the pandemic without rent relief, Killian said. He recommends studios ask to defer payments for the months they’re closed until 2021, and has even provided a script to help them ask in the most effective way.
Cutting expenses is even more critical given the significant costs associated with reopening. Air filters, individual mics for coaches, cleaning products—it’s all expensive, but essential in both battling the virus and members’ fears.
“We want people to feel safe that at Mile High, we use a hospital-grade cleaner,” Heath said. “Six months ago, people would have been emailing me asking if our products were green. Now, the smell of chemicals is bizarrely refreshing.”
The ability to appropriately sanitize is one place in which treadmill studios might have a leg up on those primarily offering boot-camp or HIIT-style classes, Kufahl said. With one primary piece of equipment instead of dozens of battle ropes and kettlebells, it’s easier to keep people separate during class—and wipe off their sweat and other secretions afterward.
Studios could even consider barriers between treadmills, like those installed at Pure Fitness gym in Hong Kong. High-intensity indoor classes—where runners are both inhaling and exhaling deeply—pose an increased risk of virus transmission, especially if people aren’t wearing masks, said Mark Crawford, Ph.D., an immunologist at Case Western Reserve University in Cleveland. Indeed, one recent study from South Korea linked 112 cases of COVID-19 to Zumba classes.
Though the shields would add another obstacle for the virus to overcome, many coaches and owners are reluctant to invest in them, saying they’d detract from the communal experience.
“I’m not going to put people in little hamster-cage treadmills,” said Jake Schmitt, who co-owns Thoroughbred with his mom, Laura. “That’s not the business I got into.”
Most U.S. studios have opted to shrink their class sizes down and put them on digital platforms. Of course, most people don’t have a treadmill at home. But many of the coaches are also personal trainers—Runaway’s Theodore, for instance, used to own a Pilates studio—and tread studios have offered everything from interval-based cardio sessions to strength and mobility classes for runners.
Nearly every studio will have to go digital to survive, but the space is crowded, Sarocco said. Low-budget Instagram or Facebook Live classes may have kept members engaged during the pandemic’s early days, but moving into the virtual space longer-term means competing with established players like Peloton.
“The experience of being in the studio with all those people and feeding off the energy and the excitement—nothing beats that,” Saracco said. “But Peloton has done a good job with creating great content and giving people as close to a studio experience as they can get in the privacy of their own home.”
After Thoroughbred closed its doors on March 15, the Schmitts launched the Thoroughbred Runcast—a podcast feed featuring 30- to 45-minute coached workouts with the same perceived-effort intervals and motivating language runners find in their studio.
Jake records them at home, using GarageBand—“it’s amazing what a YouTube tutorial can teach you,” he said—and works hard to convey the same upbeat delivery his athletes are used to. “I picture the studio, and some of our loyal runners. I think about the little smile or laugh they might give me when I say something ridiculous.”
There’s no charge to download them, but the studio is asking for donations. At first, the funds went back into the business. But on June 9, Thoroughbred announced all money raised would go to Forward Together, an Oakland-based equal rights organization, with a match of up to $1,000 from the studio.
Like Thoroughbred, Mile High is developing audio classes. Both brands said that when they reopen, they’ll be banking on their coaches’ credentials and connection with their communities, and the one thing they can offer that Peloton doesn’t: a combo of digital and in-person packages.
“I don’t think we’ll ever get back to being 100 percent just in-studio now; the digital really becomes complementary,” Heath said. Mile High will offer a triangle of in-studio, outdoor, and video-on-demand workouts. “Hopefully, between the three, we can create a really robust offering for runners.”
The Road Ahead
On June 5, Runaway took its workouts outside, where groups of up to nine members did classes combining cardio intervals and strength training on the banks of the Chicago River. On Monday, June 29, they reopened indoor classes at 25-percent capacity and with a lengthy list of protocols, including completion of a pre-workout symptom checklist, mandatory masks, and one-at-a-time studio entry. It won’t work for the long term, Theodore said, but she hopes it can sustain them for now.
While no one knows for sure how the post-pandemic economy will look, many fitness businesses will choose—or be forced—to close their doors permanently, Killian said. Heath agreed: “Boutique fitness studios … we’re in for a rough six to nine months, probably even a year,” he said.
For many, though, the pandemic and the increased attention on the health consequences of racism have highlighted the role fitness can play in physical and mental healing. In the same survey predicting gym cancellations, more than one-third of respondents said they planned to move their bodies more than they had previously. Many of them are already hitting the streets and sidewalks.
“For us, running in the studio was never meant to be a substitution for running outside. If anything, it’s always been a supplement,” Heath said. “We’re really excited there’s a whole new breed of corona-runners out there who would never have thought about running before.”
What he and other studio owners and coaches are hoping they’ll soon realize is the value of “living the sport of running”—not merely passing miles alone, but striving for more, together.
“As a coach, I desperately miss my community of athletes,” Laura Schmitt said. “I miss seeing my men and women who are getting on the starting line or getting on the treadmill saying, ‘What do you need me to do? I want to be better.’ We as a population desperately need that.”
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