Have you ever signed up for a gym in January, only to stop going after a few weeks? You’re not alone — and gyms depend on it. But why would gyms want members who don’t show up? Let’s uncover the bizarre economics behind gym memberships.
Why are gyms so crowded in January?
Every January, gyms are packed with new members trying to get in shape for the new year. Up to 75% of a gym’s annual membership signups happen in January. Gyms make a huge marketing push after the holidays to capitalize on people’s fitness resolutions.
If gyms make so much money in January, why do they keep running promotions?
Here’s the crazy part — most January gym members stop going within 2–3 months. Gyms actually depend on these people NOT going to the gym to make money. These short-term members pay a few months of fees upfront, then disappear.
How can gyms stay in business if most members quit after January?
Gyms require long minimum commitments, usually 1 year. Even if you stop going after February, you’re still on the hook for monthly fees through December. Sneaky!
Can’t you just cancel your gym membership whenever you want?
Gyms intentionally make it very difficult to cancel. Often you have to mail a physical letter by certified mail, or show up in person. This stops people from quitting when they stop going. More fees for the gym!
But don’t gyms want people to actually use the facilities and equipment?
While some loyal members work out regularly, most equipment sits unused most of the time. For gyms, unused equipment is more profitable than equipment getting heavy use. Less wear-and-tear and cleaning costs, but with full membership revenue.
How does making cancellation a hassle earn gyms more money?
Remember, gyms have very high fixed costs, especially rent. Yet members don’t make frequent purchases like a store. To profit, gyms squeeze long commitments and upfront fees from members. Difficult cancellation keeps the revenue flowing from non-active members.
What’s the ideal gym member from a revenue perspective?
A member who signs up in January, pays for a full year upfront, then never sets foot in the gym again! Maximum revenue, minimum operational costs. Gyms literally profit from members NOT using the services they already paid for.
So the next time you feel trapped in an expensive gym commitment you’re not using, understand that’s exactly how gyms are designed to operate. The peculiar economics of the fitness industry depend on inactive members stuck paying fees long after their motivation to exercise has expired.
