Today’s edition brings you a summary and analysis of Hapana's 2025 Fitness Forward report (focused on the US market). It reveals that (amongst other data points):
35% of gym goers/users request personalized plans
34% seek wellness integration
33% want flexible options.
It also analyses how boutique fitness delivers more value from Day 1 , retains customer more efficiently and how community and technology are making this space evolve at a faster pace than expected.
Enjoy the read.
The 23% problem: why traditional gyms are built to lose members
The fitness industry is changing faster than expected. The average traditional gym loses 23% of its members annually, rising to 28% for larger facilities (US data based). Meanwhile, boutique fitness studios maintain 70-80% retention rates at 3-10x the price point.
This isn't a marketing problem. It's an infrastructure/set-up problem.
Hapana's 2025 Fitness Forward Report exposes why traditional gym churn isn't inevitable, it's architectural. While one segment of the industry accepts member loss as normal, another has built systems that create retention through design rather than hoping for it through acquisition.
The churn crisis by the numbers
The data reveals a clear pattern: gyms scale operations but not engagement systems.
Member turnover increases with scale:
Single location gyms: 20%
2-5 locations: 23%
6+ locations: 28%
Staff turnover mirrors member churn:
Small gyms: 14%
Medium gyms: 23%
Multi-location operations: 22%
This isn't coincidental. The industry's growth model prioritizes physical expansion over operational depth. The result: one in four members walks away from the facility meant to support their health goals, while one in six staff members exits annually.
The value perception gap
Members are signaling exactly what they need, but gyms are responding with the wrong solutions.
What members are requesting:
38% ask for membership discounts/promotions
35% want personalized workout plans
34% seek additional services (nutrition, wellness programs)
33% need expanded class schedules
32% demand more membership flexibility
The pattern is clear: when 38% of members ask for discounts, they're not saying the service is too expensive. They're saying they don't perceive sufficient value for the price. When 35% request personalized plans, they're revealing that generic access to equipment isn't enough.
Traditional gyms compete on square footage and equipment count. Members are asking for meaning, clarity, and support.
The technology adoption paradox
The report highlights a critical infrastructure gap:
Current adoption rates:
Only 31% of gyms use AI for personalized workout plans
Only 31% leverage AI for class optimization
Only 30% provide personalized recommendations via app
Only 43% use their management software for customer analytics
The staffing challenges
The report reveals a staffing paradox that directly impacts member retention:
Staff priorities vs. reality:
71% of owners prioritize improving employee recruitment/retention
32% cite staff recruitment/retention as a top challenge
Yet turnover sits at 17% industry-wide, rising to 23% for medium gyms
Multiple gym owners in the report cite the same failure: prioritizing equipment and physical aspects over people and community.
The generational technology divide
The report exposes a concerning gap in data literacy:
Analytics usage by generation:
Millennials (31-45): 49% use gym software for customer analytics
Gen Z (18-30): 31%
Established owners (46+): 30%
Only 34% of gyms use analytics to understand their members. This means 2/3 of gyms are making strategic decisions without data on member behavior, engagement patterns, or churn indicators. They're flying blind while complaining about turbulence.
Even more telling: established gym owners (46+) are twice as likely to not use AI (29% vs. 12-16% for younger owners). The operators with the most experience are the least likely to adopt the tools that create personalized member experiences.
The infrastructure vs. hardware problem
The industry has systematically over-invested in hardware and under-invested in architecture:
Owner-identified failures from the report:
"I underestimated the power of community and focused too much on equipment upgrades, until half of my members left"
"Biggest failure has been not adjusting to the economy right away"
"I struggled with keeping members engaged with new activities"
"I didn't adapt to new technology as fast as I should have. I didn't realize how much it would impact customer retention"
These aren't operational issues. They're architectural ones. The traditional model assumes members want access to equipment. The data shows members want systems that help them achieve outcomes.
Why members clubs and wellness centers are winning
While traditional gyms struggle with 23% churn, a different category of facilities is rewriting retention economics:
Boutique fitness studios: 70-80% retention vs. 60% for traditional gyms. This 17-33% retention advantage isn't accidental. It's structural.
The pricing vs value paradox
The data reveals a counterintuitive pattern:
Monthly membership costs:
Budget gyms: $10-30
Traditional mid-tier: $35-70
Boutique studios: $90-150
Premium wellness clubs: $150-600+
Traditional logic suggests higher prices drive churn. The opposite is happening. Premium and boutique facilities charging 3-20x more than budget gyms maintain significantly better retention.
Why? Because price signals value perception, and these facilities deliver infrastructure that justifies the premium.
The 4 structural advantages
1. Community as core product, not amenity
Traditional gyms treat community as a marketing concept.
Boutique and wellness clubs build it into their operational model:
Orangetheory's heart rate monitoring creates visible, competitive community engagement during every class
F45's team-based circuit training eliminates the "working out alone" problem
Life Time's family programming, co-working spaces, and social events position the facility as a lifestyle hub, not just a workout location
The Hapana data shows 52% of members cite community as crucial to their experience. Boutique studios don't market community, they architect it through small class sizes, consistent cohorts, and instructor-member relationships.
2. Specialization over scale
Traditional gyms compete on equipment breadth. Premium and boutique facilities compete on programming depth:
Barry's Bootcamp's signature red-lit HIIT/strength format
SoulCycle's instructor-led cycling with choreographed movements
Solidcore's slow-motion strength training methodology
Life Time's MIORA Performance + Longevity program integrating diagnostics, recovery devices, and physician access
Specialization creates two retention advantages:
outcome clarity: Members know exactly what result they're pursuing
switching costs: Specialized programming is harder to replicate at home or other gyms
The Hapana report shows 35% of members request personalized plans. Boutique studios start with personalization: it's the product, not an add-on.
3. Technology as member experience, not operations
Traditional gyms use technology for billing and scheduling. Boutique and wellness clubs use it for engagement:
Orangetheory's performance tracking and leaderboard gamification
Whoop partnership with F45 for continuous biometric monitoring
Equinox's robust mobile app for class booking, progress tracking, and content delivery
Life Time's integration of diagnostics, wearables, and coaching systems
The distinction:
traditional gyms deploy technology to reduce staff costs.
premium facilities deploy it to increase member value perception.
4. Wellness integration vs. fitness isolation
The fastest-growing segment is facilities that position fitness as one component of holistic health:
Equinox's partnerships with nutritionists, sleep coaches, and mental health professionals
Life Time's addition of hormone therapy, weight-loss programs, and recovery services
Love.Life's $40,000+ memberships including physician access, diagnostics, and coordinated care
Barry's expansion into nutrition and recovery modalities
Market data shows wellness integration increases retention by 20%. When facilities provide nutrition guidance, mental health support, and recovery services, members perceive the membership as health infrastructure rather than discretionary fitness spending.
Market Evidence
The market is validating this approach:
Boutique fitness market growing at 6.4% CAGR (2025-2035), reaching $25B by 2035
25% of Americans now prefer boutique studios
Boutique studio memberships up 30% over past five years
48% of Millennials opt for boutique or premium gyms over budget options
Meanwhile, traditional mid-tier gyms face the squeeze: too expensive to compete with Planet Fitness, too generic to compete with specialized studios, too transactional to compete with wellness clubs.
The Retention Formula
Boutique and wellness clubs solve the 23% churn problem by inverting the traditional gym's assumptions:
Traditional gym model:
Assume: Members want cheap access to equipment
Reality: 38% request discounts (low perceived value)
Result: 23-28% annual churn
Boutique/wellness model:
Assume: Members want outcomes, community, and guidance
Reality: 34% willing to pay more for better amenities
Result: 70-80% retention (20-30% better)
The difference isn't marketing. It's architecture. Premium and boutique facilities build retention infrastructure from day one: small cohorts, specialized programming, technology-enhanced tracking, staff trained as coaches rather than attendants, and wellness integration that positions the facility as essential rather than optional.
Data Sources:
IHRSA 2024-2025 Global Health & Fitness Reports
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