Consumer confidence rocked as Singapore fitness industry grapples with sudden spate of gym closures

SINGAPORE — It has been four years since the COVID-19 pandemic broke out, but many gym owners are still feeling the effects from the global health crisis and struggling to recover.

Rising rent, manpower regulations, increased competition from foreign players entering the market, people going back to office, consumers choosing to spend on "revenge" travel instead – these are just some of the reasons why many gyms have yet to return to their pre-pandemic successes.

To make things worse, there have been a spate of abrupt gym closures with no accountability and transparency to the members, and consumer confidence has been affected with many reluctant to commit to packages for fear of the gyms shutting down.

“I feel poorly for both the businesses that have had to close, and the customers affected by these closures,” said Grace Huang, co-founder of Neue Fit, a martial arts fitness studio at Kallang Wave Mall.

“This has definitely affected sales because people are committing to smaller and shorter memberships. I have owned gyms for 11 years now, and while I understand that businesses need to stay flexible and move with the times, fitness businesses also need cashflow and certainty of cashflow in order to survive.”

Lack of accountability to members

Over the last two years, several popular gyms such as UFC Gym, Ritual Gym and Haus Athletics have shut without warning. Members were all blindsided when they received news that these gyms had abruptly shuttered.

“I received an email with the subject ‘Ritual Gym Ceases Operations’ and it stated that all their outlets have ceased operations and the company has been placed in provisional liquidation,” said Jeremy Tang, 35, a member of HIIT gym Ritual for two years.

“I felt really disappointed because they were still taking in renewals and new subscriptions the week before. It seems like the owners were trying to get as much money from the public before dissolving the company."

Tang had about 32 sessions (worth S$700) left in his membership and did not get any money back. “The very least they could have done was to give a heads up and a few months to let us finish our sessions. I probably will never sign up for a gym membership again.”

Tang’s friend Ni Jia Ling, who was a Ritual member from 2017 to 2019 and had rejoined them in December 2023, was also left with 44 unused sessions (worth S$1,018). The 35-year-old banker said that, in the future, she will opt for monthly payment of gym membership fees instead of a one-time annual payment.

Educator Ahmad Musta’ain, 37, suffered the same fate with Haus Athletics. The gym sent out an email to its members about its closure with two days’ notice, and before anyone could fully digest the news, the members received another email about the liquidation of the company.

“It was a huge shock when it was announced days before its closure that it was not just closing, the company was getting liquidated," Ahmad said. "Their employees only found out about the closure, not about the liquidation, one hour before it was announced to members. When we received an email from the company handling the liquidation of Haus Athletics, we knew there's no way we're getting our money back.”

Although Ahmad had only four gym sessions left, it has made him “extra wary of spending money on packages”.

Another Haus member, a civil servant who prefers to stay anonymous, said the disappointment among the members was not so much on the fitness studio's closure, but the fact that Haus was so dishonest in its business conduct, and that there was zero accountability.

“If I’m not wrong, voluntary liquidation started over a month before the actual winding up, so Haus had plenty of time to come clean and explain to its clients. Instead, it chose to lie," the member said.

“I am extremely wary and now only consider gyms where payment is a weekly or monthly basis."

More flexible terms may not be long-term solution

Such cautiousness from gym users is hurting other gym owners still in the business. Many fitness studios have responded by creating more flexible membership terms, such as a pay-as-you-go, month-by-month membership with no lock-in period, or memberships that can be cancelled anytime.

“While that is great for the consumers, that isn't necessarily great for the business, or the fitness landscape in general," Huang said. "As a business, you can't just go month to month and hope for the best. What if the gym does not do well for consecutive months? That's when businesses have to shut abruptly."

Fire City owner Samuel Lim, who has run his functional training gym since 2011, agrees, adding that gyms who have survived the pandemic are still suffering from its after-effects. Shorter-term gym packages will hit these gyms' revenue and cashflow, making it even harder for them to maintain the gyms.

“In addition, we lose the sense of community because we have to constantly work with different groups of people and it becomes challenging to track their progress," Lim added. "Committing to a longer-term package will mean loyalty to the gym and the community, allowing us to invest proper time and energy into their wellbeing.”

To restore consumer confidence, Huang and Lim, along with other gym owners, are doubling down on delivering quality to their members and looking for other ways to help the business.

“The gym industry is definitely more challenging now but we are thankful to have a stable pool of loyal clients aged 13 to 84 who have been with us since the beginning and many celebrity clients like Christopher Lee, Hazelle Teo and Royce Lee who really value fitness as a lifestyle and help to promote it to their followers,” said Lucas Lim, founder of personal training gym FITLUC.

“Definitely, we see some hesitation initially to get longer-term packages, but after their first few sessions with our trainers, they see the difference our trainers make in terms of dedication to help them achieve their fitness goals faster in a more sustainable way, and they are confident to upgrade their packages."

Ultimately, most gym owners started their businesses out of passion and not with the intention to shut them down. But it would help all parties if everyone just upholds integrity, transparency and accountability even as they wind down their businesses.