Boutique gyms and the rising trend of the pay as you go (PAYG) model is fantastic for the hectic city lifestyle. Today’s gym users can test-drive gyms and classes like they do their morning smoothies. But is it a race to the bottom for the gym owner? Robin Karn, of Harlands Group, discusses the pros and cons of the PAYG model, and suggests how both boutique gym owners and traditional subscription gyms can prosper in the future by potentially working together.

Boutique gyms are springing up in most major UK cities, offering niche workouts (often a single type of class) and charging as much as £30 per session. Like all PAYG models, it definitely appeals to the segment of the market that doesn’t like to be tied down to a contract. The notion of being able to try a multitude of different classes until finding one that works, and the ability to be a ‘sweat nomad’ is also appealing. Location, time and activity can be chosen to suit your mood and commute.

However, just like the PAYG versus contract decision in other sectors, there are pros and cons for the customer. Signing up for a contract usually carries a financial advantage that’s cheaper in the long run (especially against £30 per class). Plus, it often carries additional benefits and deals in addition to enjoying ‘all you can eat’ work outs - at The Gym Group you can workout every day for only £14.99 per month.

The Guardian reported that 1 in 7 adults in the UK are members of a gym, an industry worth a staggering £4.9bn. An estimated 8m gym membership direct debits are processed every month in the UK alone, (25% of which are managed by Harlands, more than any other system or operator). You might think that without the use of formal contracts or direct debit payments boutique gyms would suffer from a lack of loyalty and sense of membership. In actuality, members of boutique studios enjoy the same strong sense of community and pride as belonging to a luxury gym. For example, Framers (members of Frame - one of the first boutique studios to thrive in London) have a deep affinity with the gym’s brand and the prestige of surviving its gruelling, expert-level sessions.

Disruption in any industry is inevitable and should be welcomed. Whilst boutique gyms will absolutely find a customer base, especially in cities where a transient population numbers in the millions, it isn’t going to kill off the traditional gym membership or recurring contracts. Airbnb is fantastic, and I’ve used it many times for short city breaks. However, I’m not going to boycott hotels and spas when the occasion is more appropriate. Choice is only ever a good thing for the consumer. And like fine cuisine, there is genuinely something for everyone. Boutique gyms have become the elite equivalent of a hipster coffee shop, or the cereal restaurant in Shoreditch charging £5 for a bowl of Lucky Charms. In the US, Planet Fitness famously offers ‘judgement free zones’ for patrons who feel intimidated in the weights room and even hosts a pizza night in the gym.

I believe that just like the airline industry, there is absolutely room for both traditional, budget operators and premium, boutique offerings. Gyms and leisure centres that can’t differentiate between these markets, and sit somewhere in the middle, will struggle to survive in the long run.

I also feel that eventually, boutique gyms will want to nurture the (commercial) loyalty and recurring income enjoyed by traditional subscription gyms. Of course, they won’t all be tying customers into 12-month contracts very often. But should one set-up a direct debit plan, they will enjoy a reduced fee (perhaps £25 per session rather than £30) and queue hopping privileges for the most popular classes, V1BE in Manchester are already doing this successfully and more will follow. It will become the equivalent of being a casual football fan versus a season ticket holder. Are you a genuine Framer, or a fair-weather Framer? Where’s your loyalty card?

Even in large cities, where the stream of new joiners feels endless and loyalty and retention is secondary to acquisition, boutique gyms will eventually come around to the concept of recurring payments. The fitness industry only needs to look at dominant PAYG/contract sectors such as Telco for the blueprint. In the mobile phone world, PAYG is considered a gateway product to the far more lucrative contract where the client is hooked-in and the barriers to switch are high. Framers will shudder at the thought. It’s everything a boutique gym is NOT about. But there is an opportunity to still hold to the antidisestablishmentarian and revolutionary ethos of the brand AND make it profitable for the gym and advantageous to the customer.

If boutique gyms genuinely want to support choice and foster a sense of community, they may want to consider partnering with the more traditional gyms. You could find the perfect MMA studio with world-class Jiu Jitsu instructors, then want to switch your work-outs to a decent weight room with a jump in the steam room after your session. If your MMA studio partnered with the local leisure centre to give you this type of access, exclusively as a subscribed member, everyone wins.

Boutique gyms are fantastic for niche markets and are not the death of traditional gyms. There’s a massive opportunity to explore the benefits of recurring payments for gyms and gym-goers alike by continuing to deliver diversity and choice in the fitness industry.

Now I’m off for pizza night at Planet Fitness!