(Post updated to reflect ClassPass price increases in Chicago announced May 12)
This week ClassPass members in Boston and New York City let out a collective yelp. The price for the memberships that gained them access to exclusive and expensive fitness studios in their home cities increased by a hefty sum.
In New York City, prices jumped from $125 to $190 for current members and $200 for new members, according to the Huffington Post. Current members in Boston will pay $150, up from $125, while new members will pay $180. Chicago, my ClassPass metro area, will go up to $175, from $119 June 1, with an option to opt-in to what they’re calling the “Core” membership, which allows users to access 10 studio classes each month for $115.
Before we decide whether you should jump ship, let’s talk about why this is happening.
1. Operating a studio is expensive.
If you’ve ever said to yourself, “I’d really love to open a gym,” pay attention. Operating your favorite studio or gym isn’t easy and it isn’t always profitable. For the purposes of this article, let’s use the city of Chicago as an example.
If you were to open a gym in River North (congratulations, by the way, River North is lovely) your average cost per square foot for rent is somewhere around $30/year. Assume you need an average of 10 square feet per human for a safe workout space – a number that can go all the way up to 50 square feet per human for conditioning classes, according to ENRGi Fitness owner Amy Lee. If you want to fit 30 people in your studio at any given time, you need 300 square feet, minimum, and potentially as much as 1,500 square feet. That’s $18,000 each year, just on rent, or about $1,500 each month on the low end.
Add the cost of lobby staff – let’s say $15 each hour – and your teaching staff – around $50ish an hour. If you operate seven classes each day, three in the morning, one at lunch and three in the evening, you’re paying $455 in labor. That’s not even factoring in what you’re paying to a cleaning crew.
In a 31-day month, a gym in River North costs $17,105 to operate, before factoring in anything besides rent and labor. That’s before electricity, Internet, marketing, insurance, paying the bookkeeper, equipment and taxes.
2. Gyms based their business models on their membership prices.
So let’s say you’re operating your gym in River North Chicago and you built a business model to allow you to make a profit at an average cost per class of $15-$20. Remember, gyms operate on averages because in the current studio fitness model, there are a variety of ways to pay – from memberships to class packs to drop-in classes. Your classes cost $30 for a drop-in, $25 if you buy a pack of 10 classes and $20 per class if you buy a membership and come to 12 classes each month.
The gym is probably running marketing that features reduced-cost classes or even a free class and some members may come every day. Memberships are the lowest cost per class, but the best for the gym because it’s guaranteed repeating revenue.
You’ve got a good thing going. An average of $15-$20 per person per class and let’s say your average class size is 15 people. With seven classes a day, you’re at $2,100-$2,800 per day. That’s $48,825- $65,100 each month again, before electricity, Internet, marketing, insurance, paying the bookkeeper, equipment and taxes. You pay the rent and your other expenses and you probably actually have about $16,720- $50,100 left after all of that. You’re feeling pretty good about yourself. You’ve got money to reinvest in your business.
But let’s say that your average revenue went down to $10 per person per class for any reason. You’re at $1,050 per day $32,550 per month. Leaving your revenue – before electricity, Internet, marketing, insurance, paying the bookkeeper, equipment and taxes – at $15,445 after paying your rent and for people. You probably actually have about $445 left after paying all of those keeping-the-lights-on expenses. Is that enough to pay yourself, your manager and your investors back? Nope.
3. ClassPass needs to keep two sets of people happy.
ClassPass has two audiences and they act as an intermediary between those two audiences. This is an incredibly difficult business model to start – let’s take a second to give ClassPass a round of applause.
They have their members and they have their studios. To sustain this model, both need to be happy. Members need to see the value in the service and studios need to continue to operate profitably. If either audience is unhappy or if the ecosystem goes out of whack the entire thing can fall apart. And guys, we need studio fitness to work because I CANNOT go back to a big box gym.
So how can I tell if ClassPass is valuable for me?
It all depends on how much you use ClassPass and what your goals are. For the sake of this, let’s assume class prices are $25 per class because you buy you classes in packs and let’s compare the membership price to an average larger gym – low end is $40 and high end is $200 per month in Chicago. Let’s meet in the middle and call it $150 if you want to get closer to your ClassPass-quality classes. We’ll compare two ClassPass prices, the current price in Chicago $119 and the future price, $175 each month.
You’re a super user and you like to jump around: Stay
If you’re using your ClassPass membership 20 times each month, this is a no-brainer. It would cost you $500, on average, to take a comparable number of classes with your class packs and you would likely go stir-crazy at one gym. This is still a savings of $325 in Chicago and $300 in New York at the price of $175 and $200, respectively.
You’re somewhere in the middle: You have options.
If you’re taking around 10 classes each month, two or three each week, you’re still saving money with ClassPass. A comparable number of classes would cost you $250 each month. But the key question is this: What are you doing on your remaining days of the week? Is that activity costing you money? If you have an additional gym membership that’s costing you $150, you could be spending $325 in Chicago and $350 in New York City. You could consider three solutions – two of them are cost-saving:
- Consolidate to just ClassPass for $175 in Chicago and $200 in New York City.
- Consolidate to just your gym membership for the rate you locked in at: $150. This is a savings of $25 in Chicago and $50 in New York City.
- Continue with your gym membership and reduce the amount of classes you’re taking with ClassPass to just 10 and reap the benefits of the $115 “Core” membership: At $265 in Chicago, this is an additional expense of $146 from your soon-to-expire $119 ClassPass price.
You travel for work and use ClassPass on the road: Stay
For the most part, larger gyms are regional, but ClassPass has a presence in most major metro areas. If you’re traveling for work and enjoy the benefits of changing your metro area to take classes across the country, you could be spending $125 on drop-ins if you’re able to make it to five classes while you’re on the road each month.
- You can continue with ClassPass and continue to enjoy that extended fitness reach for $175 in Chicago and $200 in New York City.
- You can downgrade to ClassPass Core just to use while you’re traveling and join a gym at home for a total of $265, which is $10 less than what you’d pay for a gym membership and drop-ins ($275), but it’s $146 more than current ClassPass prices.
You’re using ClassPass less than 10 times each month: Stop paying full price immediately.
In Chicago, you won’t have to do anything. You’ll automatically downgrade to the Core membership, which will cost you $115, getting you access to 10 studio classes each month..
But remember that the average recommended activity level is more than two 60-minute classes each week – it’s two hours and 30 minutes of cardio and two or more days each week of strength training for the whole body.
So if you want to increase your activity level, you can do a few things.
- Keep your base ClassPass Core and augment with complimentary and bodyweight workouts on your remaining days of the week. aSweatLife keeps a list of free workouts in Chicago here and you can use any of our bodyweight workouts. $115. This is a savings of $60 from your $175 ClassPass membership.
- Join a gym and challenge yourself to get there four days a week and take an outdoor run one day each week. $150. This is an additional investment of $35 from to Core ClassPass membership and a savings of $25 from the full ClassPass membership.
- Quit everything and train for free. If you’re able to keep yourself accountable or to find a group that can, you can go totally free. This is a challenge for most. Do a real gut check before you quit everything. aSweatLife keeps a list of free workouts here and you can use any of our bodyweight workouts. $0. a savings of $175 from your full ClassPass membership.
What you do with your ClassPass membership is a personal choice based on your own use. I’m going to stick with Core because it aligns with my usage of 10 classes each month, which makes financial and fitness wanderlust sense for me.
Don’t hate the player, hate the game.
