Remote Work and Suburban Flight Puts Downtown Affiliates in Limbo
That’s how Keith Hurd, owner of CrossFit Wall Street, described the current situation in the financial district of New York City. He’s been in the area for 12 years and has seen it grow and change into a vibrant place of restaurants and families. However, since COVID-19 the district has become a ghost town, its nightlife is gone and many small businesses are shutting their doors permanently.
Behind the trend: It’s not just because people are afraid of going out — it’s because they are leaving entirely.
- An April 2020 Harris Poll revealed that “39% of urban dwellers” were considering leaving the city for less crowded places because of COVID-19.
- In late August, The New York Times reported a 44% increase in demand for homes in the suburbs around New York City; simultaneously, the number of properties sold in Manhattan dropped 56%.
- On the west coast, The Seattle Times reported since March that 126 downtown businesses have permanently closed over growing concern of the area’s economic recovery.
The big picture: Urban affiliates are facing a two-pronged attack to their membership numbers: 1). As businesses close or move to remote work, commuter CrossFitters are now working from home or out of work entirely, and 2). Members who do live in the city and/or are starting to leave for less densely populated areas.
- CrossFIt Wall Streets membership dropped 50% since pre-COVID levels by the time Hurd announced he’d reopen Tuesday, September 8.
- Members had moved out of the city, or had plans to do so, during the nearly six months he’d been closed.
- “The main reason they left was mostly people either lost their job, or their offices were just like, ‘Hey we will think about coming back January of 2021,’” explained Hurd.
- “With that said, a lot of them either moved to their families outside of the city, or a lot of them just packed up and left completely, left the state.”
In Chicago, IL, Justin Quandt, founder of The Foundry/Union Station CrossFit has witnessed the same trend.
- “Many people are moving out of the downtown area, in large part because they are now working from home and need/want more space,” he said.
- “In addition, our clients who live in the suburbs are not returning to an office anytime soon. As a result, some of these clients have sought options closer to home, even though they love our gym.”
Why it matters: As people leave densely populated cities, affiliates are forced to get creative to survive. For Quandt, it means he must be nimble and look for opportunities. That has meant continuing to offer Zoom classes three times a week even after reopening for in-person fitness, as well as creating custom at-home programming with frequent follow-ups via phone and text. Hurd has also gone the route of virtual service and personal connection. CrossFit Wall Street posts its workout daily on Instagram, gathers the members’ results and then posts that as well. Members who have yet to come back to the gym will get a phone call every two weeks.
- “That’s the biggest piece as an owner: keep in touch with everyone even if they don’t respond to you,” said Hurd. “It goes the extra mile when people hear your voice.”
A silver lining: Quandt says that those who have stayed with his gym are committed.
- “Although there are fewer total people, many have more flexibility in their schedule and a renewed interest in their fitness. We have partially offset the revenue loss by focusing on growing our personal training service.”
- “We’re also seeing very high attendance/compliance rates among new clients, which is helping to increase their retention.”
For other downtown affiliates: Hurd urged them to not give up. He suggests keeping your network alive, even in a time such as this. Find partnerships and participate in small business alliance groups. Get outside the box and stay relevant.
All in all, both owners noted owning a gym right now in a city is a lot like opening a brand new business. So, get in that mindset and move from there.
- “Be willing to rethink everything,” said Quandt. “In some ways, it’s like being a startup again.”
- Personal Training Revenue on the Rise.
- LIFEAID Survey Reveals Client Retention from COVID a Mixed Bag.
- New Gym Owners Offer a Perspective on Opening a Gym During a Pandemic.
- From Wait Lists to Record-Breaking Revenue: Gyms Rebound Since Reopening.