Millennials spending big on trendy gyms

Big-box gyms not cutting it anymore

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Carla Zuniga is punching a heavy bag as if she were preparing for a title fight, although she’s a 35-year-old hair stylist doing her regular workout.

Zuniga isn’t sweating at some low-fee, big-box fitness chain. Prevail Boxing is a 1,500-square-foot studio in Los Angeles that charges $250 for 10 classes.

“I think people in my generation are more willing to invest in what challenges them and makes them healthy,” said Zuniga, who grew bored with cheaper, traditional gyms.

Artisanal avocado toast may be getting the blame for millennials’ inability to afford a house. But those expenses pale in comparison with what a growing segment is willing to spend on fitness, abandoning $30-a-month gyms for trendy studios where classes for cycling, boot camp or yoga can run $30 a session.

Boutique fitness studios have become the only growth segment in an otherwise stagnant gym industry, according to separate research reports from the Association of Fitness Studios, fitness technology firm Netpulse and financial services firm Stephens.

“When it comes to the younger generation, consumer items like car and home purchases are at an all-time low,” said Greg Skloot, vice president for growth at Netpulse, a San Francisco company that creates mobile apps for health clubs.

Spurred by popular start-up ClassPass and other online middlemen, young fitness addicts say their days of mindless treadmill workouts tied to just one gym are over. With a limited number of spots per class and advance reservations generally required, there’s a mad rush to get into the hottest classes.

At Prevail Boxing, for example, cancellations with less than eight hours’ notice cost $10 on top of the price of the class. Fail to show and there’s a $20 fee. Arrive less than five minutes early and you stand a chance of losing your class spot to someone else.

Bart Kwan, 33, has 472,000 Instagram followers and 674,000 YouTube subscribers. Kwan regularly posts comedy and power-lifting workout videos that garner more than 1 million views each. Kwan’s “Justkiddingnews” YouTube channel has nearly 1.7 million subscribers.

Kwan, a former athlete who also practiced mixed martial arts, wasn’t happy at traditional gyms. So he and his wife, Geo, opened Barbell Brigade near downtown Los Angeles in 2013. It’s not as expensive as some boutique gyms, with a day pass costing $20 and the monthly fee for regulars running $100.

Kwan said he wanted to re-create the atmosphere he once found in a mixed martial arts training facility.

“We were paying top dollar to go there,” Kwan said, “but we considered that place our temple.”

Boutique fitness studios mix small-group camaraderie and dojo-like commitment with coconut water and their own branded merchandise.

Experts say the social aspect partially explains the willingness to pay so much more than at a traditional gym. Millennials may be ready to forgo an alternative social activity — going out for dinner and drinking and dancing, for example — where the cost can easily run $100 or more.

At Cycle House, which specializes in demanding cycling classes, it’s not unusual to see members lingering outside in the courtyard and at the adjacent coffee shop. But the difficulty of the classes is the real draw, said Peter Marcos, a customer who liked Cycle House so much he quit his tech job to work there.

“I was sold after my first ride here,” Marcos said. “I came out completely refreshed and empowered.”

That kind of challenge draws Los Angeles actress Aisha Kabia, who said she was able to afford a Cycle House class only by using ClassPass, a membership service that offers discounts on classes at multiple studios.

“It’s exposed me to classes that I probably would not have been able to go to because of finances. A meditation studio, hot yoga,” said Kabia.

As for old-school, full-service gyms, they’re borrowing pages from the boutique studios’ playbook.

The Gold’s Gym chain, for example, recently introduced what it calls Gold’s Studio in 40 of its nearly 740 locations and plans to invest heavily in spreading the concept, which “allows members to experience coach-led, community-driven and individually adapted boutique-style classes.”

The Association of Fitness Studios noted such moves in a recent study.

“Watch some of the big box boys create studio-in-the-club environments, while others decide to open their own studios, either as brand extensions or completely new business models,” the trade group concluded in its study.