Friday, July 13, 2012

Fat-Only Gyms Mean Higher Prices for Fit People

From CBS Sacramento:

New Trend: Gyms Banning Slim Clients To Foster Comfort For Overweight Patrons

A new fitness trend appears to be sweeping the nation – one that expressly excludes those on the more slender side of the scale.

Multiple reports have surfaced recently about gyms that cater exclusively to zaftig clients looking to lose weight in a place free of potential judgment from other, smaller patrons.

Though some all-inclusive gyms have attempted in the past to create a safe haven for anyone interested in exercising – for example, Planet Fitness, a national chain of gyms with a “judgment-free” motto and mentality – some creators of obese-only gyms feel it’s not enough.

Um . . . yeah, this one isn’t that hard to figure out.  From the perspective of the fitness center’s business model, the ideal client is one who buys an expensive membership . . . and then seldom uses it, allowing the gym to carry a larger membership relative to its capacity.  These fat-people-only gyms are calculating, probably correctly, that such clients are overrepresented among the obese.

Although my employer has always operated exceptional fitness facilities, this development kind of sucks for people like me who unthinkingly rely on a lazy fitness center subscription base to keep the price down.  What will a gym membership cost when everybody who buys one actually shows up 3+ times a week?


Anonymous said...

it will cost the same. The price is already set at what the market will bear, not what it costs to provide. There are plenty of gym alternatives and a gym memberfship is itself a luxury since for a few hundred dollars, you can get the equipment you like in your own home. So that is the upper limit of the market. if they could have raised prices, they would have done so already no matter how many fat people signed up.

Elusive Wapiti said...

"What will a gym membership cost when everybody who buys one actually shows up 3+ times a week?"

It may actually go down in this hypothetical. Wall to wall people in a gym may drive customers away toward other facilities / activities...perhaps even to their own home, as PH surmises.

Dr. Φ said...

Well, only a monopolist can charge what the market will bear. In a competitive market, producers can only charge their long run cost, plus profit equal to the next best investment of like risk.

Which is my point: if one set of gyms siphon off the low cost customers, the remaining gyms must raise prices to service the remaining high cost customers.

Justin said...

Who wants to work out surrounded by a bunch of fat people??? Gross! That is a losing business concept if I've ever heard one.

Dr. Φ said...

Well, presumably other fat people won't object. But the point is to attract dues paying members who seldom actually show up, allowing the gym to carry a much larger membership than it would otherwise.