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Hard-hit health and fitness clubs ask Congress for relief, protection, and stimulus.
BOSTON, MA—June 23, 2020—Forced into near-total shut down since the beginning of the COVID-19 pandemic, the International Health, Racquet & Sportsclub Association (IHRSA), is calling on the Senate to help America’s health and fitness industry survive so it can continue to employ its nearly three million workers.
As an industry uniquely impacted by the coronavirus, health and fitness clubs are in desperate need of relief to get back on their feet, pay their employees and continue to provide safe, secure, proven places for millions of Americans to achieve their health and fitness goals.
Health and Fitness Clubs are uniquely impacted by the crisis because:
- The nation’s 40,000 to 50,000 health and fitness clubs, which were flourishing before the shutdown, were one of the first businesses mandated to close.
- During the shutdown, while other small businesses were able to pivot and sell online or do take-out orders, health clubs had no real opportunities to earn revenue. IHRSA estimates that the U.S. health club industry has lost $5.6 billion from mid-March through June 1, and will continue to lose $350 million per week through 2020.
- Now that states have begun to reopen for business, clubs are among the last businesses allowed to open in many states, finding themselves in later opening phases even though the President included gyms in Phase 1.
- Even when open and for the foreseeable future, clubs will be hampered by reduced income from reduced capacity safety requirements and membership cancellations. Clubs that have opened are opening at 25-50% capacity, while still having 100% of their expenses.
IHRSA, the trade association for the health club industry, has been sounding the alarm on the dire consequences the industry is facing since the early days of the pandemic, even before Congress took up the CARES Act.
With near-total closures and no real opportunities to earn revenues since mid-March, fitness clubs and gyms across the country require financial relief.
“I have taken on the responsibility to continue to pay my employees for the time being, but those funds, without income from the business, are finite. We need to support our workers, but for our workers to have jobs in the future, we need to make sure that the economy of the health and wellness industry can rebound,” said Kevin Johnson, CEO and owner of Team85 Fitness & Wellness in Bordentown, NJ [which as of June 12 has yet to announce an opening date for clubs.] “We need the support of our government to protect our employees, and the actions put in place thus far are not enough to continue this assistance. Without a concerted effort, we will see this industry begin to crumble. Even if the larger facilities can remain open, the small business will not be able to sustain paying the employees without support.”
When Congress passed the CARES Act, a large and important segment of the fitness industry, operators with more than 500 employees, was left out. Even those who were able to access some emergency funding found that aid insufficient to keep their businesses open, as many clubs go into their third month of closure. And those eligible for the SBA’s Payroll Protection Plan (PPP) were not able to take advantage of the loans with their businesses remaining closed, many with no opening date in sight.
Without much-needed relief, the health and fitness industry, which represents a vital portion of the U.S. economy and the nation’s health and well-being, faces dire consequences:
- IHRSA estimates that without relief, nearly one quarter to one half of the country’s health clubs, gyms and fitness studios will close
- Club companies have already laid off up to 90% of their staff, estimated at over 800,000 full-time equivalent employees (FTEs), and as many as 3 million part-time and full-time employees in total
- Before the lockdowns, the industry was serving over 72 million Americans
“If we have learned anything from this experience, it is that those who are healthy have a better chance of being able to survive this type of virus, and it is imperative that the fitness industry be at the forefront of all government entities to improve the health and wellbeing of all their constituents now and in the future,” said Johnson. “Without Congressional support, one of the most important industries in this world will be withered away to nothing.”
Health clubs serve as an integral part of the solution to returning our citizens to a state of good health, a strengthened immune system, better mental health and prosperity. They are deeply ingrained in their communities, serving as community centers in many places, and providing daycare options, swimming lessons, educational classes, and other services that would be lost if they close.
For America’s gyms, studios, health and fitness clubs, and the companies that supply them to survive, and continue to maintain the physical and emotional health of communities across the country, Congress must include relief that can help fitness businesses in any of its upcoming legislative attempts to address COVID-19 related issues.
In its lobbying efforts to save the U.S. health and fitness industry, IHRSA is asking for three categories of relief from Congress: relief, protection, and stimulus.
- Relief in the form of grants or forgivable loans to save clubs from permanent closure and keep club staff on the payroll.
- Protection by ensuring business interruption insurance covers for future pandemics and government closures and sufficient liability protection from aggressive lawyers.
- Stimulus in the form of tax incentives to revitalize the industry, such as passing PHIT (H.R.1679/S.680) which would allow HSA and FSA dollars to pay for fitness, youth sports and healthy living. This would also make American’s dollars go further during these uncertain times making it easier to invest in their and America’s health.
“Without immediate assistance, as many as a quarter of America’s health and fitness clubs will close by the end of 2020. This would be catastrophic to these small business owners, their hundreds of thousands of employees, and the millions of people who use them,” said Joe Moore, IHRSA president and CEO. “In a time where increased physical activity is critical to the country’s physical and mental health, the closure of these clubs would be devastating to communities across the country and could leave many without access to any health and fitness options at a time when they need them the most.”
Note: This press release was sent by IHRSA to hundreds of national and political media contacts to highlight the fitness industry's plight. A version of this release was sent to US fitness industry trade media and can be seen here: ihrsa-launches-campaign-for-relief-and-stimulus-from-congress/.