Gyms traditionally work on the membership model, requiring monthly or annual commitments from people who work or live near their facilities. But subscription services are taking a different approach to the space, expanding the reach of gyms beyond just locals. Business travelers, for instance, might be near a fitness facility for only days or weeks at a time and want to get in a workout between meetings. And there is no shortage of these road warriors, with one estimate pegging the number of business trips taken last year at nearly 462 million. “It’s a pretty big market,” Localfit Founder Rob Gilliam told PYMNTS.com in an interview, referring to the people who want to exercise when they are away from home.
To serve this market, Localfit is a travel membership program that gives travelers access to gyms and fitness studios. Instead of providing travelers with passes to each individual club in its program, Localfit sends customers a prepaid debit card when they sign up. There aren’t any funds loaded on the card at first, but after a customer finds a facility through the app, the company loads the money needed to visit a particular club. Once customers arrive, they present the prepaid debit card for entry and merchants process it like any other debit card.
“We call it our ‘all access card,’” Gilliam said.
The Business Model
Gilliam didn’t always use a debit card as a fitness pass for his service. At first, his company had a software program that it tried to integrate with the clubs on its platform, but there was an issue with compatibility, as different clubs used different management systems. As a result, Gilliam found it impossible to create application programming interfaces (APIs) to connect to every system. By using the debit cards as fitness passes, Gilliam didn’t need to integrate his software into every club.
To ensure that customers don’t use the funds to, say, fill up at the gas station, Localfit uses merchant categories to restrict purchases. Gilliam pointed out that MoviePass applied a similar concept to movie tickets, but MoviePass sells a movie theatre’s main offering, the movie ticket. By contrast, Gilliam said, gyms’ main line of business isn’t selling day passes to their facilities.
Localfit lets members access more than 5,000 clubs and about 800 studios for classes. “They’re the larger health clubs that have all the plush amenities,” Gilliam said, providing basketball courts and pools as examples. And while customers can visit a fitness facility every 12 hours, Localfit’s service does have a geographical restriction: Members can only use facilities that are more than 35 miles away from their homes, a limitation that makes the service affordable.
Localfit offers three-month, six-month and annual plans to members. Plan options are an important feature for top subscription services: Of the top 20 performers in the PYMNTS Subscription Commerce Conversion Index, 100 percent offered plan options. By contrast, only 20 percent of the bottom 20 firms in the index have implemented the feature.
The Market
Localfit is not the only company providing travelers with access to fitness facilities on the go: Sanctifly’s app aggregates healthy alternatives for travelers, such as hotel gyms, pools and spas. Using the app, travelers can find and use those facilities without having to spend money on an overnight stay. In comparison to Localfit, Sanctifly has a bit of a different focus, as it is geared toward travelers flying around the world. The app’s partners include chain hotels along with some smaller boutique hotels and spas at around 100 airports.
Beyond the world of travel, one of the largest players in the fitness subscription space is arguably ClassPass. The fitness membership service, which announced in July that it had raised $85 million in venture funding, gives its subscribers access to a certain number of classes per month that they can book at various studios close to home. But members don’t have to visit a studio in person: In December, ClassPass announced a digital fitness experience called ClassPass Live, showing that fitness subscriptions can span real and digital worlds.
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