‘Just people trying to survive’: Operating a fitness business in Santa Cruz has only gotten trickier
Small gyms are the name of the game in chain-averse Santa Cruz, but local owners say that even with their close-knit communities, there’s no strong-arming the area’s high cost of living — and that was before the COVID-19 pandemic added to the degree of difficulty.
Camile Periat has enjoyed traveling across the country, searching for good gyms to test out as a professionally ranked bodybuilder.
But, as co-owner of Santa Cruz Power Fitness, Periat notes it takes financial strength to stay afloat in the local market — largely because of the operating costs and the cost of rent.
“A lot of [the Bay Area gyms] are large chains, and that’s their business model — they know that the average gymgoer goes maybe a few times a month, if that,” she says. “It’s cheaper for these large, large gyms to make more profit by having a low membership rate because members won’t use it and won’t notice it on their bank statement.”
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But for owners like Periat — who took over ownership of SCPF in 2018, originally founded in 1992 — that model is just not in the cards. With Santa Cruz’s increasing cost of living — with July figures showing a 15% rise in rent from the previous year — small businesses are feeling the brunt of it in their business models.
Lots of Santa Cruzans are active, but to get a full-gym experience, they might have to churn out five times as much in membership fees compared to similar iron-pumping experiences over the hill. It’s a function, business owners say, of rent and the overall cost of living, though the local distaste for chains also plays a part. Many said they could survive the COVID-19 pandemic because of their close-knit communities — but some are unsure of what the future holds.
“Santa Cruz has always been a very expensive place to live,” Periat says. “For a small business to survive, we charge competitive rates to competitors in the area — we’re still under what most of our competitors charge … but we are going to be a little more expensive than [chain gyms].”
Just over the hill in San Jose, you can find options ranging from the more affordable model — Planet Fitness, Fitness 19, Crunch Fitness — to the elite — Villa Sport — with prices as low as $10 a month. But here in Santa Cruz, the affordable options are not as prevalent and most national chains have not put down roots.
The gyms and studios in the area — Toadal Fitness, multiple CrossFit franchises, and Santa Cruz Power Fitness, among others — are higher end and provide more of that community feel, yes — but with costs that can range anywhere from $50 to upward of $400 per month.
Carina Reid has noticed those high overhead costs as she’s prepared to open her own studio, Fuel PHitness. Reid, who began as an instructor with locally owned Toadal Fitness in 2012, grew her following to the point where she wanted to open her own studio — but it has led to many challenges, specifically with hiring.
“Instructors don’t get paid a lot — some do, but you have to get to a certain point to get paid that much,” she says.
As studios furloughed instructors and instructors found new working models through donation-based virtual classes, fewer decided to come back when the studios reopened, she says.
As she prepares to open next month, Reid says she is continuing to evaluate how much she can and should pay her instructors without passing those higher charges to the members.
“There are people going back into studios after COVID-19 and not getting paid anywhere near what they were getting paid (at home) — the owners can’t, or aren’t willing to, pay,” she says. “You want to treat your instructors with love and respect, and let them know you care.”
Ryan DeWitt opened his CrossFit Up in 2013 with wife Sonja DeWitt, combining the gym with their longstanding physical therapy business. They charge $159 for unlimited classes per month, but reduced that fee during the pandemic for some clients based on their ability to pay.
“Some of our members stopped working out but asked us to keep charging their membership or keep their membership live, because they wanted to make sure we were here when everything reopened,” Ryan DeWitt says. “It definitely changed what we thought the model could look like.”
However, DeWitt says less established gyms might struggle to retain new members, as gymgoers aren’t rushing to sign up for memberships with the continued questions surrounding the Delta variant and potential closures.
“We just had to operate very lean for a while,” he says. “I’m glad I didn’t open a gym right before this, because we had a strong community to get us through.”
At the same time, Reid says it’s been a learning experience to evaluate pricing structures.
“Through COVID-19, everything has gone up in price, and in two weeks, it will continue to go up in price,” she says. “But I think that a lot of these local studios — for the most part, it’s just people trying to survive. Getting by and trying to make a little profit, but also to give people connection, community and support through movement.”
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For DeWitt, he believes the future of many gyms and studios across Santa Cruz County will rely heavily on the community. Membership structures will likely change for CrossFit Up, he says, as “doing the same thing we’ve always done won’t push the needle.”
“We’re all still here, which means I hope we’re all making it in some capacity — but I don’t feel like any of us have this natural buffer or are all killing it in the gym game.”