Some 553 fitness centers shut down in the country last year, up 26.8% from 2023 to the highest annual figure since data collection began in 1990, with at least 36 more closures recorded so far this year.
Data from the Ministry of the Interior and Safety shows that gym closures are exceeding those seen during the COVID-19 pandemic when government restrictions led to temporary shutdowns and reduced operating hours. Around 430 and 402 gyms closed in 2020 and 2021, respectively.
Struggling gyms are looking for new owners, with many willing to forgo the business transfer fee that is usually charged to let buyers take over their existing customer base.
“Gyms that can’t even charge a transfer fee are in serious trouble,” the owner of one such facility told The Korea Herald, noting that most of these gyms struggle to survive beyond a couple of years. He also forecasted that the number of gym closures will continue to increase.
The fitness industry’s crisis came amid slumping consumption in the country. According to figures released by Statistics Korea on Monday, the retail sales index, a key measure of consumer spending, fell 2.2% year-on-year in 2024, the largest drop since 2003, amid high inflationary pressure.
This also marks the third year of decline, the longest streak recorded. The index stood at 101.6, the lowest since 2020, reflecting sales levels similar to the initial impact of Covid-19.
“Interest rates have been high for the past three years, and wages have not increased significantly,” ChosunBiz quoted a Ministry of Strategy and Finance official as saying.
“With disposable income falling in a situation where wages haven’t risen much, it likely influenced people to buy less.”
Many consumers in the country are tightening their belts amid rising cost of living, resulting in a drop in spending on face-to-face services.
“My monthly mortgage payments alone are 1.5 million won (US$1,036), and with the soaring cost of living, I’ve had to cut back on expenses,” Jang Ji-yong, a South Korean consumer, told an affiliate of the Korea JoongAng Daily.
Beyond economic challenges, independent gyms are also struggling with competition from large chains that attract customers with extremely low membership fees.
As more fitness centers shut down, cases of fraudulent closures, where gyms close without refunding customers after collecting large prepayments, are on the rise.
According to the Korea Consumer Agency, 10,746 damage relief applications related to gyms were filed from 2021 to the third quarter of last year, with the average damage amount at around 1.17 million won.
In one notable case last month, a well-known gym in Gyeonggi Province suddenly shut down, leaving many prepaid members who had spent millions of won on personal training sessions with no recourse other than to wait for investigations, as advised by the police.
Attorney Kwak Jun-ho from Law Firm Chung cautioned that some gyms deliberately launch aggressive discount promotions before closing down.
“If a gym suddenly offers an unreasonably low membership fee, it could be a red flag,” he said.
