'The task is simply to survive': fitness industry groaning due to QR code introduction
Traffic in fitness clubs has decreased by 50-70%
Fitness industry workers are sounding the alarm: the introduction of mandatory QR codes in Tatarstan is a direct road to the bankruptcy of the industry. Only 30-35% of visitors remain in Tatarstan gyms now. Customers are actively freezing their memberships and are not buying new ones. But business in this industry is arranged according to the principle of a pyramid: there are new sales — there is money for current expenses. Already today, the management of fitness centres are recording a loss and is puzzling over how to pay utility bills and staff salaries. Read the details in the material of Realnoe Vremya.
“The influx of customers stops, and we fall into a financial hole”
A week after the adoption of the decree of the Government of Tatarstan on the introduction of mandatory QR codes for unvaccinated citizens, the entrance to fitness centres was decided — many rushed to freeze their memberships not to lose money. As a result, traffic has decreased by 50-70%, the sales of new membership cards has stopped. The industry is apprehensive about the second wave — when those who for some reason will not or cannot get vaccinated will begin to return their membership cards, demanding compensation.
Already, everyone, even large market participants, are recording losses, and those that are smaller are concerned about how to pay the utilities and salaries this month. In Tatarstan, more than 10,000 citizens are employed in the industry. Even in the smallest fitness centres, at least 50 people work together with cleaning, and in large ones — up to 400.
“The loss of traffic throughout the network is 65%, the loss of turnover from the usual daily indicators is 55%. But this is while we are going with a reserve of previous periods, when some are using their cards, someone bought in advance, etc. From the beginning of this week, the number of visits is going to decrease even more if everything is not cancelled. About 20% of customers have “frozen” their cards, and we provided most of the customers with a freeze at our own expense — these are deferred future losses," the head of Maximus described the situation.
Minnegaliev did not comment on how much in monetary terms the losses are, referring to trade secrecy, but noted that the loss is recorded when 30% of the turnover falls, and now it has sagged and is already 55%.
“The operation of fitness clubs is arranged in such a way that we always work on a flow principle — the influx or renewal of club cards stops and we fall into a financial hole. Now we are not banned from working, but there are no sales. Yes, people come, we have to work, we bear expenses, we maintain staff, we burn electricity, we pay for communal services, but there are no new cash receipts. Accordingly, we find ourselves in a money pit. We also have no savings, money does not lie on the shelf, and we have to make sales volumes every month to support ourselves," Minnegaliev complained.
Natalia Tkach, the director of the Kazan fitness club X-Fit-Akbars, noted in a conversation with our publication that if such dynamics persists, there will be nothing to pay for the utilities:
“Attendance has dropped by 50%, and there have been no sales at all in recent days. If restrictive measures were introduced gradually, of course, there would be no such an outflow of customers. Now, in these conditions, there is not even the task to earn, the task is simply to survive. At least, to pay the salaries, utilities and current expenses. It is no longer possible to break even with such a flow as it is being now.
“A sick person will not go to a fitness club”
The situation is no better in other cities of Tatarstan. As the director of the Nizhnekamsk club of the Orange network, Daria Bayramova, told us, there are a lot of unvaccinated people in the city:
“The attendance has decreased by half. Accordingly, all this has greatly affected sales, because our main customers — solvent population, people with income, self-employed — are not going to the gym now. The city does not make the one-component vaccine Sputnik Lite. Therefore, even those who have had their first dose have to wait another three weeks to get the second one, and they, of course, are staying at home. For our part, we met the customers halfway and provided them with a freeze at the expense of the club, but it all has affected sales, personal training, additional services.”
“We expect that people will begin to be vaccinated, and in about a month at least someone will return. Although we are calling our customers and many do not yet understand what to do. It is clear that we are left with no choice, but not everyone is ready to get vaccinated tomorrow. The slump is not only in our industry, in other businesses too, and the people working there have a sense of an unstable future. Therefore, they are not in a hurry to spend money now, thinking about what may happen in the future. What do people refuse in the first place? Fitness services, tourism and other entertainment. Therefore, it is generally difficult to predict what will happen nex," Natalia Tkach shared her vision.
Other market participants are also being pessimistic. Ruslan Minnegaliev said that in Rostov Oblast about 50% of fitness clubs have been brought to bankruptcy, in Moscow restrictions were lifted after 3 weeks, so it did not affect them so much.
“Our proposal is simple — to cancel QR codes for the industry, at the very least — to delay their introduction. Because fitness is not the place where a sick or ill person is going to go. This is 100%. This is not public transport, which, even if a person is ill, a person uses. Fitness centres are a place where people recover, train, get fit, and even recover from illness. Well, we, accordingly, comply with all the requirements of Rospotrebnadzor for the prevention of coronavirus infection.”
The manager of Maximus network announced his readiness to provide their areas for the organisation of vaccination points. It will start working already today and will be located on the first floor. Doctors from the city polyclinic No. 2 will vaccinate visitors.
“The chances of getting infected in fitness centres are minimal”
The aspirations of Kazan owners and managers of fitness centres were supported in Moscow. The Association of Fitness Industry Operators of Tatarstan and Russia has sent a voluminous letter to President of the Republic of Tatarstan Rustam Minnikhanov, in which it asks to make the territory of fitness clubs free from mandatory verification of vaccination documents, QR codes and certificates of transferred coronavirus from customers.
“The introduction of such measures causes a number of negative consequences for fitness industry enterprises and a number of requirements that cannot be implemented, while the desired effect in the form of an increase in the number of vaccinated citizens will not be achieved. By itself, the introduction of QR codes was originally a method of keeping records of people who have been vaccinated, and not as a way to restrict the rights of citizens to access services.”
It is important that the certificate of Сovid-19 is not issued to those persons who did not apply to a medical institution with the disease, but were treated independently, because, taking into account the burden on medical institutions, citizens do not always have the opportunity to get to a doctor's appointment or receive medical care in a timely manner, and there are also citizens who have suffered a mild illness, without grounds for going to a medical institution. The certificate of antibodies is not a confirmation of the coronavirus suffered and does not serve as a reason for assigning a QR code to the patient, thus a significant part of citizens (including clients of fitness clubs) who have suffered the coronavirus infection cannot confirm the fact of the previous disease, since the formation and level of antibodies are individual, the appeal says.
The letter notes that the presence of vaccination or antibodies is not in itself a guarantee that a person will not get infected again. Such restrictions, according to the Association, do not contribute to minimising the spread of COVID-19.
According to industry workers, the chances of getting infected in fitness clubs are minimal, since they have increased requirements for air exchange, measures to restrict visits, strict disinfection rules are applied and social distance is observed. As an example, the experience of Moscow is given, in which, even at the peak of the pandemic, QR codes for fitness visits were not introduced, but the increase in morbidity was still managed to be contained.
Industry representatives are concerned that the current situation may lead to the closure of enterprises, which means an increase in the unemployment rate and additional budget expenditures.
“At the moment, fitness clubs pay large amounts of rent (on average, an area of at least 1,500 sq. m.), which is feasible only if there are stable financial indicators (presence of customers). To date, fitness clubs are not able to return to revenue figures for similar periods in 2019, since the recovery of the industry is possible only in the long term, provided there are no aggravating factors (the introduction of additional restrictive measures).”
To the current rent, clubs are required to pay the previously formed debt, for which the owners provided an installment plan with a limited repayment period according to the decree of the Government of the Russian Federation No. 439, as well as payment of taxes for 2019, a deferral for which was granted. Legally, there are no methods or measures that would be a protective mechanism for fitness clubs in relations with the owners of premises," the letter to the head of the republic says.
For their part, industry representatives are ready to open vaccination points on their territories, develop rehabilitation programmes for people suffered COVID-19, hold promotions and provide discounts and bonuses to vaccinated visitors, as well as vaccinate up to 80% of their employees, strengthen disinfection measures and establish strict control over their compliance.
According to Ruslan Minnegaliev, the appeal was not only submitted to the office of the president of the Republic of Tatarstan, but also through the Association reached the Business Ombudsman and the Deputy Minister of Sports of the Republic of Tatarstan. So far, only the mass media have responded to this heart cry.