60% of fitness clubs in Russia may close down due to rental problems

60% of fitness clubs in Russia may close down due to rental problems

60% of fitness clubs in Russia may close down due to rental problems
The Russian fitness market is threatened by another wave of liquidations.  More than two-thirds of the fitness industry businesses can leave the market without, failing to enter into the agreement with their landlords.  Club owners, who have experienced the effects of the restrictive crisis, have failed to convince property owners to set preferential rental rates.

Olga Kiseleva told Vedomosti about the deplorable state of affairs.  She heads the Fitness Industry Operators Association.  According to her, many owners of real estate turned out to be ‘intractable’, which means the loss of business sites for more than 60% of tenants gyms
Comparing this with the data of 2020, the representatives of the Association indicate that that time, the same situation affected 40% of the establishments of fitness market.
This led to the fact that about 25% of the fitness clubs left the market.  About 10% of the clubs have been closed over the past six months, not having survived the mandatory QR codes regime, introduced at the initiative of the authorities.

Experts point out that the behavior of landlords is understandable.  Most of them are large shopping centers that have recently found themselves in a difficult situation.  Trade goes online more and more, citizens prefer to arrange food delivery to their homes.

In October 2021, many fitness clubs launched an initiative to replace QR codes with a more understandable coronavirus infection prevention system for the population.  In particular, it was proposed to vaccinate from 80% to 100% of employees, to introduce restrictions on the loading of premises and to establish special bonuses for visitors who have been  vaccinated.
The President of the Association said that the organization had repeatedly sent appeals to the authorities with a request to provide support to landlords.
Market participants proposed to reduce tax rates on property, and to reimburse rent payments from the tax burden (for example, taxes on land).  However, no decisions were made by the Government in this direction.

Since May 2021, the National Fitness Community has been discussing the idea of   signing a special declaration that will allow current market participants to receive visitors from fitness clubs that have gone bankrupt or liquidated.  Whether this will save the fitness market without eroding consumer confidence remains a big question.

30.11.2021