The truth about gym profitability in 2026

Hey Gym World,

It’s that time of year again.

Every year, Two-Brain Business drops a monster of a report: the State of the Industry guide. This guide pulls together more real-world gym data than any other resource in the business, sourced from thousands of gyms worldwide and supported by the folks at Kilo, Wodify, and other top software companies.

Chris Cooper, founder of Two-Brain Business, has been putting the State of the Industry Guide together since 2018, back when the dataset was just a few hundred gyms. Today, it’s tens of thousands of data points across countries, business models, and every revenue stream you can think of. It’s as close as we get to a true snapshot of what’s actually happening in coaching gyms.

This week, I sat down with Chris to break down this year’s findings.

Here’s what stood out, what’s changing, and what it means for your gym.

Lead Generation Isn’t the Problem, Conversion Is

Chris said it immediately: gyms don’t have lead problems. They have follow-up problems.

Here’s what the data shows:

• Gyms average 32–36 leads/month

• Only 6 book an appointment

• Only 2 join

• Median close rate: 33%

• 14% of gyms never call leads at all

Let that sink in.

Most gyms don’t need more lead flow; they need a process. If you fix speed-to-lead and follow-up, you can double your sign-ups.

Kilo’s own data shows the same pattern: conversion is improving year-over-year, not because gyms are getting more traffic, but because they’re finally closing the gap between “lead comes in” and “talk to a human.”

Gym Models Are Evolving

One of the clearest trends this year: big group isn’t the dominant model anymore.

A few numbers jumped out:

• In Australia, 93% of group gym revenue comes strictly from memberships

• In the U.S. and Canada, revenue is far more diversified

• Median big-group attendance worldwide: 6.6 people

Put together, these numbers reveal a pattern: most gyms think they’re running “big group,” but in reality, their classes are functioning like small group while being priced like big group.

That’s why when Chris described the gym he’d open today, it looked very different:

• 2,000 sq ft

• $15k in equipment

• Anchored in 1:1 and semi-private

• Group as a secondary offering

Chris isn’t just sketching out some hypothetical model. This is exactly how Catalyst runs today.

At Chris’s gym, semi-private coaches earn $80–$120/hr, which isn’t just great pay, it’s proof the model is sustainable. They still run a few group classes as a “catch-all,” but the real engine of the business (and the careers of his longtime coaches) is in semi-private training.

The trend is clear: Gyms are making more money with fewer clients by offering higher-value services.

Pricing, Profit, and What Gym Owners Earn

Pricing has been a pain point for years, but this year’s data finally shows some good news: things are moving in the right direction.

Here’s where the numbers landed:

• Median group membership: $175/month

  (But based on margins and service delivery, most gyms should be closer to $205+)

Median ARM across models:

• Group: $158

• Small group: $240

• PT: $283

And here’s the milestone: median owner income is now over $50k for the first time ever, up from $22k in 2018.

So the trend line is positive. Owners are finally earning more, and it’s coming from:

• Raising rates

• Expanding service mixes

• Better ARM

• Clearer value delivery

• Fewer gyms racing to the bottom on price

The one thing lagging behind? Coach pay. As more gyms shift toward semi-private (where margins support real wages), Chris expects that gap to tighten.

Member Retention: It’s Not Attendance

It’s Adherence.

One thing Chris and I dug into was retention, because the data flips a common belief on its head.

Most gym owners think: “More attendance = better retention.”

But that’s not what the report says.

Chris broke it down really simply:

Retention isn’t about how often someone comes; it’s whether they’re using the membership they’re paying for.

If someone buys 3x/week and they actually come 3x/week, they stick. If someone buys unlimited, but they only show up twice, retention drops, even though that person is technically attending more than a 2x/week member.

The issue isn’t the number of visits. It’s the gap between what they pay for and what they use.

This is why unlimited memberships create so many headaches:

• Clients feel like they’re wasting value

• Upsells get messy (“Doesn’t unlimited include PT?”)

• Owners lose leverage

• Everything becomes “included” by accident

And it’s why the best retention play in the report was surprisingly simple: adjust the membership to fit the usage.

Downgrade people when needed. Reassess in 90 days.

AI, Automation, and the Future of Gym Operations

AI is changing the back end of gym ownership faster than most people realize.

Chris now writes monthly programming in 27 minutes, batches daily content in 6 minutes, and uses automation to cut hours of admin every week.

But the big takeaway wasn’t “AI will replace coaches.” It was the opposite: as AI handles routine tasks, in-person coaching becomes more valuable, not less.

Members aren’t paying for information. They’re paying for leadership, confidence, and connection.

AI search (ChatGPT, Gemini, Claude) will also shift how people find gyms. Gyms with consistent content libraries will show up more often in AI-generated answers, giving early adopters a compounding advantage.

The Big Themes This Year

If you take nothing else from the guide, take these:

• Gyms are more profitable than they’ve been in a decade

• Owner pay is rising

• Semi-private and hybrid models are accelerating

• Pricing is correcting upward

• Lead quantity isn’t the bottleneck anymore

• Content matters more in an AI world

• Sales is the first act of coaching

• Better systems—not harder work—are separating top gyms from everyone else

Want the full numbers? Download the guide.

Want to hear Chris talk through the data? Watch the full episode.

Here’s to building smarter, more sustainable gyms.

cheers,

j