Save the Health and Wellness Industry (And While We’re At It, Public Health and The Economy): ClassPass Data Points to the Path Forward
Over the past two weeks, ClassPass’s global revenue fell by 96% as we notified more than a million customers that we had stopped charging them for their ClassPass memberships due to the continued spread of COVID-19. While our teams worked late nights and evenings to build technology that would help fitness studios get through the coming weeks, many couldn’t wait. Already some of our top partners have laid off 98% of their staff and it’s about to get a lot worse.
My team and I are spending all of our waking hours working on how to keep our customers and employees safe (and employed) and doing what we can to help our fitness and wellness partners stay in business. Here are three efforts we announced this week:
- Livestreamed Classes, Training Sessions & Appointments: we have enabled fitness and wellness partners to offer livestreamed classes through the ClassPass app and website (through June 1, 2020, 100 percent of the proceeds from these sessions will go directly to the partners in shutdown markets).
- ClassPass and CP Member Contributions: We have added the ability for customers to now donate to their favorite studios directly through the app, and ClassPass will be matching the total amount of donations made to studios up to USD $1 million as part of our partner relief efforts (details here).
- Lobbying for Government Assistance: In partnership with many of the top brands in the fitness and wellness industry, we have launched a petition asking our federal and state governments to expediently provide relief to studios, gyms and wellness providers to ensure their survival through COVID-19-related shutdowns.
But these initiatives can only play a small part in saving the industry. We are asking for the significant industry relief measures called for in the petition, in most cases beyond what Western governments indicate they will do, and as importantly we are also calling for governments to act far more aggressively in suppressing and containing COVID-19.
As the CEO of a company that operates in 30 countries, I have been witness to how effective various government responses have (or haven’t) been in protecting the health and wellness industry through COVID-19 outbreaks. In an effort to both provide our industry with hope, and to implore Western governments to more closely adopt the proven measures taken by East Asian governments, I have decided to share some of our internal data.
Some Asian countries have shown that COVID-19 can be contained with aggressive testing of all patients with symptoms, even mild symptoms, and tracing and testing all their contacts. However, most Western countries, including the United States, have failed to launch the early and aggressive testing programs necessary to monitor and contain the spread of the virus. Hong Kong, Singapore (and Taiwan and South Korea, where we don’t yet operate), who learned hard lessons from earlier coronavirus epidemics (e.g. SARS in 2003 and MERS in 2015), have shown that aggressive testing, contact tracing, border controls, temperature checks and social distancing policies do successfully contain the virus. As the USA (along with the UK and most of Western Europe) was unable to test at scale at the beginning of the outbreaks, the COVID-19 pandemic has gotten away from us. It is now too late to hope for containment. This has left a 5-week (or greater) national quarantine, aka an enforced shelter-in-place, as the only means to slow the continued spread and beat back the virus sufficiently so that we can return to a containment strategy based on testing and contact tracing.
The evidence that government action can contain COVID-19, and therefore keep people active and our partners in business, is quite clear based on our own ClassPass data. The chart below shows how fitness behavior was impacted in Singapore (SG) and Hong Kong (HK) during their initial outbreaks, and how they fared in the subsequent weeks.
The chart illustrates that there was a dip in customer activity once COVID-19 broke out in late January, which quickly rebounded once initial response measures were successful.
Here is the same chart for our top 15 American cities:
The chart illustrates the surge in New Years’ resolutions related activity that slowly tails off until, all of a sudden, COVID-19 outbreaks begin to occur and usage falls effectively to zero.
Here are some other top markets, predominantly in Europe:
These views are backward-looking, observing historical weekly class attendance. For a stark, forward-looking view, we can observe “reservations made” for future class visits.
In all markets the pattern is the same: when a COVID-19 outbreak occurs there is a massive usage decline. In contrast, however, SG and HK experienced less dramatic falls in usage followed by a rapid return to usage near pre-outbreak levels. The data supports the case that containment and just as importantly, a renewal in economic activity, is achievable with extensive testing, coupled with contact tracing and isolation.
Nobody at ClassPass is an epidemiologist. But I refuse to be coy when the data is so clear: in so many countries where we operate, we are relying on half-measures with no end in sight. Our industry is teetering on the edge of oblivion in most markets around the world, except where governments have quickly and decisively applied proven testing and tracing to contain the outbreak. Other governments missed their first opportunity to avoid catastrophe, and now there are no good options.
Therefore our only choice is an immediate quarantine and total shutdown to stop the spread and reduce the number of cases to a manageable number, as outlined by more qualified experts here, here and here. Only then will countries such as the US be able to emulate the testing and contact tracing tactics that have proven successful in countries that have better contained the virus — and get us and our partners back in business. These measures must be implemented everywhere as soon as possible, and not in the current patchwork quilt we see today. We must accept the tradeoffs and limitations that a national quarantine will have on our way of life, as it will only be temporary for a little more than a month. This begins with uniform and broad quarantine, followed by vigorous and expansive testing, contact tracing supported by apps (with in-built privacy protections as they have done in SG), border controls (possibly quarantines) and temperature checks at office buildings and other locations. If governments do not resort to these bold actions soon, the majority of health and wellness companies will go out of business as they cannot financially withstand the prolonged shutdown that would otherwise be necessary.
Moreover, increasing rhetoric in the US about a non-response to COVID-19 (effectively, allowing the spread to save the economy over lives) is not only unethical, but it is a false choice as it is unlikely to work. As Bill Gates said in a recent TED interview, “It’s very tough to say to people, ‘Hey, keep going to restaurants, go buy new houses, [and] ignore that pile of bodies over in the corner. We want you to keep spending because there’s maybe a politician who thinks GDP growth is all that counts.’” There is no such thing as a functioning economy with a failing health care system and millions of deaths.
I therefore join the experts cited above in calling for an aggressive multi-staged approach by governments around the world to save the health and wellness industry (and public health), including:
- a national quarantine and expansive (potentially state level) border controls and closures
- in the US at least, dramatically expand testing and PPE and ventilator production, either by paying for additional lines at existing manufacturers such as Medtronic or by invoking the Defense Production Act and forcing manufacturers to produced needed equipment),
- the significant financial relief measures laid out in our petition and,
- more aggressive and decisive containment strategies like those adopted in Singapore.
The futures of our employees and the livelihoods of hundreds of thousands of people who work in the health and wellness industry, as well as the families that depend on them, rely on such action.
[Note: Thank you to Zach Apter, Chloe Ross, Tom Aveston, Mandy Menaker, Don Neufeld and Dr. Rick Lanman, MD for their extensive contributions to this post. Thank you to the ClassPass team for fighting so hard to get us and our partners through this.]
