South Korea, known for its undeniable obsession with physical fitness and social media-fueled body image ideals, is grappling with a startling reality: its once thriving fitness industry is in serious decline. Gyms are shutting down at an alarming rate, signaling a deep-seated crisis of sustainability within the sector.
the closures are even more troubling than those witnessed during the height of the COVID-19 pandemic. While 430 gyms closed in 2020 and 402 in 2021 due too government-mandated shutdowns, last year saw an even higher number of closures, with at least 36 more gyms already shutting their doors in early 2025. This grim trend paints a bleak picture for the future.
Traditionally, gym owners in South Korea charge a “gwonriggeum” – a business transfer fee – when selling their establishments. This fee allows the buyer to inherit the existing customer base and equipment. However, the current situation is so dire that many gym owners are now willingly surrendering their businesses without any gwonriggeum. This act of desperation underscores the financial instability gripping the industry.
“Gyms that can’t even charge a transfer fee are in serious trouble,” remarked a struggling gym owner who wished to remain anonymous. “Most don’t last beyond a year or two,” he added, predicting further closures as the crisis deepens.
The root of the problem lies in a confluence of factors, chief among them the brutal price wars raging within the industry. Large chain gyms are aggressively vying for customers by offering incredibly low membership fees, some as low as 10,000 to 20,000 won (approximately $7–$14) per month. This predatory pricing strategy leaves smaller, self-reliant gyms struggling to survive, financially bleeding as they grapple with skyrocketing operational costs.
As gyms close their doors, a darker reality emerges: fraudulent closures. some gyms operate under a deceptive scheme, collecting significant prepayments from members before abruptly shutting down. This leaves countless individuals stranded without refunds and with no legal recourse.
last month, a high-profile gym in Goyang, Gyeonggi Province, abruptly closed, leaving many prepaid members in distress. A similar scenario unfolded in Hwaseong, also in Gyeonggi Province, last November, igniting consumer complaints. Victims of these closures often prepaid meaningful sums for personal training sessions, only to be met with promises of examination by authorities, leaving them in limbo.
The Korea Consumer agency reports a sharp increase in complaints about gym prepayment fraud, rising from 2,406 cases in 2021 to 2,521 as of September 2024.This alarming trend indicates a systemic issue within the industry.
Attorney Kwak Jun-ho from Law Firm Chung issued a warning against falling victim to deceptive tactics. “If a gym suddenly offers an unreasonably low membership fee, it could be a red flag,” he stated.
What steps can South Korean consumers take too protect themselves from fraudulent gyms?
South Korea’s Fitness Crisis: Inside a dying industry
South Korea’s fitness landscape is facing a troubling reality: once-thriving gyms are shutting down at an alarming rate, signaling a deeper crisis within the sector.
To understand this phenomenon, Archyde spoke with Jin-Woo Park, a veteran gym owner and industry consultant, who sheds light on the factors behind this decline and the implications for consumers.
Interview with Jin-Woo Park
Archyde: Mr.Park, the closure rates of gyms in South Korea are startling. What are the key drivers behind this crisis?
Jin-Woo Park: It’s a perfect storm of factors. Firstly, we’ve witnessed a fierce price war led by large chain gyms offering incredibly low membership fees. This strategy leaves smaller, independent gyms struggling to stay afloat, especially with rising operational costs.
Archyde: you mentioned predatory pricing. Can you elaborate on how this impacts smaller gyms?
Jin-Woo Park: It’s become a vicious cycle.These large chains aggressively undercut prices, forcing smaller gyms to follow suit just to remain competitive. However, they often lack the financial resources or economies of scale, ultimately leading to thier demise.
Archyde: The recent wave of closures even surpasses those experienced during the pandemic. Is this specifically due to the price wars?
Jin-Woo Park: While the pandemic initially hit hard, the current situation is more complex. While the price wars exacerbate the problem, there’s an increasing number of fraudulent closures. Gyms collect significant upfront payments from members and then abruptly shut down, leaving many without refunds or legal recourse.
Archyde: Have you witnessed this type of fraud firsthand?
Jin-Woo Park: Unfortunately, yes. it’s a growing concern within the industry. The emotional and financial distress it causes to members is immense.
Archyde: What advice would you give to consumers considering joining a gym in South Korea?
Jin-woo Park: Be cautious and do your research thoroughly. Look for established gyms with a proven track record. Avoid gyms offering unbelievably low prices,as these could be red flags. Always read the contract carefully and ensure you understand the terms and conditions, especially regarding refunds and termination policies.
Archyde: What is the future of the fitness industry in South Korea?
Jin-Woo Park: It’s a critical juncture.The industry needs to address these fundamental issues head-on. Regulatory bodies need to crack down on fraudulent practices,and existing gyms need to focus on quality,customer service,and innovative programs to differentiate themselves. ultimately,the future hinges on building trust and sustainability within the sector.
