Long term gym memberships and spa packages: What you need to know

Long term gym memberships and spa packages: What you need to know

The first time I ever stepped into a big, fancy gym chain was when I was 19, about oh a zillion years ago. A friend had bought a membership at California Fitness, and we went to something called "Latin Jam" in the afternoon, which turned out to be an aerobics class filled with housewives set to Ricky Martin songs.

Regardless of what I thought of the Latin Jam class, I was quite surprised to hear that after such a long time as one of the most prominent gym chains in Singapore, California Fitness recently closed down. People thought it would live forever.

It's understandable that those signing on for packages, which can last several years (some people even sign up to extend their memberships for as many as four years at a time), at other gyms might be a little leery. Heck, I know someone who signed up for a lifetime membership at True Yoga, which reportedly cost him more than $7,000. Let's hope the chain really does manage to survive a lifetime.

I've always been against signing up for long-term packages-not just gym memberships but also spa and beauty packages that have you paying for 10 sessions upfront. It always seems like a good idea at the time, since you'd just had a great session and signing up was the only thing that would get the salesperson to leave you alone. Here are a few reasons that's a colossally bad idea.

Businesses in Singapore close down at alarming rates

Sure, you know that if the place shuts down you'll lose all your money. It's common sense, right? But you won't be that unlucky.

Well, actually you could be, more so in Singapore than in many other countries. The attrition rate for businesses is high here due to the fact that rents rise so abruptly and everyone's fighting for a piece of a tiny pie. For instance, the spa industry is notorious for leaving customers in a lurch when spas disappear overnight.

Every business is in danger of closing down, even one as famous as California Fitness. So don't commit a sum of money you're uncomfortable with and avoid signing up for very long memberships.

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The outlet might close and it will no longer be convenient for you

Many people who work in the CBD sign up for gyms that have branches at Raffles Place, thinking they can sneak in a workout during lunchtime or after they knock off.

But bear in mind that the gym maintains its Raffles Place branch not because it cares about all the exercise-starved office workers there, but because it is profitable to operate there… for now.

When this changes, due to an increase in rent or whatever, you can be sure they'll pull out. Will you really want to go all the way to their other branch at Suntec City when that happens?

In addition, even if the place doesn't close down, management is free to make whatever changes they see fit. So, if you joined only because you adored their Abs Butt and Thigh classes, be aware that these may one day be cancelled in favour of the next new fad.

Your life circumstances might change, preventing you from using your package

So you've signed up for a two year membership at that hot yoga studio at Raffles Place. Well, I really hope you love perspiring in a room that's heated to 40 degrees, because if you change your mind and decide it's not for you, you'll become one of the hordes of Singaporeans trying to sell their gym memberships on online forums.

Two years is a long time, and a lot can happen before your membership expires. You might lose interest in the sport you signed up for or move on to other interests. For example, you might change jobs and start working at Changi Business Park instead of Raffles Place. Some women might get pregnant and could have to stop working out for the rest of their membership.

It is probably cheaper to pay for à la carte sessions elsewhere

When gym or spa salespeople try to convince you to sign up for their packages, they always harp on the fact that the per-session price will be lower for you if you grab this today-only deal. A facial normally costs $150, but with the package, each one will be $120 only! You SAVE $30!

What they fail to mention is the fact that sessions at their establishment might be overpriced anyway in comparison to cheaper alternatives on the market.

For instance, a subscription to fitness app KFit costs $99 a month and lets you try a buffet of 10 classes per month from a range of gyms and studios. That's cheaper than the $150 that many gyms are charging their Raffles Place customers. And if gym equipment is all you need, you can get just as fit working out at ClubFitt gyms, which cost a grand total of $2.50 to enter.

Finally, if you die-die must go to that studio or spa, you might feel the pinch when you fork out the cash for à la carte sessions, but guess what, you'll probably end up spending less overall than you think, since you won't have the pressure to use their services as frequently.

You might not have the time to get full utility out of your package

I have many friends who pay $150 for their gym memberships at fancy chains with Raffles Place branches, but only manage to make it there once or twice a month because they're too busy working to work out.

Lots of people sign up for gym memberships in December and January pursuant to their New Years' resolutions to lose 50 kg, but by 21st January they've completely lost steam, and by March they're trying to sell their memberships online.

How to protect yourself?

It's easy enough to tell people to do background checks on a company before signing up for their packages. But seriously, the advice from CASE to check the lease of an outlet before you sign up is useless. I'd like to see someone asking that salesman (probably working there part time while getting his poly diploma) for a copy of the lease.

One thing you can do to give yourself a tiny layer of protection is to check the cancellation or termination rules of the membership before deciding whether to sign up. You want to know how cumbersome the quitting process is, and how much you stand to lose in terms of termination fees. Also speak with former members who've quit to see how hard it was to terminate the membership.

Frankly, if the company goes under while you're still a member, this will do nothing to help you get back your money. But if you are proactive about quitting or selling your membership once you are on longer getting any utility out of it, you're much less likely to get left high and dry when the company folds than if you just continue to hold on to it.

The article first appeared on MoneySmart.


MoneySmart.sg is Singapore’s leading personal finance portal, and aims to help people maximise their money with powerful tools and engaging content.

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