Are climbing gyms profitable?

Climbing gyms are expensive, most charge more than 50$ per month for a monthly membership. And a day pass isn’t cheap either with at least 10$ or more. So, it seems they must be a goldmine, right? I mean, if they have 1000 members, this means 60,000$ per month – WOW that’s a lot of money, and we didn’t even account for day pass sales. Have you ever considered opening a climbing gym? Read on; I’m going to debunk some of these myths. As it turns out, running a climbing gym is a tough and expensive business with some very risky assumptions, huge upfront investments, and monthly costs higher than the yearly salary of many folks. It’s time to take out a pencil and calculator and answer the question: Are climbing gyms profitable after all?

Your own climbing gym – a dream job?

To most of us, owning a profitable climbing gym seems like the ultimate dream job. You hang around at your gym all day, go climbing whenever you like, sip coffee or beer in between while making a ton of money from all the climbers. I’m sure you have done some math as I did before. “There are 100 people here right now, take this times 8 for 8 hours operation per day. Then multiply by 10$ per person, times 30 days per month, and you rake in about 240,000$ per month. Wow, seems like a pretty sweet deal right, I guess I could do that too”.

Reality looks WAY different than that, though, opening a climbing gym needs a hefty sum to invest upfront because of the climbing wall that needs to be custom-built.But since you cannot just build a climbing wall inside any commercial space. A climbing wall typically goes up to 30 ft or higher – finding a building for this usually involves old industrial real estate. This might include further cost for remodeling the interior of the building etc.

After signing a lease, we still need to build the gym, and even afterward bills keep piling as we need to pay staff members continually for example. And i’m not even talking about rental equipment, maintenance, utilities, insurance and upkeep cost of walls and ropes.

How i wrote this post

I’ll analyze some of the costs and profit opportunities when running a climbing gym. I did my research using public posts from rock climbing forums and also asked friends and fellow climbers. They either run gyms or work in gyms about typical cost metrics and averages. Afterward, we’ll run these values through a cost/profit and calculation. The short result: Are climbing gyms profitable? They are, given the number of gyms in populated areas that have been in business for decades. But a profitable climbing gym needs to get down the membership game correctly, as recurring membership is what makes the profits.

I will walk you through some math and estimations in this post, and open a hypothetical gym. I’ll explain my assumptions and why some of them are risky and not necessarily correct. In the end, we will see if a climbing gym is profitable or not, and which assumptions are critical for its profitability. Note that I’ll refer to “you” and “we” in this article, kind of like we are a team planning business start-up.

Some Assumptions about the potential gym.

Assuming we’re not already millionaires, our gym will be a smaller gym, around 5000 sqft. We will need some 35 ft+ high warehouse to have high enough ceilings and with 5000 sqft space. This will give us enough climbing area (around 5000 ft assuming we have four sides with each 70 ft length and can use half of them for climbing walls.) We could probably expand it by installing a platform in the middle of the gym with further climbing walls.

This gym will be small but functional. But as the gym is relatively small, there cannot be more than 20 people climbing on the wall at each time. This is an estimate assuming each route takes up space of 7 ft so that we can have ten routes per climbing wall, with two climbing walls in our gym. Makes 40 active people if you take belayers into account.They usually take turns with the climber. Which means we are somewhat limited in terms of maximum visitors at any given day.

How many active people can a climbing gym accommodate?

I assume 40 people at each given moment can be in the gym actively belaying or climbing. Each climber will stay on average for 2 hours. So we can accommodate 160 people per day. Why? Around 8 hours of operation, with 2 hours staying time, means we have 8 hours / 2 hours = 4 different “sets” of people, with each set consisting of 40 climbers. This means 4*40 = 160 people per day active in the gym. Assuming most people will climb 1-2 times per week, this means we can have around 7/1.5*160 =~ 750 different people climbing per week or around 2000 per month.

This calculation also gives us a maximum limit of how many members we should let join the gym, as anything more than 2000 can become a problem crowd wise. Nobody wants to wait long lines to climb in the gym where they pay a monthly membership.

Upfront cost: Equipment, climbing wall, remodeling of property: ca 250,000$ one time.

Opening a climbing gym will mean you have to invest substantial money upfront. A climbing wall is not going to build itself, and you need specialized staff to build it due to the height of the ceiling. You might need specialized modular panels, which are often building-specific or even completely custom-made (source). The actual climbing walls also require good routes with draws, holds and crash-pads, which need to be planned by professional route setters (source). If you’re going to rent industrial real estate, like an old warehouse, for example, you will also likely need some substantial remodeling.

Otherwise, it won’t be pleasant for visitors. Think bathrooms, amenities, sauna, etc. And if you want to offer yoga and fitness classes, you’ll also need a fully equipped gym. All in all, the cost of remodeling, building the climbing wall, and other fitness-related equipment will likely cost you between 200,000$ and 300,000$, but this depends on your business expertise and experience too.

Pro tip: Saving some money with used gear where it makes sense

You could probably save some money by opting for used fitness gear, as barbells and machines don’t have to be new. Same goes for climbing foot and handholds – although newer is nicer in many cases, as some of the 80s style climbing gym holds were nasty on fingers and palms.
Around 200,000$-300,000$ means an average of 250,000$, split on 4 years = 48 months. We end up with ca. 6000$ per month including some interest as you take a loan.

Recurring cost: Staff, insurance, utilities, rent: ca 45,000$ per month.

Now that we have initial investment down let’s see what a climbing gym costs you per month. The good thing is, less than prime real estate is needed for the site – this means you can get relatively cheap real estate in most cases. Let’s assume you get a good deal for 5$ per square foot, which is a reasonable price for commercial real estate.

Good property costs a lot of rent per month.

It also seems a reasonable number for industrial/commercial estate in an accessible area visible from main streets etc. A typical smaller climbing gym will be at least 5000 sqft, which means at 5$ per sqft you’re looking at a monthly lease of 25,0000$.

As the gym is still a large building, even with 5000 sqft being on the smaller slide of climbing gyms, it’s still a lot of money. And this is at an excellent rental rate. I know that in places like Los Angeles, commercial real estate is more likely to be at 10$/sqft. You’ll also need a warehouse with high enough ceilings. Which means utilities and facility fees will be higher than regular office space due to the cost of upkeep during winter times.

Upkeep will be a monthly recurring thing.

Don’t forget about climate-controlling the building. Sweating people will need air conditioning and heating in winter. But heating a big and tall warehouse in winter becomes expensive quickly.The good thing is that repair costs will be relatively low as climbing walls have a long lifespan, as does fitness equipment.

Furthermore, the climbing walls themselves, as well as the equipment used, are more expensive than most people would expect them to be. Take in costs like cleaning and safety-checks which are low compared to rent, but still ongoing costs.Equipment such as ropes, climbing harnesses and even climbing shoes eventually will break. They will then need to replaced, so it’s only fair to assume a monthly upkeep for these things too.

Thanks to great word-of-mouth marketing, you’ll most likely need no or very low paid marketing.
You’ll also have some staff, but staffing needs per customer are very low for a climbing gym. If you want to keep it cheap, you’ll only need someone at the counter and a person to supervise the climbing area. Both can be optimized by hiring students and having volunteers help out whenever possible. So let’s assume to manage utilities, facility fees, rent, repair, equipment and staff compensations by a healthy 20,000$, which will cover insurance too.

Extraordinary cost: Replacing part of the climbing ball, expand to new equipment and so on: 50,000$ every two years

Let’s say this is around 50,000$. It will include things like buying new climbing walls, expanding parts of the gym, and event costs for special occasions. Lets also split this cost on 24 months as it will likely only occur every two years or so, so it’s around 2,000$ per month.

Total cost per month, including credit payment for the initial investment: 55,000$ including buffer.

Total cost per month, if we add up all the above costs, will be 5,200$ + 45,000$ + 2,000$ = ca 55,000$ with some buffer included. This is your monthly “burn rate”, meaning if you don’t make any revenue, you will accumulate over 50,0000$ of debt per month. Pretty steep right?
Despite the high upfront investment, the recurring costs take up the main portion of the costs. Of the 55,000$ per month, more than half of the cost is from renting large enough real estate, and another considerable part is upkeep, insurance, and staff compensation.

If you can find a good and reasonably priced real estate, it means you drive down that cost.
Same goes for staff compensation: Try to employ students and part-time workers, maybe even pay them with perks and benefits including some fair but lower wage and you have a vast potential to save money here.

Sources of income and how much profit to expect.

Now that we know how much a gym costs us per month. Let’s see how we can generate money from it; after all, it’s a business. When you run a gym, you can have your revenue come from different sources. It’s not only a “day pass only” business. But every climbing gym is a unique business for itself, so it’s hard to find an average “revenue mix”. What is an average revenue mix? It means your income does not come from a single source. Instead, it’s a mix of revenues from different sources with a certain percentage coming from each source.

Some gyms make 80% of their money with day passes and events like kids birthday parties but have almost no members. And then you have hardcore gyms where 90% of the revenue comes from monthly memberships. So, take the following breakdown with a grain of salt. I tried to gather information from anecdotes and experiences of people in the industry both from online forum posts and real life, and then do sensible “guesstimation” to come up with reasonable values.

So let’s break down our sources of income:

• 50% Memberships makes most revenue by a long shot.
  – 50% “Non-climbing” Yoga and Pilates, spin, CrossFit, etc. bring half the members.
  – 50% Climbing members
  – Amenities like showers and sauna bring members.
• 10% from having a portable wall to rent out, which makes good money and brings new customers.
• Competitions lose a lot of money and attract very few memberships.
• Retail and food loose money, especially shoe sales.
• Gear retail loses unless you’re running an REI.
• 5% Youth programs do okay but drive family membership.
• 15% Day passes pay the desk staff but don’t bring in much.
• 5% Belay classes make very little.
• 5% from climbing lessons, which make less than most think.
  – The course setting is expensive if you do it right.
• 5% from certain special events profit if you have celebrity climbers etc.
• 5% from summer camps, which do okay usually

Active member numbers – what to assume, how to find the right location for the gym

The number of members in your gym is highly dependent on where you open a gym. Some gyms have 200 members; some have 3000 or more. According to Andy Laakman, who runs a company selling climbing gym software and talks to many gym owners, the average number of members is around 300 (source).

For a profitable gym, we need to find a population center where there are not already ten other climbing gyms. And we need enough middle and upper-middle-class individuals, usually between the age of 19-50, which are your typical clientele. They also need to live in a 20 minutes drive radius and should be scattered around that area without high points of concentration.

This makes it easier for one gym to bundle them and harder for the competition to open their gym. If the target demographic were bundled to one area and your gym is not directly located there, it might be easy for competition to open up shop in that area. They could easily steal the main business. Active member numbers break or make your business, as you will find out in the next section. It’s where we calculate how profitable climbing gyms are.

Calculating profitability – it all comes down to how many members your gym attracts.

With our estimations for the income mix and the average member counts, we can calculate our revenue. And we can then deduct the projected costs to see our profitability. We will also estimate when we are debt-free (remember, you need to invest around 200,000$ to 300,000$ upfront). With the calculation, we could also do further things such as liquidity estimation. We need a monthly fee for membership as estimation first.

Let’s assume 60$ per month for membership in our gym. That is a fairly average price for a monthly membership. Given that our hypothetical gym is not huge, but an exceptional rock climbing gym with proper walls and lots of routes, its totally justifiable.

I’ll assume memberships make up 50% of the income, which seems a reasonable value from experiences posted and gathered. We can use this percentage to calculate other income sources in our mix. Just multiply it by 2 (remember 2*50% = 100%). And if we assume a number for best, medium, and worse case active members, we can calculate the membership fees per month.

Worst case scenario: 100 members: You go bankrupt soon.

Let’s start, with the worst-case scenario. Our gym attracts 100 members who pay monthly subscriptions. Our monthly revenue from memberships is thus 100*60$=6,000$. Given that memberships make up around 50% of the income, we can assume that our total revenue is around 12,000$ per month. Sounds like a lot, but with 70,000$ monthly burn rate, you will go quickly out of business.

Break-even scenario: Ca 600 members + Side incomes all maxed out, or 1200 members and no other income sources.

I call this scenario “ramen-profitable”, which means you can pay the bills, pay your credit, and still have between 2000$-3000$ per month to buy some ramen and gas and not sleep inside your gym. You’ll need at least 58,000$ for it, which means 29,000$ (or 50%) should come from members and another 29,000$ from side income streams. You’ll need at least 483 members actively paying 60$ per month (83 x 60$ per month = 29,000$ per month) or around 900 if you don’t rely on the side income streams.

In this scenario, things take a turn for the better. If we can attract around 500 members and have decent other income sources like discussed above, we can break even and at least buy some ramen for ourselves. But you won’t become rich with this scenario, and it will take you four years to become debt-free. There’s also no real margin of error here, if your member numbers drop for some time you will suffer.

Good scenario: 1000+ Members with fully fledged side incomes or 2000 members without side incomes = 120,000$ revenue per month. After cost of 65,0000$ we still profit 55,000$.

Once you reach these numbers, your climbing gym rakes in a lot of money. After paying your cost, you still have around 65,000$ leftover in profits, which is a hefty profit. And at these numbers, you won’t have to worry about a slow month anymore, as you can easily put away some money to have a buffer. One thousand active members should definitely be our goal in terms of member numbers. Keep in mind, though our planned gym has a maximum capacity.

At some point, we will have too many people visiting it per day than the climbing walls can handle without having long lines. So if you keep growing, you will need to put away further liquid capital to be able to fund an expansion gym once you’re large enough. If you look at climbing gyms in business for 10 or more years, you will notice that there is a trend to expand to multiple locations. It’s typically a good sign and means the first gym was profitable enough to warrant an expansion. But that’s a different story, and for now, we can finish our analysis as this scenario means you’re profitable and things go well.

Conclusion

As you saw, opening a climbing gym costs a lot of money upfront, and the upkeep costs are not small as well. Thanks to the large real estate you need, rent will likely be well above 20,000$ per month at least in the U.S. Running a profitable climbing gym is not easy but hard, probably way harder and far costlier than most people think.

If you have access to a profitable and well-run gym should consider yourself lucky.
The best gyms are run by people who excel at both business and customer service skills, as you need to be top-level to be able to sustain a climbing gym profitably. And you’ll likely need to take out another mortgage on your house to open one!

I hope you found this article useful. I wanted to shed some light on why climbing gyms are charging 60$ or more per month for membership. The amount is substantially more than most normal fitness gyms, but as you can see, these fees are definitely warranted and required to make a gym profitable as a business.

Make sure to read on some of my other posts like “Could Alex Honnold have climbed back down?”, “How to train right for endurance in rock climbing”, and “How should climbing pants fit?“.