Pandemic destabilizes the health club business
In these times of Covid-19 there is a risk that the closure of gyms could limit their contributions to the economy.
Santo Domingo, DR
Gyms generate jobs, pay taxes, train people, borrow money and even improve physical and mental health. Still, these businesses have not suffered the same fate as restaurants, hotels, or shopping malls due to the health crisis caused by the coronavirus.
When the fitness industry was booming in the Dominican Republic, and more people were motivated to improve their lifestyle, COVID-19 arrived, and the gyms had to close their doors, going from being a growing industry to an unstable business, both for their owners, workers, and clients.
Entrepreneurs in this industry have been on a seesaw as they have opened and closed their businesses several times during the emergency period. Many gyms had had to close for good, even when the pandemic was only a few months old.
In recent weeks, owners and representatives of formal gyms could not take it any longer and marched and complained until their wishes were orders. This January 26, they are back in business, but how much do these establishments contribute to the Dominican economy, and what are they losing?
Some clients have withdrawn their membership, leaving large losses of income to the gyms. One of these cases is that of the National Association of Gym Owners president, Amaury Morel, who states that his business has already had a decline of around one million pesos when he only has a total investment of five million.
He regrets that although the business is closed, he must continue to pay the loan he has and go to the place to clean the machines so that they are not damaged, in addition to the fact that his collaborators are not included in FASE.
“We stop generating income all these days that we are closed. We are on the verge of losing everything, although thank God, the government is going to take measures so that we can recover everything we have lost,” Morel commented.
“And what else do you invest in?” was one of the questions asked by this media to which Morel answered that he and his colleagues pay taxes when they import the machinery for the gyms, as well as the food supplements. He believes that his investment is relatively small since businesses have invested up to RD$15 million.
However, the General Directorate of Internal Taxes (DGII) establishes that health services, including gyms, are exempt from paying ITBIS.
Fitness specialist, Juan Carlos Vargas, regrets that the Government is announcing “from one day to the next” the gyms’ closing. However, he already sees hope with their reopening this Wednesday. Every time these establishments stop operating, they lose more clients because the message sent to the people is that they are not COVID-19 safe places.
Vargas, who belongs to the Dominican Business Association of Gyms, Wellness, and Sports, estimates that this sector provides about 25,000 formal jobs.
Despite the closing of the gyms, their responsibilities and contributions to the Treasury did not cease.
The expenses incurred by these businesses are the fixed power of electricity, internet, water, TV cable, the energy of the common areas, labor liabilities, bank loans, and telephone.
The gyms must pay taxes to the Dominican Society of Phonographic Producers for music use, to the General Society of Dominican Authors, Composers, and Publishers of Music, among others.