Laura,
My daughter just turned 18 in December. Right before her birthday she got a letter from our Health Club/Gym that she could no longer be on our plan because she is 18 but she could procure her own membership and get a student rate of $50-something per month. But she doesn't work out consistently, in fact, she will go weeks and months without a workout so that money would be a waste.
However, the other day, she wanted to work out and couldn't go to our club but a friend of hers belongs to some gym 10 minutes from our house that only costs $10 per month. Yes, it is smaller, doesn't have all the bells and whistles that my club does, but that is a huge price difference.
This fitness center she went to the other day is one of many smaller, much, much cheaper centers opening up in our area that are a fraction of the cost so for my daughter it is a no-brainer.
And for anyone else in this bad economy - $10 a month is a small fee to pay for a fully equipped center. Even the Y can't compete with that cost.
So I think it is those two things, the economy and the smaller, cheaper fitness centers that are driving people away from your larger gyms.
As for me, I'm not working out at home or the gym. I just cannot find the motivation these days.