ROI in hotel fitness centers can be hard to quantify, so instead it’s about looking at other metrics, such as guest satisfaction.
REPORT FROM THE U.S.—When it comes to return on investment from hotel fitness centers, it’s not so much about revenue generated as it is about going above and beyond guests’ expectations, sources said.
“One of the goals is to always try to exceed expectations for guests and it is an expectation that there will be a workout facility on the property,” said Steven Wallace, GM of Best Western Plus Boulder Inn in Boulder, Colorado. “I guess the answer is, if we did not have it … what would be the loss in revenue to the bottom line?”
What to invest in
Start with the basics, said Larry Trabulsi, SVP at asset management company CHMWarnick. And don’t hesitate to bring in partners or vendors to help better understand your property’s equipment needs, he added.
“It’s not just us (asset managers) saying what we think and hotel managers saying what you need … in some cases it’s just the vendors themselves,” he said.
Currently, he said that cardio equipment still is very relevant within the gym space.
Adam Sydenham, regional GM of Luxe Hotels, said Luxe Rodeo Drive Hotel in Beverly Hills, California, has elevated the traditional hotel gym experience by offering an indoor-outdoor fitness center with its Rooftop 360 concept, but still provides the basics.
“Each person’s workout preferences are different, so when determining what equipment to add to Rooftop 360, the property first focused on the basics; cardio machines and free weights,” he said. “Given the views and the peaceful nature of the space, we also decided to include yoga mats for meditation.”
Integrating technology also is a critical move, Trabulsi said, and it’s almost a must at this point. For instance, he said, individual, high-quality TVs on each piece of equipment is important.
“Being able to get away with fuzzy screens isn’t acceptable anymore. People expect TVs and monitors to work—and work clearly,” he said. “What we are seeing more of is online and on-demand types of workouts as well, so again integrating that IT into the workout piece.”
Trabulsi added that when deciding what should be included in the fitness center, it also depends on what market you’re in and making “sure you’re at minimum keeping up with the Joneses from a competitive perspective.”
“If you’re in an urban market with a lot of new supply, having a fitness center that is going to stand out a little bit is going to be important when customers are coming through the market (and) they have new choices of where to stay,” he said.
Don’t be afraid of partnerships
Never underestimate the benefit of partnerships, Sydenham said, especially if a property has limited space.
While Luxe Rodeo Drive Hotel does not offer specialized fitness classes, Sydenham said the property partnered with nearby fitness studios in order to give guests the option of private rooftop sessions, and he hopes to add additional partnerships later in the year.
And although Best Western Plus Boulder Inn does have a gym on site, the 99-room hotel takes advantage of its local Colorado Athletic Club to ensure that guests have the option to experience more than what is offered in the hotel’s gym.
“If there’s something they (guests) feel they don’t have, that they would have at a full-service health club, I want to make sure that they have the option to experience that,” Wallace said. “The Colorado Athletic Club has all sorts of amenities that would not be practical for a property our size. There are day passes that we offer that are one-third the normal walk-in discounted price.”
For the Houstonian Hotel in Houston, Texas, which does not have a gym inside the hotel, it benefits from The Houstonian Club—a full-service health and fitness club—that is right next door.
Guests of the Houstonian Hotel gain access to the private 175,000 square-foot Houstonian Club with the cost of their stay. Cher Harris, assistant GM of the Houstonian Club, said the gym doesn’t see it as a burden on membership to have hotel guests use the facility, as they typically are only there for a week at a time at the most.
And while the two properties are separate businesses, they operate very much together on the “campus,” Harris said, which in return generates business on both ends.
“We advertise different events at the hotel, different staycations for our members and so then that brings business to the hotel. I think having a club of our size and caliber is a huge benefit to the hotel guests who are booking, who are fit and looking to work out,” Harris said.
Leasing versus buying
Another aspect properties need to think about with ROI in fitness centers is whether to lease or buy equipment, Trabulsi said.
He said while he sees different strategies at different properties, it depends on the owner. “If you’ve got the capital and you’re willing to cycle capital every three to five years, that’s one thing … you have to look at each one and vary based on what happens at the end of each contract in terms of if the equipment has any value or not.”
Wallace said Boulder Inn purchases its equipment because it’s in the financial position to do so, and it makes the process more efficient.
“It was much more time-consuming to do leasing than just to buy it,” he said. “The guest expectations are what’s going to determine what we’re going to do in the future. If there’s something that becomes popular to the point at which guests are expecting to see it and will use it, we’ll get it. We’re not interested in getting equipment that the guests aren’t going to want to use.”
Err on the side of caution with expansion
When it comes to taking hotel guestrooms out of traditional service to convert them to fitness space, Trabulsi said that can be tough, because rooms are where the value is in a hotel.
He said he’s looked into some markets that are taking away guestrooms in order to make room for more fitness space, especially in properties that are receiving negative feedback for their fitness centers being undersized. And it’s a challenge in urban areas, as construction costs continue to increase and “you really have to maximize every square footage,” he said.
“A lot of it comes down to the owner’s desires as well, and (for) some of our owners, there’s a sense of pride in having a great fitness center and that factors into the decision along with the economic decision,” he said.