How do club owners decide whether they should renovate their clubs and what amount of renovation they should do? Most clubs can benefit by a renovation. Yet, is the cost justifiable, many club owners ask? Also, what should be done, and how much should be spent to significantly affect sales, retention and profits?
Let’s look at two club case studies with different levels of renovations. One club is QLS Family Fitness, a 60,000-square-foot, family-oriented club in Humble, TX, and the other is 34,000-square-foot Gold’s Gym in Long Island, NY. Both clubs had been open a number of years and were successful, so why did club owners decide to renovate?
QLS had a 120,000-square-foot competitor opening two miles down the road. Some people told owner Kyle Bauer that his great service would be enough to compete with the new club. They told him that rather than renovating his club now, he should wait and see what happened. However, after talking with people who had actual experience in such matters, he realized that being proactive rather than reactive was the best choice.
Although in good condition, Bauer’s club was not ready for a much larger, state-of-the-art competitor. His plan was to renovate his club into a beautiful, upscale environment and to add new mind/body studios, a cardio cinema and separate pool locker rooms for a new outdoor pool. Although his competitor would always be much bigger, his strategy was to make his club an exceptional visual experience for anyone who came through the doors. However, he wanted to do so as frugally as possible by using money-saving techniques and spending where it would make the most dramatic impact without the dramatic costs.
Bauer completed the first phase of his renovation just as his competitor opened. The competitor’s impact on his business was minimal, but once Bauer saw the competitor’s club, he realized that had he not made such changes, he would have taken a big hit.
Although not facing any new major competitor and maintaining a membership that seemed happy with the facility, Gus Orlando, owner of the Gold’s Gym on Long Island, knew his club needed a change. His immaculately clean facility was clearly outdated, and he knew that sooner or later, this would become a major competitive weakness. Orlando decided that being proactive would solidify his presence in the marketplace, and he determined that the renovations to his club should be substantial so that people would begin talking about his club again.
The results? Orlando completed his renovation just as the economy started to go bad, yet his sales have increased substantially, his retention is up, and the one-day sales numbers at his re-grand opening were “unbelievable,” he said. Making the changes brought in new member numbers that he said he may never see again in his club.
Whether trying to get new members or keeping old members, the right dynamic change can be the most significant move a club owner can make to better compete and substantially increase sales. Waiting to renovate can cause sales and profits to dwindle, making renovation even more difficult. The good news is that changes can be made cost effectively, resulting in an entirely new energy and environmental psychology. Simply put, as both owners discovered, a well-thought-out renovation can be one of the best long-term marketing investments a club owner can make.
Bruce Carter is the president of Optimal Fitness Design Systems International, a club design firm that has created about $420 million worth of clubs in 45 states and 26 countries. He can be reached at 954-888-5960 or [email protected].