Spotlight on Success

Four clubs that stood the test of time share their secrets for staying in business.

The majority of small businesses go under two years after opening. Most clubs qualify as small businesses, and they are no exception to this statistic.

For this reason, it's important for club operators to keep an open mind and search out for successful models to emulate. Often, operators can further their business education by looking at other clubs — even clubs in their own market.

While it's easy to be negative about your competition, it's not necessarily smart. Instead of dismissing other clubs, operators should examine successful businesses and their practices. Learn from competitors and study their plans.

While many new clubs do shut down, a select few stand tall and prosper. Chances are these clubs went into the business with practical plans and step-by-step goals. Or if they didn't, they learned from their shortcomings and changed for the better.

Club Industry's October cover story focused on the common business mistakes many clubs make. This month, we present the other half of the picture: what clubs do right. Specifically, we examine four clubs that have stood tall and prospered.

Running the gamut from large, high-end facilities to smaller businesses, from hospital-affiliated centers to women-only gyms, these four clubs have passed the test of time. All have been in the business for at least 18 years. One has even been around for more than a century.

In profiling these four clubs, we paid close attention to their business practices. In the end, we discovered that, while it is indeed easy to be negative, you'll be a lot more successful if you're positive.

New Orleans

Just the stats: Coed, 40,000-square-foot club with more than 2,300 members, this business was established in 1872. Monthly dues range from $54 to $59 for single adults.
Moral of the story: Community is key.

Situated in a city famous for jazz and blues music, as well as culinary and cultural delights, the New Orleans Athletic Club (NOAC) is a veritable grandfather of a health club. Established almost 130 years ago in the heart of the French Quarter, the NOAC resembles an old gentleman's eccentricities — decadence-meets-function as this three-level club winds around the many nooks and crannies of a Southern mansion.

Spacious, column-lined ballrooms are used for strength training and more than 50 group exercise classes, such as yoga, cycling and cardio kickboxing. Marble-lined pools and steam rooms delight and invigorate the senses. Barbershops and salons beautify, while rooftop jogging paths and squash courts nestle next to the sun decks. Members socialize in the card room or in the pub, or satisfy their hunger at the kitchen and restaurant. A little food for thought takes place at the club's on-site library, and some thoughts on food abound at the nutritionist's office.

For exercisers looking for a change of pace, the club features a boxing ring, indoor track, basketball and volleyball courts, and a weight-training museum where members can actually work out with weights from the John Sullivan-era (more “modern” weights are also available for those who like progress). At one point, the NOAC even featured a bowling alley.

The club, while the ultimate in architectural elegance at present, grew from much humbler roots. Founded in 1872, the club began with two gymnastic bars in the backyard of J.C. Aleix, who served as the club's first president.

Members paid dues of 50 cents to use the bars, hand-built from oak. Amenities consisted of a bucket of water and dipper — for an additional 35 cents.

By 1929, the club had shifted to its current location, but up until 1991, NOAC was very much a members-owned men's club. Women only started coming to the facility when member Bill More, a lawyer, bought NOAC from the rest of the members, numbering 300 men at the time.

The boy's club mentality is no longer present within the club's many rooms and catty-corners. With membership numbering more than 2,300 people, half of whom are women, NOAC has managed to keep long-time members happy while attracting new members with a delicate mix of tradition and trend. A veritable New Orleans institution, the club has weathered the test of time.

“I used to come here as a kid,” remembers NOAC General Manager Bill Johnston. “My high school wrestling team practiced here. It just had this aura and this reputation and this tradition.”

NOAC's reputation was the reason why Val Vogel joined the club 46 years ago. A champion handball player at the time, “I found out the good players were at the New Orleans Athletic Club,” he says. Still active, Vogel visits the club daily to do abdominal work, strength training, cycling, stretching, swimming and/or walking.

Vogel originally came to the NOAC because of its tradition, but he stayed because of its community. “I love the people of New Orleans, and this is a good bunch of those people,” he says.

The 71-year-old first settled in the Big Easy 50 years ago when he got out of the service and met a “New Orleans tomato.” Now the proud father of six children and grandfather to 15 more, Vogel continues to frequent the NOAC even though he has tried other clubs in the past (his HMO provides memberships at certain other clubs for free).

“This is not really convenient for me, but I love it,” he says.

While Vogel may have remained a consistent member for nearly five decades (the longest-term member has been with the club 67 years), the club itself has gone through many changes, and both good and bad times. Financially speaking, the New Orleans area “is not way up there on the economic ladder,” according to Johnston, so dues, while competitive to the market, are under-priced compared to many cities.

Still, making the switch to coed has helped the NOAC. After taking control of the club a decade ago, More charged a lower membership fee for women (still in effect today). In doing so, he attracted the gender into what was traditionally men-only territory. He also invested in club renovations that impressed more upscale corporate clients.

One thing More didn't change, however, was the club's variety. “It was just a well-rounded club,” Johnston says.

And it still is. Besides the usual fitness offerings, the club gives members “clubs within clubs.” There are card clubs, “early bird” clubs for morning exercisers, basketball clubs, handball clubs, billiards clubs and more.

All of the clubs build communities within the NOAC, and these communities, in turn, build up NOAC, making it an important part of members' lives. Just ask Vogel.

“This exercise club is part of my life community,” he says.

West Chester County, N.Y.

Just the stats: Club Fit's Jefferson Valley location was established in 1971. The Briarcliff location was established in 1985. Both clubs are coed, multipurpose facilities with 350 employees total. Club Fit Briarcliff is 100,000 square feet and has a membership base of 10,000 (dues are $102 per month). Jefferson Valley is expanding to 100,000 square feet with a membership base of 3,500 (dues are $93 per month).
Moral of the story: Don't shortchange on change.

To stay on top of the game, health clubs must be open to changes, sometimes even drastic ones. While a club's vision may remain constant, its parameters can't be set in stone.

New York's Club Fit underwent some tremendous changes since its inception. Originally a tennis club, the business charged members by the hour to use the courts.

President Beth Beck, who co-owns the club with David Swope, became involved with Club Fit in 1979. Despite a lack of experience in health club management (she was a tennis player at the club), she set out to turn around the ailing facility.

Beck decided to transform the business into a multipurpose club and set up a monthly dues system. “We were one of the first people in the early '80s to have [monthly dues],” she explains. “We felt it would be a much more even cash-flow process, and it also takes away the decision-making process of whether or not to join again.”

Over the years, the club has expanded. Club Fit Jefferson Valley's sister facility, Club Fit Briarcliff, opened in 1985. Both sites are constantly upgrading and renovating. Briarcliff had a recent $9 million “face lift,” while Jefferson Valley is currently in the process of an $8 million revamp.

“I think the clubs are a home away from home [for many members],” Beck says. “They want it to be comfortable and they want it to be updated.”

As it stands today, both sites offer a great deal of services to members. Jefferson Valley boasts indoor tennis, racquetball, an on-site nursery, physical therapy, a salon, café, massage center, wellness programming provided by the Hudson Valley Hospital Center, a group cycling studio and more.

When renovations are completed in the fall of 2002, Jefferson Valley will include a supervised play area for kids ages 5 to 12. Also in the works is an aquatic center with two pools, and revamped fitness and group exercise areas, including a women-only fitness area and new massage rooms.

Briarcliff, currently the larger of the two Club Fit facilities, offers much the same as Jefferson Valley, including hospital-affiliated and children's programming, café and massage.

Services and programs such as these, along with a dedication to renovation, put Club Fit ahead of the pack, according to Human Resource Director Mary Taglianetti, who has worked with the club for 15 years in various capacities. And her praise isn't just because she's an employee. Even during her early days as an exercise instructor — before she worked for Club Fit — she admired the company.

“Jefferson Valley was always the place I aspired to be,” Taglianetti says. “In our area Jefferson Valley was the place to be. They had the latest and greatest, and they were bigger than everybody.

“At the time there were no exercise programs in our industry. Jane Fonda was just starting. I ended up walking to Jefferson Valley and joined as a member because I thought that's how I could get in.”

Taglianetti attributes the club's longevity to the owners' treatment of staff (employee education is a priority) and “pioneering” business practices.

“They are always willing to go out there and try things,” she says. “The monies that are made in our clubs are dumped back into the club (for remodeling, etc.)…

“We're kind of like the first people to do things,” Taglianetti adds.

Missoula, Mont.

Just the stats: A 20,000-square-foot health club for women only, converted from a coed facility in 1983. Formerly Sparta Health Center, established in the mid-'70s. Current membership numbers 1,700 people. Dues run $44 a month, with this year's revenue estimated at $850,000.
Moral of the story: Niche is nice.

In an age where bigger is touted as better, where many businesses try to be everything to everyone, niche marketing can go a long way. Because niche marketing is not, in fact, for everyone, its uniqueness has appeal.

Case in point: the Women's Club. Originally a coed club established in the mid-'70s, the business switched to women only when Pat and Sandy Lawler bought the club in 1983.

This market switch has allowed the Lawlers to grow the business. Once a 13,000-square-foot facility, the Women's Club expanded an additional 7,000 square feet last year.

As the club has grown, it has faced off against stiff competition. Despite a large YMCA nearby, as well as four bigger for-profit clubs, the Women's Club is a thriving business with its eyes firmly on the future.

“We have as many or more members than those clubs do,” explains Camie Mueller, the general manager for the Women's Club.

Why has membership remained strong? “So much of it is atmosphere and energy and what we provide,” Mueller answers.

Furthermore, Mueller credits the club's success to its “air of community.” “We emphasize being open to everyone,” she says. “You don't have to be an athlete to be here. You don't have to be overweight.”

One member who appreciates the club's openness is Tara Stout, a 48-year-old who joined in 1986. “I think there is a big difference in a women's only club and an all-women club,” she says. “The Women's Club is for all women with all different kinds of needs and focuses. I have gone to other clubs with friends as a guest. I just feel like our facility has more to offer.”

Indeed, the Women's Club differentiates itself by recognizing women's time constraints and providing services that make life easier. For example, a seamstress comes in twice a week, and a nearby station will drop members off at the club, then give their cars an oil change while they exercise.

Naturally, the club also focuses on women's specific needs. It features a nutritionist, physical therapy, menopause support groups, specialty arthritis classes, prenatal exercise classes and a “Go-Go Girls” exercise program designed for women ages 60 to 90.

Members can take dancing lessons (salsa, swing, belly dancing, ballroom, cha cha or tap) and treat themselves to massage or day spa services. The club has also hosted “mini-retreats” for women, led by both a yoga instructor and a psychotherapist, in which the members were given the opportunity for reflection and self-renewal. One of the more successful programs at the club is a water exercise program that offers everything from aerobics and seniors programming to prenatal exercise and kickboxing.

“We've always tried to stay ahead of the game in the industry,” says Mueller. “We try to keep a pulse on trends nationwide as well as what people in the community want. That's a continuous thing. We are always planning ahead.”

Mueller herself is a big fan of the club — so much so she's been there 18 years. Starting off as a group exercise instructor, she progressed through the ranks to her current position.

Mueller's story is not unusual. Staff longevity is quite common, with the average staffer staying eight years. This is because the club has focused on team building for more than a decade, according to Mueller. The club operates as a community, with employees involved in decisions.

“The staff has a lot to say about how their job is performed because the staff know what the members want,” Mueller explains.

“People have ownership and they feel connected to [the club],” she adds.

This sense of ownership, in turn, influences the ways in which employees relate to the members. The atmosphere is one of comfort, friendship, community and a healthy lifestyle. According to Stout, it is the atmosphere that makes the club unique — a view shared by other members.

“We have a bulletin board in the locker rooms, and time and time again I see, ‘I love this place.’ ‘This is wonderful.’ ‘Thanks so much,’” Stout says.

“It's an atmosphere that is empowering and supportive of women.”

Dedham, Mass.

Just the stats: Established in 1977, Dedham Health and Athletic Complex is a 240,000-square-foot multipurpose athletic and wellness facility on a 7.5 acre property. The club claims 4,300 single adult members. An additional 1,600 members join Dedham's various summer programs, and 2,500 patients take part in the club's physical therapy programs. Dedham employs 97 staff members during the winter, and 130 during the summer months. Member fees start at $74 a month for an adult. Fees for summer memberships, family memberships, camp memberships and couple memberships vary.
Moral of the story: Be diverse.

While niche marketing has its place, mass appeal, when done properly, can also benefit a business. Clubs that wish to draw diverse members must offer diverse programs — from children's classes to rehab. On the other hand, clubs that become too specialized may find that their exclusivity severely limits their market.

Dedham Health and Athletic Complex knows all about overcoming limitations through diversification. An extremely large, multi-faceted club, Dedham originally grew out of a chain of tennis facilities that appealed to a limited number of people.

The tennis clubs, established in 1972, were “econo”-style facilities without employees. Members bought their court time up front for a year and used a key card system to get in and out of the facility.

By 1978, the business consisted of eight clubs, including Dedham Health, built in 1977. But change was needed, according to Lloyd Gainsboro, director of business development and owner.

“We decided we could do better with one club than eight,” he says.

By 1980, seven of the eight facilities were sold, and Dedham had been converted to a full-service club with monthly dues and staff. “In the '80s we decided we wanted to be a major club and that some day we would be involved in the medical world and that people would come to us for conditioning,” Gainsboro explains.

As part of its goal to become part of the medical community, Dedham brought an independent physical therapist on board in 1992. In exchange for working at the facility, she received a third ownership of the club.

“She was not part of a hospital system, but we did this because we wanted to some day be part of a hospital system,” Gainsboro says. By showing that it could provide physical therapy, Dedham hoped to prove its worth to potential hospital partners.

Dedham succeeded. Today, the club features on-site physical therapy with New England Baptist Bone and Joint Institute experts, diabetes programming courtesy of the Joslin Clinic, and both chiropractic and orthopedic medical staff and services.

Not that the club has limited itself to just medical partnerships. Besides attracting both rehab and medical patients, the club opened itself up to all kinds of members — the young and old, families, single adults and more.

“We're a very diverse club,” Gainsboro says. “We don't follow the normal pattern.”

As a sign of its diversity, Dedham Health is divided into four components: adult fitness/recreation, summer programs (including a water park with wave pool), medical programs, and kids' programs. In fact, the latter component is getting a boost with a current expansion. Dedham is constructing a separate area within the club that will offer kids' programming, medical services and exercise space. The youngsters will even get their own separate locker rooms and pool.

“We're going to have one of the first — that I know of — cardio centers for kids in the country,” Gainsboro says.

Kids aren't the only group getting attention at Dedham. The club has set a goal of reaching 8,000 single adult members (counting families as two adults) and growing total revenue to $11-$12 million within the next three to four years. To help make this happen, Dedham offers personal training free of charge. The logic is that this gratis service will improve retention, thereby bringing the club closer to its goal. “You can be on the right track, but if you don't move, you'll be run over,” Gainsboro explains.

Dedham also hopes to grow to 8,000 members by marketing the club to a broader audience. To promote the feeling that everyone is welcome within the facility, advertising is geared toward the 80 percent of people who don't exercise.

“The 20 percent that do will find us one way or another,” Gainsboro rationalizes. “Plus, I'm competing with other clubs for them.

“I am trying to get away from [advertising that says], ‘You can join us for nothing and there's a lot of spandex around.’ Our industry will never grow up if you do this.”

Recipes for Success

While clubs can achieve success through various means, we have found that the best clubs share certain traits. Here are some of the things that successful clubs have in common.

  • They set up monthly dues systems.

  • They recognize the importance of continuous change (e.g., expansions, renovations and upgrades).

  • They get involved in the community.

  • They have a hospital or medical affiliation.

  • They make money through alternate profit centers (e.g., day spas, juice bars, etc.).

  • They appreciate niche marketing.

  • They welcome members of all body types and ages (and reflect that in their advertising).

  • They encourage staff involvement, giving employees “ownership.”

  • They plan ahead.

Live Long and Prosper

How long has your club been in business? What's the secret to your success? We want to know. Write to us at: Letters to the Editor, Club Industry, One Plymouth Meeting, Suite 501, Plymouth Meeting, PA 19462. E-mail: [email protected]. Fax: (610) 238-0992.

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