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10 Exciting New Revenue Streams for Health Clubs

“Ancillary revenue.” It’s not a particularly exciting term, but if you’re a health club owner, just the thought of it can raise your heart rate well beyond your training zone.

And for good reason:

“Generally speaking, ancillary services account for a quarter of a club’s total revenues,” said Melissa Rodriguez, IHRSA’s senior research manager. “So operators need to be creative in terms of coming up with new nondues revenue services, and getting members—and nonmembers—to make use of them.”

It’s not a new notion for IHRSA clubs, and, especially in recent years, a fair number have been using them quite successfully. “Many have managed to boost their profitability to pre-recession levels—or even higher—by tapping nondues revenue sources.”

What have they been up to? Club Business International checked in with a host of operators, consultants, and industry suppliers to find out.

NO. 1: A Boutique Within a Club

For an extra $40 a month, a member of GymIt, a high-volume/low-price (HV/LP) bran with two locations in the Boston area, can train like a professional boxer inside a state-of-the-art BOXFIIT modular classroom.

The studio and associated programming are the creation of EveryBodyFights (EBF), a high-end boxing business cofounded by George Foreman III, son of the two-time world heavy-weight boxing champion.

The turnkey EBF studio comes equipped with bags and special lighting and décor, and the classes incorporate patented BOXFIIT techniques developed by Foreman. Clubs pay a monthly licensing fee for EBF, and instructors are BOXFIIT-certified. Certification costs $400, and includes continuing education credits and access to a library of more than 50 hours of video demonstrating 100 custom workouts and 200 boxing moves.

“The BOXFIIT curriculum was designed for members of both genders and of all ages and fitness levels,” said Ben Eld, EBF’s marketing manager. The program, he says, tends to attract individuals 22 to 38 years old, who earn $75,000 to $250,000 a year, and 60% of them are women.

Matthew Harrington, the president of GymIt, explained, “We wanted a way to differentiate ourselves from other low-cost clubs, and to offer a boutique fitness experience at a much more affordable price.”

GymIt offers approximately 30 EBF sessions per week. Members and nonmembers can take classes for $20 each or $140 for 10; members also can pay $40 for an unlimited monthly pass. “We reached 200 members on the monthly add-on pretty quickly following the launch,” said Harrington, “so we’ve seen a pretty significant increase in our nondues revenue.”

NO. 2: Obstacle Course in the Sky

The Dedham Health & Athletic Complex (DHAC), in Dedham, MA, has embarked on a program to provide a very special fitness experience for its younger members.

Recently, the club installed a 32-foot-tall, Level 1 Sky Trail Navigator structure on its property.

The unique unit, which is basically a high-rise obstacle course, was manufactured by Ropes Courses, Inc., of Allegan, MI, which offers a large suite of similar courses. Each one is a breathtaking maze of poles, balance beams, rope bridges, platforms, and, in some cases, zip lines. Users, who are referred to as “adventurers,” are outfitted with a full- body harness and redundant sling lines so they can maneuver the course safely.

“We always try to be different,” said Lloyd Gainsboro, the director of DHAC. “We’re probably one of the first health clubs to have this sort of ropes course, and we made sure to install it in time for our summer clubs and tennis camps, which are important sources of ancillary revenue for us.” DHAC also plans to rent out the ropes course for birthday parties and special events.

NO. 3: New From VivaFit—Personal20

Pedro and Constance Ruiz, the cofounders of VivaFit, a global women-only fitness franchise based in Portugal, have devised a new way for clubs to add to their ancillary revenue.

Working with Alexandre Lourenço, the cofounder of Body Concept, also a Portugal-based franchise, they’ve introduced Personal20, a licensed program that’s based on electric muscle stimulation (EMS). The approach makes use of wearable EMS technology, which causes deep muscle fibers to contract some 36,000 times per minute; the process is monitored by a skilled personal trainer.

The 20-minute workout, it’s claimed, delivers the same benefits as a traditional 90-minute exercise session.

“Our vision is to offer a premium, branded boutique experience that combines wellness and fitness. It represents a great micro-business opportunity for club owners,” Constance said.

Continue reading “10 Exciting New Revenue Streams for Health Clubs” in the August issue of CBI.

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