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On-site gyms can pose threat to membership

In the late 1990s and early 2000s it was not uncommon to see a company shower its employees with perks.

Both start-ups and ones entrenched in its sector, like EMC outside of Boston, Google and Facebook in Silicon Valley, and AOL in Northern Virginia, often had pool tables and foosball games at the office, as well fitness centers down the hall for a nice convenience at work.

Then the financial downturn of the mid-2000s saw some of the costlier extras fall by the wayside – whether it was gyms not in new construction’s blueprints, or a company couldn’t afford to support the superfluous.

Now, according to American Fitness, a supplier of home and commercial fitness equipment, there is an uptick in reinvesting in on-site gyms.


The affects are indisputable. According to different studies, compiled on Tri Health Corporate Health’s website, numerous companies have seen impressive ROI for on-site fitness and corporate wellness programs:

  • Dupont reduced absenteeism by 47.5 percent over six years for employees;
  • Steelcase conducted a study showing 55 percent lower medical claims costs for corporate fitness program participants than non-participants over a six-year period;
  • Blue Cross Blue Shield of Indiana found that its corporate fitness program had a 250 percent return on investment. That's $2.51 for every $1 invested over a five-year period;
  • At Union Pacific Railroad, 80 percent of employees reported that their exercise program was helping them become more productive at work.

Steven Hill at Easton Gym Co. in Hollywood, Calif., said the trend of on-site gyms hasn’t hit his company’s area with force. However he certainly agreed with the positive affects of going to the gym. 

“I haven’t seen it but I know it is going on,” said Hill. “It’s a great idea: a healthier workforce, less time off for sick days and better production.” 

A look around major metropolitan areas like Los Angeles, New York, Chicago and Boston show that the trend may be increasing but it is spotty enough that it isn’t affecting membership at nearby clubs.

“There are not companies in downtown Boston, or at least near (us) that choose to build their own on-site health club, said Ken Yanofsky, president of Fitness International. “Since rent is so prohibitive around here, companies seem to choose to corporate memberships at nearby clubs.” 

Another area that is prohibitive is Manahattan. Jennifer Vaughan Maanavi, CEO and founder of Physique 57 on West 57th Street, had another idea as to why she hasn’t heard of any talk of on-site gyms being an issue in the Big Apple.

“There are gyms all over Manhattan. Most times a company will extend a discount to a gym for their employees),” said Maanavi. “We have a lot of corporate discounts, like NBC and Google.”

Grabbing the company before it grabs you seems to be a common theme. Instead of losing members at your club to their place of employment’s gym, get the company to offer discounts to your club instead. Then the company won’t have a reason to build, or designate an area, for ellipticals, treadmills and weights.

Rich Neher, general manager at Toluca Lake Tennis Club and Sports Center in Burbank, Calif., said his club entices companies by inviting them to a week of events, parties, goodies and offers in order to show them what they have to offer. 

He recollected that the only business that fit the description of an on-site fitness center is Warner Bros., which has been around for a long time. He did say that they can’t accommodate all the employees and some have come to him to get their fitness fix.

“I hear companies like Facebook and Google have very lavish arrangements for their employees. In the Los Angeles and Burbank area we don’t have those kinds of businesses. They have high overheads so often they shy away from going the extra mile for their employees.” 

Bob Good, membership manager at Onterie Fitness Center in Chicago, has had to endure a double-whammy. He said not only is the on-site clubs making a comeback in the Windy City but new condo construction is offering fitness centers and pools are perks.

“We’ve had to change gears, and part of the reason is not just because of corporate facilities (but also) a lot of condo complexes are building bigger and bigger fitness centers. They are not manned … and don’t offer classes, but it is tougher to compete. 

He has had to think outside the box in order to make up for losses in the number of people walking through the door.

He said he is currently renting out his pool – during off-hours so to not disrupt paying members – to two groups. That extra $1,500 a month covers his locker room supplies; and he charges instructors to host Jazzercise, with the extra couple hundred dollars countering his towels line item.

“I have to be creative,” said Good, who is fortunate to have Northwestern University Hospital as corporate members. “The more I rent (out our space) the less I depend on other memberships.”

Hill wondered why they wat to tread on their turf anyway. 

“It is so expensive for (a company) to provide a gym for all its employees. Why would they want to be in gym biz?,” Hill said. “In my opinion it is easier and less expensive to pay for a membership (at a gym). 

“Why take on the liability and responsibility of taking on and running a gym?”

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