Hotels Enhance Their Fitness Centers to Appeal to Travelers - Part 1 of 2

by Pamela Kufahl (Editor-in-Chief, Club Industry)

Business travelers now place a greater importance on fitness, moving all segments of the hospitality business to re-evaluate their fitness offerings.

Once banished to basements, hotel fitness centers are now getting more attention from hotel operators who realize fitness has become more important to travelers. The shift could provide new sales opportunities for manufacturers and partnership possibilities for club operators.

Return on Investment

Although some hotels do charge for the use of the fitness centre, many do not. The 2012 AHLA study found that 25 per cent of hotels charge, down from 41 per cent in 2004. Luxury hotels are most likely to offer free use of the fitness centres (93 per cent in 2012 compared to 92 per cent in 2004) while that number steadily declines with each price segment, ending with just 24 per cent of budget clubs offering free use of the fitness centre, compared to 26 per cent in 2004.

Because few hospitality fitness centres provide a direct financial reward, the return on investment can be intangible, measured solely by scores on guest satisfaction surveys.

"Sometimes the return on investment is that if you don't have it, you won't get the customers so you have to have it, but you can't put a number to that," McInerney says. "You can’t say that I got another 20 people because I had the fitness centre."

However, Clyde Guinn, president of Days Inn, part of the Wyndham Hotel Group, says one of the main ways to measure return is through the STAR Report, developed by Smith Travel Research. Most U.S. hotels participate in the STAR Report, which collects all the occupancy and average rate data for the majority of North American hotels. Smith Travel Research puts each hotel in a competitor set, which is a group of at least five competitors in that hotel's tier level and neighbourhood. The participating hotels can then compare their performance to that of their competitive set on a weekly and monthly basis. Guinn says that through this report, operators can determine if adding a fitness centre translates to higher occupancy rates than competitors without fitness centres.

However, the more immediate indicator of a return on this investment comes from feedback online, particularly through Trip Advisor, Guinn says. Days Inn’s first statistics from its Trip Advisor scores (which allow ratings from 1.0 on the low end to 5.0 on the high end) showed that the difference in revenue per available room for a hotel that rated a 4.0 vs. a 3.0 was $10 more per day per room, Guinn says. For a 100-room hotel with 36,500 available room nights per year, that equates to an additional $365,000 per year in revenue.

"That is a difference in every room you have available in a year regardless of whether you sold it or not," Guinn says. "That difference is almost pure profit."

Guinn says he is convinced that his brand’s DayFit program will help Days Inn franchisees improve their rankings and increase their revenue.

"You can monetize this," Guinn says. "I am extremely confident that it will result in a better market share for our brand and a better financial situation for our owners."

Hotels Follow Clubs

Despite the greater focus on fitness in the hospitality business, the industry has room for growth in this area. Muller says that some hotels still shop by price point, but as the world continues to become more social and mobile, hotels will look for partners to provide content that offers guests a unique, entertaining and engaging experience. To do so, hotels will need to know their guests, how they like to exercise and their motivations for exercising.

"Understanding what motivates them to move to help personalize the experience is probably the most critical thing in the future for the properties," Muller says.

As the equipment at more commercial clubs become networked, hotels will feel the pressure to offer the same, says David Diehl, global hospitality sales manager for Precor, because people will expect more from their equipment, including the ability to track their progress. This movement means opportunities for creative marketing and loyalty programs, which could turn hospitality fitness centres into revenue generators. These types of marketing opportunities are already being used in commercial clubs.

"I think the club industry is setting the pace for the hotel industry because club members are the heart of the traveling sector," Amador says. "And they are becoming more knowledgeable, and they are driving a lot of the decisions that we are making in the hotels these days because it is a very educated clientele."

Equipment quality, environmental quality, and the cleanliness and condition of the facility drive successful clubs and will drive successful hotel fitness centres, Amador says.

"People have come to realize that travel may not be the healthiest thing to do," Amador says.

"People are looking for healthy travel, and I think hotels have positioned themselves to accommodate that need. They have to."

Taking Measurements

Other hotel chains also began responding to these survey insights, moving their fitness centres out of converted former conference rooms to more prominent locations. At least one hotel group, InterContinental Hotels Group (IHG), Denham, UK, which operates nine brands, has announced a wellness hotel brand called EVEN Hotels.

Since 2004, the number of hotels that offer a fitness option has grown, according to the American Hotel and Lodging Association’s (AHLA) 2012 Lodging Survey of 12,000 hotels. In 2012, 84 per cent of hotels at all levels offered a fitness centre, up from 63 per cent in 2004.

Ninety-nine per cent of luxury hotels offered a fitness centre in 2012 compared to 92 per cent in 2004, and 99 per cent of upper upscale hotels had an exercise room or fitness centre in 2012 compared to 95 per cent in 2004.

Ninety-eight per cent of upscale hotels had a fitness centre or exercise room in 2012 compared to 95 per cent in 2004. Almost as high were the upper midscale chains with 96 per cent in 2012. The 2004 survey did not include this category.

Eighty-three per cent of midscale chains had exercise rooms or fitness centres in 2012, an increase from 2004 when the midscale hotels were broken out by those with food and beverage (72 per cent had a fitness option) and those without (78 per cent had a fitness option).

In the economy market, 46 per cent offered a fitness centre or room in 2012, an increase from 2004 when 29 per cent offered the same.

Despite these numbers, Joe McInerney, president and CEO of AHLA, says that the importance of hospitality fitness centres often depends on the hotel’s location. Hotels on an interstate highway typically attract travellers who are just passing through and are less interested in working out. However, hotels in cities—even economy hotels—typically attract more multi-night business travellers who are more focused on fitness.

For hotels with a large contingent of business travellers, competition can be fierce, so meeting expectations is key.

"Everything now for the hospitality industry is about the guest experience," says Kent Collins, director of global national accounts at Life Fitness, Schiller Park, IL. "Everything they are trying to do is enhance that guest experience. The fitness centre is no different from any other common area in their facility."

Hotel operators also know that guests expect more of their hotel’s fitness centre today, Sullivan says.

"They are expecting the same if not better workout experience than they have at their local gym,” she says.

The growing importance of the fitness centre can be seen in the fact that they are no longer relegated to the basement. Sullivan’s department works with every Hilton Worldwide property globally to assist them with building out the space, advising them to seek premium space on upper levels.

Luxury hotels often had a good mix of equipment, but now, more mid-priced hotels are adding a better mix of equipment that includes balance along with cardio and strength equipment, according to Steve Suchanek, director of product management at Cybex International, Medway, MA. Cardio still takes up the majority of space in most hotel fitness centres, he adds.

The importance of cardio means that the options on cardio are becoming more vital, including entertainment options and technology that allows users to track their workouts. Tracking has become easier with the networked fitness options on the latest generation of most cardio equipment.

Because fitness offerings are more important to the hospitality market, that market has become more attractive to vendors. Even though most hospitality growth is occurring in Asia Pacific where Collins estimates two hotels open every day, the U.S. hotel market also remains attractive. In 2011, the United States had 51,214 hospitality properties, according to AHLA. Those properties refresh their equipment every four to six years, Collins says.

Beyond that, inclusion in a hotel fitness centre is good advertising for vendors.

"Consider the fact that hotels are like show rooms for us," says Jay Muller, area sales developer–hospitality for Technogym, Cesena, Italy. Guests use that vendor’s equipment for the length of their stay, which equals brand exposure that could translate to an equipment sale.