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

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

Part 2:

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

Operation Plans

Even with the growing emphasis on providing higher quality fitness centers, few hotel operators have the expertise to manage the larger centers that need oversight. Some hotel operators have turned to management companies or even commercial clubs, McInerney says. Other hotels partner with health clubs to place a club inside their hotel walls.

None of the U.S.-located IHG brands have third parties manage their gyms, the company says. However, in certain markets and where appropriate, IHG has partner gyms. For example, the company’s Crowne Plaza Times Square hotel partners with New York Sports Clubs, which is located inside the hotel.

Management at Hilton brands varies. Some manage their own fitness centers while others use third-party management, Sullivan says. Hotels with commercial clubs in close proximity may have an agreement allowing guests to use the commercial club.

In 2010, Core Performance, Phoenix, began designing workout programs for Sheraton Hotels & Resorts Worldwide, which invested $120 million in rolling out the program that also includes healthier food options in hotels and room service menus, in-room workouts and healthy snacks.

Exhale, New York, operates its clubs in several hotels. The Sports Club/LA has agreements with The Ritz-Carlton Boston and Washington and several Four Seasons hotels.

Return on Investment

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

Because few hospitality fitness centers 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 center.”

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 neighborhood. 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 center translates to higher occupancy rates than competitors without fitness centers.

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 centers 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 centers, 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.”