Challenging Times Ahead for Corporate Fitness Centers !

With the advent of low cost operators, 24 hour fitness centers, Boutique clubs and the plethora of online fitness options can your work-site Fitness Center survive?

2 C words and an often used F word could be the answer!

Mike James a 40 year Veteran of the Corporate Fitness Industry reports

Corporate Fitness Centers, just like their customers, come in many shapes and sizes. From a small room with a treadmill, maybe a few scattered dumbbells, with showers for joggers and bike riders to the medium sized facility with a wider range of equipment and exercise options, right up to very large operations like at the World Bank with 3 fully equipped Fitness Centers and a 70 class per week Group Exercise Program, Corporate Fitness Centers have become an integral part of the work place.

The 2 key selling points for companies to spend $$ on Corporate Fitness Programs usually focus on producing healthier, fitter employees, leading to 1) increased productivity and 2) decreased absenteeism.    

However today with fiscal tightening these altruistic benefits are quickly forgotten by the omnipresent band of flinty eyed accountants looking to justify each and every square foot of corporate overhead.

Today  with justifying the dollars spent as the main focus the raison’detre for Corporations spending money on in house fitness facilities shifts to 2 C words; cost and convenience.

By providing convenient in house facilities you are saving the member and the company the time and effort it takes to exercise at another facility at a considerably lower monthly membership than at a commercial Fitness Center.

For many years this was true. At the World Bank Fitness Centers from 1993 -2001, over 4800 members had access to state of the art exercise equipment and a 60 class per week Group Exercise Program for the princely sum of $10 per month.  At that time monthly membership dues at similarly equipped Commercial facilities ranged anywhere from $30-$90.00 per month

However times have changed especially in the fitness industry.  Let’s look at how not only Fiscal tightening but also vastly different market conditions have affected Corporate Fitness Centers.

Cost

The monthly subscription for Corporate Fitness Centers has steadily risen since the early 2000’s.  Today Corporate Fitness Centers at places like the World Bank and International Monetary Fund Fitness Centers in Washington DC the cost is now $35.00 per month.   This is still great value for money at both facilities.  But with the advent of low cost operators like Planet Fitness at $10.00 per month and round the clock 24 operators like Xsport Fitness and 24 hour fitness offering huge facilities and Group exercise programs at approximately $40-45 per month the cost factor becomes less relevant. Similarly many community centers, and YMCA facilities now have equipment and services that rival commercial operations at low individual and family membership rates

Convenience

It is definitely convenient to have a fully equipped fitness center where you work.  It is even more convenient to have a fitness center where you live. Today’s new condo developments often include Fitness Centers with exercise facilities. Condo Fitness Centers may vary in size and what they offer but most are a far cry from years past when a typical Condo Fitness center was a token effort with maybe a treadmill and stepper in a poorly ventilated room tucked downstairs somewhere near the community wash room. Today many condos, especially in new developments offer regular Group exercise classes, meditation rooms and commercial quality cardio and strength training equipment.

Another huge change in the Fitness Industry has been the growth of boutique Brand clubs, like” 9 round Boxing”,” Club Pilates”, “Barre”, “Soul Cycle” and “Orange Theory”.  No longer does a member have to wait for their once or twice per week boxing, Pilates or Spin class.  With a boutique club they can take the class of their choice almost any day and time of the week.  While the cost of these clubs is not cheap at approximately $70.00 per month, there now appears to be less market resistance to paying dollars for fitness Classes. Many members are now prepared to pay extra $ for this convenience.

There has also been a significant increase in home based exercise options with programs like “Peloton” and “Beachbody” that offer live streaming classes.

All of these factors have diluted the convenience and cost factor that encourage employees to join their onsite fitness Centers. At the World Bank Fitness Centers the total membership is still a very respectable 3300 but a far cry from the days of 4800 members when the cost was $10.00 per month.

So unfortunately this enables Poindexter and his band of flinty eyed bean counters to sharpen their pencils and be even more vigilant in their cost cutting efforts.  And perhaps the Poindexter’s and his crew have a valid point.

 Why should a company spend money on an in-house exercise space if only a handful of employees actually use it?  At the end of the day it’s about” backsides on seats”,” use it or lose it” or any other cliché that is apt in preventing your onsite Corporate Fitness Center from going out of existence.

2 C words and an F bomb can save the day

“The big thing I learned that I kept with me for my entire career is the fitness business is a hospitality business—bottom line. Unless and until people understand that, they really haven't entered the high road of the business. (John McCarthy IHRSA President, CBI magazine, Oct 7, 2014)

By acknowledging that Fitness is a hospitality business Corporate Fitness Centers can enhance the first of the C words.

 Community

By creating a community within a Corporation and doing all the things a good hospitality business does, like remembering names and providing great service and product you will go a long way to creating value in the Corporation which simply is not found in most commercial Fitness operations.

This ties into our second C word

Continuing education

For employees at Corporate Fitness Centers creating a culture of lifelong learning and support of educational initiatives will ensure the staffs stay current and provide members with the best facilities and services possible. This creates a culture where employees are appreciated, valued and made to feel part of something worthwhile. As Sir Richard Branson, founder of the “Virgin group says “If you look after your staff well, they will look after your customers.”

Which leads us to perhaps the most important reason for joining a fitness center it involves an oft used F WORD?

The F word!

And that word is Fun!

How do you create a fun atmosphere?  It starts from the moment a member enters the doors.

By providing a friendly stress free experience members will view the Fitness center as an oasis far removed from the pressures of their work day.

The Future -Be gone Poindexter !!

Yes it is a challenging time for Corporate Fitness Centers.  Today there are definitely cheaper and even more convenient exercise options but by providing a community feel with great camaraderie and a fun experience by continually educating staff to provide topnotch service the Corporate Fitness Center model can still survive and thrive even with Poindexter and his band of flinty eyed bean counters lurking in the shadows!!