published in sb 3/2018
Author Dr Stefan Kannewischer, Kannewischer Management AG
The fitness and spa industry continues to grow. This is why many public swimming pools have tried adding fitness and spa activities as side-line business to boost profitability. This is not advisable in all cases and is not always successful either. Under what circumstances does it makes sense to integrate fitness and spa activities in public pools? Bathing and sauna are always to be regarded as the core business. In other words, whatever is done as a side-line must be beneficial to the main business of bathing and sauna.
Characteristics of the activities
Users purchase admission to the pool/sauna individually for each visit. In the spa and wellness section, the services are purchased individually, while in the fitness section the vast majority of users take out membership for several months at a time.
In the pool/sauna area, each employee is responsible for several hundred users, with a ratio of, say, 1:200. In the spa section, each user is treated individually in the cubicle by an employee. In the fitness area, this can vary. In the initial advisory conversation with a service employee, the ratio is 1:1, in a course 20 members are served by a course trainer, and when using training equipment the member exercises largely without supervision.
Interaction and communication with users therefore varies to a large extent. While communication only takes place sporadically in the pool/sauna section (except at the cash desk), communication in the wellness zone is highly important. The task of the wellness employee is to nurture and pamper users and perhaps also promote processes of healing. In the fitness zone, the employee’s job is to encourage members to adopt a healthy life-style. He/she has to instruct the member and keep his/her spirits up so that working out is fun.
The types of business are therefore different. In the pool/sauna area, it is mainly infrastructure business. In the two other areas, spa and fitness, it is mainly people business. It is essential that pool operators bear this in mind. It simply isn’t enough to create attractive wellness areas or purchase the latest fitness equipment. Competent and motivated employees are also required along with an effective service strategy. The product is not a facility (hardware), but a service (software).
The profitability of the three areas also varies a great deal. The profitability of competition pools tends to be very low of course, while that of fun pools can be very high. All the same, the biggest sales are usually achieved in the pool/sauna section as the core business. Owing to the 1:1 employee/user ratio, the spa section has very poor chances of breaking even. In the fitness area, the commercial possibilities as a side-line activity will be somewhere in the middle. However, if it is not run appropriately, profitability can be very low.
o determine the benefit of adding a spa or fitness zone, it is first of all important to be aware of how the existing pool is classified. Is the pool
• purely a competition pool,
• purely a fun pool,
• a leisure facility with a mixture of the above two pool types,
• a thermal pool
• or another form of combined pool facility?
At single-activity municipal indoor competition pools, it may make sense to add a fitness zone as an additional opportunity for dry training. But it will hardly make sense providing a spa zone as well.
At a leisure facility, it depends a little on the precise nature of the facility, but it may well be advisable to add spa and fitness zones.
At an out-and-out water park or fun pool, it makes little sense to add spa or fitness zones. Purely fun pools appeal particularly to teenagers and older children. However, if this is an adventure pool or water park that also meets the need for recuperation (which means it is no longer purely a fun pool), it may be worthwhile adding a spa section.
For the thermal pool, which is geared to recuperation, wellness and health, a spa zone is a must. For some users, it can even make all the difference if they can obtain a massage or other spa treatment during their stay at a thermal pool. The inclusion of a fitness area can also be beneficial alongside the main pool business and thus be a welcome addition.
The next step involves investigating feasibility in the context of a business plan. The following issues have to be covered as part of a feasibility study:
• Market potential
• Competitor analysis
• Project positioning
• Activities provided
• Allocation of rooms and spaces
• Estimated investment cost
• Profitability forecast
Factors for success
If the feasibility study for a fitness or spa zone yields a positive outcome, the next step is to embark on the concrete design of the zone. The most important factor for the success of such a zone is, firstly, its appeal. This means:
• Design and ambiance
• Hardware and software of offered activities
• User routing
• Employee skills
The employee skills cover the following:
• Professional skills: initial and further training
• Social skills
• Service quality: friendly, obliging, dependable
When it comes to the specific factors for the success of spa and wellness zones, it is important to bear in mind that the employee/user ratio of 1:1 is an obstacle to large profits. The key to profitability in the treatment area is therapist workload. In addition, the organisation of bookings and reservations also has to be considered. Assigning staff to this activity is only worthwhile in a large wellness section, so online booking must also be made possible. If the section is not large enough, it will be unable to fund this overhead expense. In a small wellness section it is therefore advisable to have reservations made by therapists themselves alongside their main job.
Now to the factors specific to the success of fitness areas. One often sees small, unstaffed fitness zones in hotels and at indoor pools. The demand for them, however, is extremely low. As already mentioned, fitness is “people business”. Employees motivating and also instructing users play a key role in the provision of fitness as a service. However, to finance such employees, you need a critical mass to ensure that revenue exceeds cost. If this is not achieved in the forecast, it is better to drop the idea.
The fitness industry is highly competitive and smaller, independent studios are having an increasingly hard time. The decisive argument in favour of a fitness club attached to a pool is the pool itself. It is essential to capitalise on this synergy and also stress it in communication with the market.
Fitness is a very local business with a catchment range of 20 minutes maximum. Customer satisfaction and the resultant member loyalty call for maximum attention, particularly in weaker catchment areas. The membership fee scale must include attractive packages inclusive of access to the pool. In addition, membership fees must rise over the years, and suitable mechanisms must be provided for this.
Finally, fitness business is very fast-moving, and you always have to keep up with the latest trends. At the moment, the emphasis is on the fusion of the concepts of fitness, nutrition and wellbeing. Also growing in importance are solo exercising using one’s own bodyweight and fully electronic, Internet-based equipment.
It may make sense to integrate a fitness or spa zone at a swimming pool, but a spa zone only makes sense as an addition to a wellness-oriented pool (because the chances of making a profit are non-existent or only minimal), and a fitness zone only makes sense in the event of synergies in user needs.
It is important to appreciate that
• fitness and spa activities are “people business” (software rather than hardware) and
• fitness is membership business.
In connection with the model described here, fitness and spa activities are only side-line activities backing up the main business of swimming.