Hotel operators are finding new ways to generate additional revenues. Some sell fitness club memberships; others provide short-term meeting room, guestroom and parking rentals.
Hotels typically generate revenues from a limited pool of sources: guestrooms, food and beverage, banquets and catering and gift shops are the most common. Today, some hotel operators have uncovered new avenues of revenue generation, including fitness club memberships, short-term guestroom and meeting room rentals and parking space rentals to non-guests.
Some resorts with golf courses and tennis courts sell memberships to local residents to increase usage of the facilities, but now a few transient hotels with large and well-equipped fitness facilities are able to market their services to local residents.
California-based Leisure Sports takes the concept a step further. The company operates a chain of seven fitness clubs, including two connected to Renaissance ClubSport hotels in California.
“We don’t even consider the fitness club and the hotel to be separate entities, as each contributes about half of the total property’s revenues,” said Brian Amador, VP of hotel operations at Leisure Sports. “In fact, we market ourselves as who we are—not a hotel with a health club or a health club with a hotel. We are the combination of the two and are actually a fitness resort.”
The two hotels—in Walnut Creek and Aliso Viejo—each have 175 rooms, while the attached health clubs each have about 85,000 square feet of fitness, spa and swimming facilities. Amador said about 2,000 people typically visit each club each day.
“Many of our guests choose our hotels because of the access they get to health clubs that are in many cases very similar to the high-end clubs they experience at home, which enables them to participate in their workouts much as they do at home,” Amador said, adding that guests can participate in group fitness activities—everything from exercise classes to pickup basketball games—that aren’t typically available in most hotels with fitness facilities.
“Also, our guests and club members can continue to enjoy their healthy lifestyles, from a workout in the club to food and beverage choices in the hotel that are specifically geared toward living healthy,” Amador said.
He said each hotel/club combination operates with one set of operating executives: a single general manager and directors of sales, engineering, accounting and more. Staff members at times work both sides of the operation.
“This synergy allows for a tremendous amount of operational efficiencies that cascade throughout the facility,” he said. “While housekeeping in the evening is typically focused on the health club, those housekeepers are also available to work at the hotel should we, for example, need to turn over a guestroom very quickly.”
Because of the cross-training and dual-purpose management, Amador said the major operational challenge is finding managers and staff members who can work in both environments.
“In order to be successful, we need to tap into a very specific talent pool since it’s not common to find a person who is equally a hotel leader, a health club leader and a lifestyle leader,” he said. “As a result, we focus heavily on succession planning so we can bring future managers up through the ranks.”
An urban example
The Fairmont Pittsburgh has a similar but more modest combined hotel/fitness club operation. The six-year-old, 185-room hotel has a 6,000-square-foot health club and spa that’s open to both hotel guests and local residents on a membership basis.
“There are some other fitness facilities downtown, but our health club has been a real differentiator for the hotel,” said GM Matthew Sterne. “When the hotel was built, the vision was that the club would be an important amenity for our guests and it has proven to be the reason why many people stay with us.”
Sterne said initial success of the club spurred a renovation in 2013 that included the addition of three spa treatment rooms and expanded manicure/pedicure stations. The result has been a tripling of health club revenues in the past three years, he said.
Some hotel operators have figured out they have empty spaces in their properties that can be rented on a short-term basis as a way to generate ancillary revenues. Several operators leverage third-party website systems to sell unused meeting space, guestrooms and parking spaces.