Making fitness a profitable exercise

As communities emerge from Covid-19 lockdowns, those in the health and fitness sector are arguing for a more holistic approach to wellness.  

Notably, the UK government is promising to build back healthier, with a Queen’s speech commitment to work on improving the general health of a nation whose level of obesity has been seen as a contributor to greater numbers of Covid-19 casualties. Even prime minister Boris Johnson, having recovered from Covid-19, was stung into a weight loss and fitness campaign, stung by the news that his excess weight had put him in greater danger.  

Hotel operators, fresh from a pandemic drive to seek ancillary income streams, may now be eyeing wellness with fresh eyes – and wondering how they can make more of the renewed focus on fitness.  

At the same time – and somewhat in common with conferencing and events – they will be wondering how best to finesse a combination between in-room gathering, and virtual presentations. During European lockdowns, millions have taken yoga and fitness classes from home, tutored via YouTube, while home fitness brand Peleton has delivered thousands of its static bicycles to spare rooms across the land.  

Gerald Vernon-Jackson, chair of the Local Government Association’s Culture, Tourism and Sport Board, said: “The public leisure sector has a critical role to play in helping our communities recover from Covid-19, both physically and mentally, and build resilience to future viruses and issues like obesity, heart diseases, and diabetes. Sufficient investment is needed now to ensure NHS capacity is not taken up by preventable diseases as we recover from delays to other treatments caused by Covid-19.” 

For some hotels, a third-party partnership may be the way to go. London fitness group Gymbox has its eye on the potential to work with hotels, partnering with the St Martin’s Lane hotel, where one of its venues in the UK capital is located. In January 2021, the group announced a partnership with CitizenM. The arrangement provides CitizenM guests with access to a suite of pre-recorded in-room sessions, from the fitness company’s Out The Box platform, developed during 2020.   

Among mainstream fitness companies, all seem keen to get customers back to in-room training. In the UK, the country’s largest chain PureGym reopened its 230 premises in England in April, along with 10 new sites that were already in development. The company issued a promise to continue growing, noting in a statement: “This expansion comes at a time when many leisure and retail businesses are shrinking their estates, especially on the high street. We have ambitions to further increase our gym estate across the UK and have an important role to play in sustaining vibrant high streets as they adapt to new uses.” 

Also keen to grow is rival The Gym Group, where CEO Richard Darwin stated earlier this year: “We are seeing a very good property market for us to take advantage of – quite a number of these sites are on retail parks, where we are seeing really good levels of availability.” 

“These are very good sites for us in terms of locating a gym, because you get parking, you get flexibility and great signage, and as a result of that we plan to take advantage of what is clearly a difficult market for retailers.” 

While the virtual world suited the confines of lockdowns, a Gymbox spokesman told Hotel Analyst that is not the way they think, going forward: “Real will always be the focus for gym goers as they crave real life experiences which is what Gymbox does best. We see digital as a bolt-on, as people will be in the office less, so we include free digital workouts that can be done 24/7 from anywhere as part of their membership.” 

The brand is likely to feature within hotels more in the future: “We see physical workouts as a real opportunity and we are working with hotel chains to put on once-off events in addition to digital fitness. Things we are looking at are sunrise yoga sessions on rooftops, as well as an evening HIIT workout accompanied with a DJ followed by drinks.” 

Roger Allen, CEO of consultancy RLA Global, specialises in advising hotel sector clients on wellness and leisure facilities. He has seen a rise in investor interest across the health and wellness space, even as far as medical health retreats, recently advising on a project with an oncology unit.  

“We’ve seen huge changes in tech and guided wellness,” and lockdown-inspired online solutions “have bridged the gap beautifully.”  

Allen warns of the need to really understand the guest and their requirements – simply adopting wellness is not a panacea. “Owners have to make a decision – do they co-operate with a third party, or create something that is identifiably theirs?” For those considering the investment, he warned: “It’s really important for investors to understand what they expect from wellness. It can’t be a bit part play.”  

In the UK, the leading combined hotel and fitness operation is Village Hotels, owned by private equity investor KSL. The company, which has 32 properties, just acquired the former Hilton in Bracknell for GBP17.5m, to add to its portfolio. The group is seeking a further 20 hotels over the next four years, preferring a combined format of around 150 hotel rooms, a licensed bar, restaurant, gym with pool, 250 space car park, business club space and room for a Starbucks coffee shop.  

Village CEO Gary Davis, told Hotel Analyst: “You simply won’t find another lifestyle hotel brand like us. We rival the best fitness operators, and each hotel has around 3,500 local members with our gyms and pools are fully available to our guests, offering state of the art equipment, large pool and a range of classes, spin, yoga, HIT and many others.” The company has recently rebranded its offer from Village Gym to Village Health and Wellness, indicating a broader health and wellbeing focus that has also influenced the group’s restaurant and bar menus. 

The company is also linking its co-working space with gyms under a combined subscription: “With Platinum membership, members are able to access both our coworking space and leisure facilities and we’ve seen a huge appetite for it since reopening. It’s simple really – we’re helping members create a lifestyle that works for them, juggling demands of a busy working day with a bit of ‘me time’, and creating the foundations for a much better work-life balance.”   

HA Perspective [by Chris Bown]: So is the wellness drive an opportunity for hotels? Sure it is. Just as the dark kitchen model allows hotels to sweat their catering assets, so a move into more external fitness – as opposed to just for hotel guests – could also improve returns.  

Should they follow the path of Village, and invest directly in fitness clubs within the premises? Probably not, unless the landlord is prepared to dig deep, and wait to see the return. But, as their operation shows, the benefits of the subscription income streams, plus cross selling to f&b, are significant. 

But what about a more asset light approach? It seems clear that those in the business reckon their customer base mostly wants a return to group, in-room fitness experiences; perhaps combined with some form of streamed instruction or guidance.  

Teaming up with a fitness brand, as CitizenM has done, could be a sensible move. Start to use underutilised meeting rooms for fitness classes – popping out yoga mats and exercise balls, instead of round tables and conference chairs. Hire in a freelance personal trainer, and off you go. Arrange timings pre-lunch, and retirees attending a fitness class could well stay and buy lunch at the hotel, too.  

Let’s take the events/fitness comparison a little further. What the sector really needs, is a tech player to come up with a dual solution to make selling, managing and running fitness and conferencing on the same platform. Both look likely to need a seamless streaming solution, combined with in-room action – and both could probably be using some of the same in-hotel spaces.  

Additional comment [by Andrew Sangster]: If there were a market to benefit from Covid, it is surely gyms. With obesity second-only to age as a factor raising the probability of hospitalisation following an infection, people are all too aware of the need to get fit. 

In addition to this demand booster, supply is also set to be easier. Gyms are a good prospect for problematic retail conversion. Already, 9% of gyms in the UK are located in shopping centres, according to a report put together by Colliers a couple of years ago (Health and fitness review 2019). And there now looks like being a perfect storm of more space available and landlords keen to generate footfall. 

The UK’s biggest gym brand PureGym passed the one million members mark in 2017. Such economy players have strong parallels with the hotel economy sector, conquering the market by offering a transparent and perceived value-for-money offer. And as with the branded budget hotels, the new breed of budget gym operator has squeezed the mid-market. 

The other thing to note about the gym market is that virtual classes are a poor substitute for the real thing. Gyms are about the immersive experience of enjoying a class or workout session as part of a community, not simply the transactional relationship of getting sweaty. That human connection is much harder online.  

Please log in for access

Thanks for subscribing!

An email confirmation will be sent to your registered email address with a link for you to click on to confirm this request is genuine.  Please note that no newsletters will be sent to you until the request is confirmed.  If you do not receive the link, please check your junk folder or else contact NewsTeam@Clanalytix.com.

This website uses cookies to ensure our visitors get the best user experience and to analyse site traffic.  To continue browsing our site, please confirm your acceptance of our Privacy Policy and use of cookies.