Replacing, updating, or improving your fitness amenity space is not an easy decision. It can be costly, and you may be questioning if there’s a suitable return on investment (ROI)? Here are a few questions to ask yourself about improving your property’s performance:
- What is the impact of not having state-of-the-art amenities in your community and in particular, an amenity fitness center?
- Is your property elevating the resident experience and thus optimizing loyalty to your property?
- What are your fitness center challenges — The product quality? The flooring? The equipment mix? Failing equipment? The space and its layout? Service vendor reliability? All the above?
In 2017 the National Apartment Association (NAA) reported that residents were most willing to pay a rent premium for fitness facilities over all other amenities between 2014 and 2017. That said, if your fitness center is not generating the community interest it deserves, it may be time for a fresh look.
First, the obvious, if your equipment is broken, decades old, or your fitness center looks like an antique store, it’s time to do something about it. People are not willing to pay premium prices for a community that has amenities they will not use, nor feel comfortable using.
If your fitness center is properly designed to meet your property’s demographics, is sized to handle peak workout hours, provides best-in-class equipment and free weights, and is activating the space with virtual and on-site training options, you are well on your way to improving property performance.
The Metrics to Drive Improvements
Most health clubs spend a set amount every year on repairs, updates, and additions to their facilities. The recommended annual budget for maintenance and repairs reported by the IHRSA is $4 per square foot. Additionally, every five years health clubs spend approximately 10% of their profits on customer-driven improvements. Finally, it is suggested that every decade they spend between 20% and 30% of revenue upgrading their clubs.
As a result, the recommended club budget over ten years for maintenance and replacements averages about 6% of annual revenue. Do you have an operating and capital budget in place for your fitness amenity? Do you know when the last time you had your eye on the latest fitness trends or updated solutions-Peloton? Aviron Interactive Rowers? High-Intensity Interval Training, or HIIT? Virtual Training with Wellbeats or other platforms? Space activation with TF Living (www.tfliving.com) or LIVunLtd. (www.livunltd.com)?
If you are unsure of the hard numbers behind your fitness amenity, you should work to create a spending plan around upkeep and updating your facility. Doing this will enable you to create a clear and actionable business plan. A clear spending plan will remove the guesswork around when to make key equipment purchases.
“Middle of the Road” Can Still Pull Premium Prices
If you are looking to attract higher-paying residents or transitioning to an upgraded property class, you may not need to spend a king’s ransom on upgrading the number one amenity, however, at a minimum, make sure your equipment is in proper working order and relatively in-line with fitness centers’ current standards. Even with “tier two” equipment, once you add a few bells and whistles, like open space for stretching, yoga and/or functional training, self-guided exercise equipment and a few virtual or in-person group training classes, your amenity offering will be right up there with the top of the Class A properties. By activating your facility — that is, getting residents/users so involved with the fitness center that they will think twice about leaving it behind — you boost your residents’ commitment and loyalty to your property. That’s a boost to retention, resulting in higher revenues. Any investment you make to activate your facility will generate a positive ROI. Do the math.
Consider hiring a consultant to periodically go through your fitness center space, challenge your company’s current thinking about how your fitness center fits into your overall property performance, and share the strategies with the most impact on enhancing your residents’ community experience. Full-service equipment dealers, like Heartline Fitness, offer this consulting service at no charge. They can also provide a safety and functionality assessment of your equipment, cardio and strength, with a report on the status of each machine and an estimate of when a unit will need to be replaced, for planning purposes. There usually is a charge for this, but that may be negotiable, depending on your overall plans for the facility.
In a nutshell, you should replace your equipment if it is severely outdated or broken — a major issue in many amenity fitness centers today is equipment downtime And work to activate the space to create stickiness with your residents! Be pro-active and give Heartline a call today for a free site assessment (see a sample report here).