Club Insider

COVID-19: The Re-Opening

Key Information From The Industry's Front Lines

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OpenThose who have fought say, "War is hell." Every day is a struggle. Those countless days end up in new battles. Every battle can have a decided effect on the outcome of the war. The seemingly endless cycle continues. But, one day, there is a breakthrough, and it leads to victory.

Make no mistake about it. The COVID-19 Pandemic is war. But, unlike previous wars, it is not with a people, a country or an ideology. In this case, it is against something insidious, a virus unlike anything seen in over a century. And, in that, more so than in our lifetime, the world is together in terms of hope and determination to overcome an enemy.

At local levels, though, the tactics are different, but the goal is the same. Within the overall theater of this war, because of the nature of the enemy, life must go on. It won't go on normally, but it must go on. And, the key to that is the information needed to keep people safe.

Previously, in our May Edition, we reported on the Re-Opening plans of clubs across the country, but those were just plans... In most cases, a plan becomes past tense on Day One, and constant adaptation is required. However, this month, we bring you something more concrete, key information from the industry's front lines!

We hope you find value from these kind contributors who want to see this industry survive and thrive. And, as our readers, you need to know that Club Insider will continue to report until and beyond the breakthrough to ABSOLUTE VICTORY is found. I welcome and encourage you to read on.

ACAC Fitness Centers

Phil WendelPhil Wendel

Phil Wendel, Owner

We have 12 clubs in three states (Virginia, Maryland and Pennsylvania): 7 are larger flagships, 4 are express and one is a kid's campus. As of July 1st, all are now reopened.

Membership Accounts: On March 10th, Pre-COVID, we had 33,700 membership accounts (individuals, couples and families). On July 1st, we had 26,000 membership accounts (60% of the 7,000 lost are on freeze. Cancels are up 20%, but the real issue is the lack of the ability to sell memberships; sales through July are down 50%.).

Attendance Year Over Year: In Week 1 of re-opening, we were seeing about 21% of what we saw in 2019 (attendance); in Week 2 of reopening, we were seeing about 25% attendance (compared to same day in 2019); in Week 3, we were seeing about 33% of what we saw same date in 2019; now, in Week 4, we hit 36%.

Revenue: We'll hit about 50% of what we had in July of 2019. Historically, our revenue mix is 65% membership and 35% non-dues. Our non-dues revenue has taken the biggest hit.

Personal Training: We were on pace in early March to have $10,000,000 in personal training revenue in 2020. Some trainers want to come back, but their clients don't; some clients want to come back, but their trainers don't. Put simply, our 2020 revenue for Personal Training is a huge unknown.

Youth Programming: Summer camps, pre-school and swim lessons are coming back at a faster pace than our members, but we're still running only at 60% of what we did in 2019.

Fixed Costs: Most of us in the industry have large fixed costs; ours are $30,000 per day (without payroll) and consist of rent, debt service, utilities, taxes and others.

Outcome: Our Balance Sheet was in pretty solid condition in early March, so we will get through this.


Cincinnati Sports Club

Mary Frank, Sales and Marketing Manager

Key Statistical Measures
2020 compared to 2019

  • Total Revenue: 85% of 2019
  • Total Paying Members: 80%
  • New Member Sales (#s): 77% (We only sold memberships from June 15 to June 30 in 2020)
  • Member Cancellations (#s): 22% fewer in 2020 than in 2019.
  • Total Check-Ins (#s): 65%
  • Total Non-Dues Revenue: 80%
  • EBITDA: 65 - 70% (estimated) of previous year. The company is striving to restore 85 - 90% of commission and bonus pay for all staff.
  • Total # On Freeze (As % of Members on March 15, 2020): 20%. Freeze members continue to pay monthly dues of approximately 10 - 20% of dues.

Other Key Info

  • List of Current Restrictions (% of Capacity, No Childcare/Summer Camps, Small Group Exercise, Lockers/Sauna/Steam, Spa/Massage, Food & Beverage, Social Space, Basketball, Other): The Governor of Ohio has issued mandatory and advisory guidelines for various business sectors. Due to the size of the Cincinnati Sports Club, we have to adhere to 12 business sectors guidelines, exceeding 40 pages. The restrictions affect the spacing, density, disinfecting and staffing for the various venues of the club.
  • Key Surprises (Positives/Negatives): 1. Our customer service scores were 50% higher when we were shut down than when we have been re-opened. 2. Very few people will allow facts, data or science to change their personal views or emotions.
  • Key Recommendations to Other Clubs: The news cycle will continue to be negative through November and possibly beyond. Clubs should proactively develop and implement a plan to present a positive and empowering message to its members to counteract the national media's doomsday message. It is possible to be COVID-safe and stay active.
  • Any commentary you'd like to provide on any of these subjects (Freeze Group, Cleaning Protocols, Reservation App, Who Is Cancelling, Estimated Dates of Full Facility Use, Timing of Full Marketing Launch, Staffing Issues, COVID Member/Staff Positive Testing & Steps, Preparation For Surge #2): The CDC, due to the early South Korean case studies on gyms, have a skewed bias against health clubs, which has been adopted by some Governors, Mayors and health officials. It is great to see IHRSA and Medallia present data to counteract these biases. We believe the South Korean case studies can be easily explained by the high density and limited spacing of members.

Club Greenwood

Paula NeubertPaula Neubert

Paula Neubert, President/General Manager

Key Statistical Measures
2020 compared to 2019

  • Total Paying Members: This is for memberships, not members: 3,067 (June 2020) vs. 3,726 (June 2019).
  • New Member Sales (#s): 90 (June 2020) vs. 71 (June 2019). A very nice surprise...
  • Member Cancellations (#s): 143 (June 2020) vs. 54 (June 2019). Not a surprise, but still disappointing.
  • Total Check-Ins (#s): 16,170 (from June 9 - June 30, 2020) vs. 37,624 (June 2019). We opened at 48% of normal check-ins and have hit 60%+ as we continue to increase daily.
  • Total # On Freeze (As % of Members On March 15, 2020): We currently have 61 memberships on the extended 60-day High Risk Hold, and we currently have 62 memberships on Medical Freeze.

Other Key Info

  • List of Current Restrictions: We opened at 25% of capacity per room, allowing for six-foot physical distancing in each room. We have been able to move to 50% capacity per room allowing for six-foot physical distancing. This only changed the weight room and indoor pool. Since, we have left the weight room as is to better monitor members but did increase the indoor pool. Summer Camp opened the day before the club opened at a maximum of 50 campers. We have been full each week. Kids' Club and the Youth Activity Club have been open since day one (June 9) with limited capacity. Group Fitness has been offered since we opened with limited capacity, 30 minutes between classes, instructors in face shields, by reservation only and decreased total number of classes. Lockers and showers are open with physical distancing requirements (locked lockers, sticks at vanities, no amenities). No steam or dry sauna, but whirlpools are open with limited capacity. Spa is open. Food and beverage are open for takeout. No seating or social gathering allowed. Basketball and organized sports are available with capacity and restrictions.
  • Key Surprises (Positives/Negatives): Positive: the total number of sales we had in June. Great month, far exceeding our goal, and it beat the previous year. It seems to be carrying over to July as well. Negative: the number of cancels that continue to come in. We felt we weathered the storm during the shutdown, but resigns continue to come in after opening. Since July is our first full month of billing since March, hopefully, this is the final big month of resigns.
  • Key Recommendations to Other Clubs: Be flexible and patient. Know things are changing daily. Admit this is unchartered territory for everyone, and we are trying our best to do right by members while protecting our business. Remind local and State health officials of the positive role we play in keeping the community healthy and remind them that we are part of the solution, not part of the problem.
  • Any commentary you'd like to provide: We are continuing with our enhanced disinfecting procedures and are concentrating more on appropriate ventilation and air filtration. It's surprising to see our cancels are not in one age category or another. The percentages by age group are pretty consistent to pre-COVID. Thankfully, we were able to keep all 240 staff members on payroll while we were shutdown, so they were all eagerly waiting to get back to work. The biggest issue is the added staff we have had to bring on board to monitor capacity restrictions. This is increasing our overall payroll expense while we are not bringing in the same amount of revenue.

Gainesville Health & Fitness

Joe CirulliJoe Cirulli

Joe Cirulli, Founder/CEO

Key Statistical Measures
2020 compared to 2019

  • Member Cancellations (#s): +5%

Other Key Info

  • List of Current Restrictions: No capacity issues. Basketball games not allowed.
  • Key Surprises (Positives/Negatives): Positive: the number of members who continued to pay during the shutdown. Negative: the massive fear.
  • Key Recommendations to Other Clubs: Keep the facilities clean and sanitized all day long. Enforce social distancing.
  • Any commentary you'd like to provide: Members who are terrified to come back are mainly the older members and those who are compromised in any way.

Saco Sport & Fitness

Scott and Beth GillespieScott and Beth Gillespie

Scott and Beth Gillespie, Owners

Key Statistical Measures
2020 compared to 2019 (% change)

Note: Only open 2 weeks and owed members 1/2 month's dues billed in March.

  • Total Revenue: -69%
  • Total Paying Members: -2.3%
  • New Member Sales (#s): -4.8%
  • Member Cancellations (#s): +66%
  • Total Check-Ins (#s): -78%
  • Total Non-Dues Revenue: -57%
  • Total # On Freeze (As % of Members on March 15, 2020): 12.75%

Other Key Info

  • List of Current Restrictions: Only Open 2 weeks in June. No Kids Club, No Pool, No sauna, No Jacuzzi. Capacity limited to only 50 people (in all clubs over 10,000 square feet); we are 25,000. Social Distancing or 14' with "Intense exercising/heavy Breathing."
  • Key Surprises (Positives/Negatives): Positives: Most member's compliance and appreciation for the work we did to reopen safely. The higher than expected volume of Seniors still coming back, craving social and healthy movement community. Negative: The "Mask Issue" - With proper education, coaching and follow up, most members are okay with it.
  • Key Recommendations to Other Clubs: Safety, Safety, Safety. Air Quality, Hand Sanitation, Physical Distancing, Equipment Sanitation, Staff Training to teach, coach, and guide members to comply in a friendly manner.
  • Any commentary you'd like to provide: There are challenges getting back Trainers and Instructors. Maine has the strictest regulations yet at 14' social distancing and a max capacity at 50 people, which for Saco is at 18% state capacity and 25% of our parking capacity. When our State's opening date was pushed back from 6/1 to "TBD," we formed a coalition of Maine clubs and hired a lobbyist to fight to get us open. It worked, and we were open in two weeks. Without that effort, I believe we'd still be closed. The Maine Governor and the CDC Director have said publicly many times versions of "Gym's aren't safe!" This has all been based on the South Korea Zumba Studio study. It has done irreparable harm to our industry in Maine. We have some massive PR ahead of us to regain safety credibility.

Stone Creek Club & Spa

Larry ConnerLarry Conner

Larry Conner, General Manager
Marvin Gresse, Assistant GM

Key Statistical Measures
2020 compared to 2019

  • Total Revenue: 85% of 2019
  • Total Paying Members: 91%
  • New Member Sales (#s): 117%
  • Member Cancellations (#s): 121%
  • Total Check-Ins (#s): 86%
  • Total Non-Dues Revenue: 84%
  • EBITDA: Loss for 2020
  • Total # On Freeze (As % of Members on March 15, 2020): 15%

Other Key Info

Marvin GresseMarvin Gresse

  • List of Current Restrictions: Louisiana is currently in Phase 2 of reopening, which limits our building capacity and studios to roughly 50% of normal capacity. There are guidelines for proper spacing of Food & Beverage tables and seating in the club, as well as social distancing with minimum spacing of at least six feet for equipment and group fitness studios. The pool deck is also limited to 50% capacity. Wet areas in the locker rooms are open, and each is limited to 50% of capacity. We have signs and space decals in place to remind members of the restrictions in these areas. Childcare is operating at 50% capacity, and we have implemented a call-in reservation system for those spaces available. Basketball is limited to half court, as we have used the other half to space out fitness equipment. We strictly enforce individual basketball shooting only, and no contact among those making the shots. This has been a point of emphasis for the State Health Department and Fire Marshall.
  • Key Surprises: The unknowns and having the ability to adapt to them quickly as they come. You will have to adhere to new government regulations and emergency orders, evolving information and guidance from health officials, as well as questions and concerns from members, staff and the community you serve. There is no manual for operating in a pandemic; you will have to digest the information and make the adjustments and realignment of your organization in a timely and accurate manner. Rely on your experience, mission of your club, your team and lean on your industry peers and fellow industry professionals for support and resources.
  • Key Recommendations to Other Clubs:

    Be Present! - Encourage your management team to be on the floor to assist and work with your team. Interact with members and employees to answer their questions and instill confidence in the protocols and procedures you have enacted to keep everyone safe and healthy.

    Be active and vocal with your state, local, and national elected officials - These government officials can help or hurt your reopening and future operations. Give them the information they need to make the correct decisions when it comes to the health and fitness industry. Show them the necessary and essential function you perform for your community and how much your members depend on the club for their health and wellness needs. Exercise is Medicine! And, it leads to a bolstered immune system and overall health to deter and combat the virus. Forge that relationship with officials in your area now! And, show them how you operate safely.

    Support the ILC wing of IHRSA - They are the industry voice and lead on the Federal level and who needs to help shine the light on our industry and show how we can operate in a safe and responsible manner for our members.
  • Any commentary you'd like to provide: We are working with the group of members that are currently on Freeze, and we are being flexible as they are comfortable to return. We are keeping them updated with the current programs and services that are happening at the club. We also give them the information that shows we are cleaning and disinfecting, as well as all of the enhanced protocols in relation to safeguarding the club against COVID-19. We have extensive signage for entry and procedures of members and staff, new hospital grade disinfectants, hydrostatic sprayers, wipes and hand sanitizer throughout the club. We are showing pictures of all of this to them in emails and social media posts, and we created several videos that we sent to members, especially those on Freeze. We also have our management team contacting anyone on Freeze with whom they have a personal relationship with to answer any questions they may have and to just check in with them. We are also looking at doing a featured Guest Day for those on Freeze to come back and experience the club for a day. We are watching the possibility of a future surge, and of course, we are hoping it does not come. But, hope is not a plan: Being prepared for it and ready to handle it will set us up to work the best for our team, members and community overall. We learned a great deal when we were forced to close in March. We will use that knowledge and lessons learned in the event another closure comes in the future.

VillaSport

Laurie SmithLaurie Smith

Laurie Smith, Senior Vice President

Providing data for four clubs that were open in June 2019 and also were reopened in June 2020 for the majority of the month (CO, TX, OR).

Key Statistical Measures
2020 compared to 2019 (% change)

  • Total Revenue: -64%
  • Total Paying Members: -34%
  • New Member Sales (#s): -16%
  • Member Cancellations (#s): +41%
  • Total Check-Ins (#s): -68%
  • Total Non-Dues Revenue: -58%
  • Total # On Freeze (As % of Members on March 15, 2020): 17%

Other Key Info

  • List of Current Restrictions: Texas Clubs: 50% capacity; Colorado Springs, CO: 25% capacity or up to 50 patrons per room, whichever is less; Beaverton, OR: capacity set to accommodate 6' distancing throughout club, no indoor or outdoor pools, no childcare; Roseville, CA: capacity set to accommodate 6' distancing throughout club, no whilrpools, saunas or steam rooms; and San Jose, CA: Will reopen on July 13, awaiting final guidance from State/county.
  • Key Surprises (Positives/Negatives): Positive: How effectively our home office team has been able to work and collaborate remotely (since March 13). Negative: The sometimes unclear and/or contradictory reopening guidelines or restrictions issued by state or local governments. The extremely short notice typically given by state or local governments for closing, reopening or changing a safety protocol. How much the reopening guidelines and timelines differed between states and between counties in a state. How politically charged the issue of wearing or not wearing masks became.
  • Key Recommendations to Other Clubs: No silos; staffing models during this time need to be lean and flexible, with people cross-trained and able to help and cover in a variety of departments. Ensure all employees take the safety protocols and precautions seriously and follow them, every day, every hour; we need to keep our teams safe and prevent a domino effect if one person tests positive for COVID-19. Decide up front how strict you will be with enforcing member protocols, and then, stay consistent. Visible cleaning and disinfecting by everyone on the team throughout the day and throughout the club; demonstrate to members how serious you are about maintaining a clean and safe environment. Form alliances with other club operators, for advocacy efforts in your state or community and for sharing best practices, information, etc.
  • Any commentary you'd like to provide:

    Positive COVID-19 Tests: Recommended steps to follow if anyone is notified that a member or employee has tested positive for COVID-19, immediately do the following:

    1. Consult with public health authorities for then-current guidance at the time of the incident.
    2. Review the situation (viewing security camera footage as applicable) and speak with the individual to see if he/she came within six feet of anyone for at least 15 minutes while at the club any time from 48 hours before illness onset to the time he/she began isolation. This corresponds to the CDC's definition of a close contact.
    3. Confirm the individual has reported his/her positive test to the public health department, which will then reach out and help them recall everyone with whom they had close contact during the timeframe while they may have been infectious and then begin contact tracing by warning any exposed individuals (contacts) of their potential exposure as rapidly and sensitively as possible.
    4. Although close contacts will likely be contacted by public health staff, the club may also endeavor to reach out to any member or employee who meets the criteria of a close contact.

• • •

Continuing through these unprecedented times, I want to thank Joe Cirulli, Larry Conner, Laurie Smith, Marvin Gresse, Mary Frank, Paula Neubert, Phil Wendel, and Scott and Beth Gillespie, who took time out of their busy schedules, literally keeping their businesses alive, and their staff and members safe, to contribute to this article. They have shared sensitive information. They have shared lessons they have learned. And, it is my hope you have read and then re-read this article in order to fully utilize the statistical information and lessons learned that are pertinent to your own health and fitness club business. Club Insider will continue to report on this topic until it has become a thing of the past. Thank you for reading.

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