ClubIndustry » For-Profit Facilities » Health Club Operators Are Considering Buying Cardio Equipment Again

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Rick Bouza of RHB Solutions, Mount Kisco, NY, agrees. RHB is a consulting firm that specializes in single-source management for health clubs.

Generally, the health club member is savvier than ever, Bouza says. In most cases, they know exactly how old a piece of cardio is, and there is no question having outdated equipment in your club will make a statement about who you are.

Depending on a club's market, keeping cardio equipment updated can simply be a good idea or be absolutely critical, he says. The degree depends on local competition, the club's price point, a facility's level of cleanliness and even the quality of service offered.

Consumers are smarter than ever and they can immediately distinguish between cardio without viewing screens and audio/video features, Karl of Sport Time says. Consumers look at it as being primitive if machines don't have it.

Karl says his company is upgrading not only because members are savvier but also because he operates in the New York market where his competitors are often big companies with deep pockets.

We absolutely feel that we're trying to give members a five-star experience and feel that there's zero tolerance for outdated equipment, he says.

Creating attractive clubs with the latest equipment is a market differentiator for Sport & Health Clubs, says Mitch Batkin, senior vice president. Sport & Health is a chain of 24 clubs in the District of Columbia, Virginia and Maryland.

Customers are pretty savvy, so they're going to shop around for location and to see if a club meets their needs and has nice equipment, Batkin says. We have to compete on that. We know members appreciate new equipment, and we continually evaluate their needs and balance them with the obvious expenses. It is paramount to keep our members happy.

Last year, Sport & Health received $25 million in financing from PNC Mezzanine Capital and CMS Mezzanine Fund. The company made substantial upgrades to at least half of its clubs in 2009, which could be partially attributed to those funds. Sport & Health generally replaces equipment every five years, Batkin says. The company is opening a new club in 2010 and planning two large remodels, in addition to ongoing equipment upgrades.

We'll really do a lot of spending in 2010, and we think that's a good decision, Batkin says.

Clubs that invest in updating equipment during the recession will be more competitive once the economy turns around, Bouza says.

We all know that the economy will turn eventually, he says, and the last thing you want to do is to hurt your brand long-term with a subpar product today.

WHAT IS THE NEXT CATEGORY OF EQUIPMENT YOU WILL BUY?

Results from the 2009 Club Industry reader survey. Base = 340, all respondents. (One club = 264 and two clubs or more = 76.)

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