Recreation Centers and their Profitability
Municipal recreational centers are places of civic pride and their popularity is tremendous.Â
A well run recreation center is especially useful in tackling openings in available resources for community members. Since such centers are usually local and deal with local needs, their search for funding in order to boost profitability should start at the local level.
Therefore, how can a recreation center offer the public what they want and remain profitable? What are the amenities and programs that have kept profits above expenditures to produce a revenue surplus?
Most individuals involved in park and recreation centers have differing thoughts and data on what makes their facility successful and profitable.
Here are a few of the answers…
Recreation Centers and their Profitability
Go 30 to 85
Nearly two-thirds of survey partakers, approximately 63%, have facilities that are from 30,000 to 85,000 sq ft. About 25% have facilities below 30,000, and the other surveyed facilities, about 12%, are over 85,000 sq ft.
Nearly 62% of these facilities were built after 1990. Moreover, roughly 50% say that they have between six to ten fulltime employees, while 38% manage their services with one to five fulltime employees. Over 43% of the facilities have added an addition or refurbished since they were originally built.
Is it possible to be profitable with a 100,000 sq-ft recreation center? Many seem to think so. For example, an 110,000 sq-ft recreation center in Homewood Illinois is an enterprise-fund or profit center for the Homewood Flossmoor Park-District.
This means that there is no tax money used. In fact, they are producing enough revenue to the point that the surplus pays for the facility managing expenditures itself.
One of the main avenues that make the recreation center so profitable is the park districtâ€™s joint venture with a neighboring hospital. The healthcare provider is not only a tenant; they also took up the cost for the related construction of the new addition along with a fitness center extension.
Therapeutic programs were acknowledged by the park district as the third reason patrons use the services along with a wellness center, home healthcare, a dietitian, offices, aquatic therapy, cardiac rehab, and acupuncture.
Approximately one-third of the recreation centers surveyed stated that their membership was under 1,000, with those reporting membership between 1,001 and 2,000 at 23%. A slightly less percentage at 16%, reported memberships between 2,000 to 4,000, and 22% reported memberships over 4,000.
Men were the biggest membership group, with female memberships close behind. Family memberships came in third. Youth memberships, junior memberships, and corporate memberships were the lowest of all membership categories.
Though men had the highest memberships, an aging population could change that trend and influence a centerâ€™s programs. According to the U.S. Census Bureau, by the year 2025, an aging population will increase by 50%.
Recreation centers should focus on specific groups to increase memberships in order to stay profitable. With the aging population growing, recreation centers should focus more on younger groups and corporations as well.
Exercise, Instruction, and Leisure
Over half of the centers surveyed, at least 56%, stated that the main reason their patrons used their recreation center is for workouts or exercise.
Fewer than 63% said that instructional classes were the second reason patrons used their recreation center, with leisure/recreation programs at 25% coming in third. Exercise facilities continues to be a big draw for current patrons and new ones; thereby, keeping a recreational center profitable.
Fitness, Dance, and Gym
Half of the partakers agreed that fitness/recreation centers are the main revenue generating programs in their facility. Over 38% acknowledged that dance and aerobic programs were the next most profitable, with gymnasiums coming in third at 25% as a revenue generating activity.
Where Does Daycare Fit in?
The quantity of labor makes adding a daycare very challenging. Such a venture should be completely investigated before a recreation center provides this type of a service. It could take several years before fully comprehending what was first considered a routine revenue program.
When recreation centers were questioned whether a daycare facility is a wise choice for a new facility, they emphatically answered â€śno.â€ť Why? Because thereâ€™s not enough ROI, Return on Investment, for those requiring facility space together with demands of new programs that all recreation professionals are eventually confronted with.
Best Facilities to Develop
A vast margin, at least 69%, agreed that fitness areas are the number-one space they would develop at their recreation center. Because fitness centers are a huge revenue program, itâ€™s not shocking that most centers would invest on extending such a program. The next space surveyed that participants stated they would expand are gymnasiums at 31%, with multi-use rooms and pre-school program areas 19%.
Indoor Vs Outdoor
At least 50% of surveyed participants have indoor pool facilities. Of those that admitted of having indoor pools, only 25% have profits that surpass expenditures to generate a revenue surplus.
Many of the pool facilities were comparatively new with 75% being constructed after 1990. Less than 29% of recreation centers stated that they had an indoor pool that was profitable; however, 38% admitted to having an outdoor pool facility.
Different from the indoor facilities, recreation centers with outdoor facilities reported a minimum of 80% revenues that surpassed the cost to produce surplus revenue. Dissimilar to indoor facilities, the number of swimmers was significantly higher. No one reported an amount under 200. Furthermore, 17% had 201 to 400 swimmers, with 50% able to accommodate 400 to 1,000 swimmers and the remaining reported swimming amounts over 1000 at 33%.
What Does it all Mean?
The above statistics from the recreational center survey reveals the following trends:
- The total square-footage of the recreation centers ranged from 900 to 120,000 with a median of 53,725.
- The median fulltime employees working at the recreation center is nine to ten people.
- Recreation center memberships started at 76 to a little over 4,000, with the median being 1,577.
- At least 50% of recreation centers include an indoor pool with just 29% reporting profits surpassing costs to generate a revenue profit or surplus.
- Over 38% of recreation centers include an outdoor swimming pool with more than 80% reporting profits surpassing costs to generate revenue surplus or profit.
- Most, at least 83%, of outdoor pool facilities have a total amount of swimmers ranging from 401 to over 1,000.
The lessons garnered from this survey and its results means that it is not essential to have a huge recreation center in order to be successful.
The thing to do is to customize your recreation center to meet the demands of your service patrons, carry out surveys about various programs every couple of years, look into affiliations to make the most of programs and compare your center against others to assist you with becoming more successful and profitable.
Specialized Equipment and Services
In addition to establishing a retail component along with fitness programs in your recreation center, there are a few specialized services that can generate additional profits like the introduction of high-tech products. At present, the speedy increase in popularity of vibration-training products might be something to consider.
Vibration training products, such as Itonic or Vibraflex, and others in this fast moving innovative category, offer the opportunity to train the whole body in less time than traditional methods. In addition, they represent one of the best low-impact, yet highly-effective forms of training.
Recreation centers can incorporate the use of these types of high-tech devices with the direction of a qualified trainer or certified-clinician along with an investment in commercial cardio equipment.
The financial rewards can be substantial with the right program promotion and profit model. In addition, there are various services such as diet and nutrition analysis, heart-rate monitoring, and body-fat analysis that can be valuable for your patrons adding to your profitability margin.
- Recreation centers increase the local tax base and boost real estate values.
- Quality recreation centers are cited as one of the main amenities that businesses mention in relocation decisions according to various studies.
- Recreation centers generate finances for the area economy. A study taken in 2012 revealed that such facilities have generated as much as $62 million per year for their local economy.
Health and Environment Benefits
According to research by the CDC Centers for Disease Control and Prevention, creating, enhancing, and promoting centers where physical activity such as exercise is promoted, can improve individual and community well-being resulting in a 25% increase of inhabitants exercising at least three-times a week.
Profitable Recreation Center Is an Evolving Progress
A successful recreation center is a functioning evolving facility. If managed correctly, it can influence the locale in both patron satisfaction and profitability. Usually, resorts and hotels that effectively leverage a recreation center to support their core hospitality-business view recreation centers as more than a onetime, inactive installation.
Up-to-date standards of hygiene and safety with the continuous altering expectations of patrons in terms of unique services and amenities, while also staying abreast of modernized modalities and technologies, will help to play an important role in a recreation centerâ€™s profitability.