Transforming a fitness center from loss to profit
Published by HealthFitness on January 18th, 2025
A Fortune 100 company constructed a state-of-the-art fitness center at its world headquarters with the intention of demonstrating its cultural commitment to health and wellness.
After years of misguided management and struggling employee utilization, this organization was operating at a net loss of $250,000 per year in EBITDAR (earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs.)
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Challenge
We worked with the organization’s Vice President of Human Resources to identify key challenges and assumed control of management and operations. Immediately, we restructured staff and implemented customer service processes that made the club more inviting and accessible.
Low membership and poor utilization created the organization’s greatest strain, so we launched an exhaustive marketing and sales program, focused on raising club awareness and broadening membership qualifications.
Solution
By opening up the fitness center to a percentage of the public and adjusting fees, we drove new revenue and generated greater employee demand without disrupting the organization’s unique culture.
Operationally, we reassessed spending and leveraged its extensive range of central support services to right expenses. Implementing industry best practices, we elevated the club to maximum profitability.
Results
After managing the company’s fitness center, we turned their track record of a seven-year loss into a tenfold profit five years later. Within 18 months, we eliminated the EBITDAR subsidy and posted a profit of $25,000. Five years later, the EBITDAR profit had increased to $263,000 annually.
After years of misguided management and struggling employee utilization, this organization was operating at a net loss of $250,000 per year in EBITDAR (earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs.)
Challenge
We worked with the organization’s Vice President of Human Resources to identify key challenges and assumed control of management and operations. Immediately, we restructured staff and implemented customer service processes that made the club more inviting and accessible.
Low membership and poor utilization created the organization’s greatest strain, so we launched an exhaustive marketing and sales program, focused on raising club awareness and broadening membership qualifications.
Solution
By opening up the fitness center to a percentage of the public and adjusting fees, we drove new revenue and generated greater employee demand without disrupting the organization’s unique culture.
Operationally, we reassessed spending and leveraged its extensive range of central support services to right expenses. Implementing industry best practices, we elevated the club to maximum profitability.
Results
After managing the company’s fitness center, we turned their track record of a seven-year loss into a tenfold profit five years later. Within 18 months, we eliminated the EBITDAR subsidy and posted a profit of $25,000. Five years later, the EBITDAR profit had increased to $263,000 annually.
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