Kids club

They may only be small but kids are set to be the next big thing for the fitness, sports and recreation industry. Louise Birchall investigates how tapping into the youth market can increase member retention and boost revenue.
Kids club
By Louise Birchall
Sun 09 Nov 2008 04:00 AM

They may only be small but kids are set to be the next big thing for the fitness, sports and recreation industry. Louise Birchall investigates how tapping into the youth market can increase member retention and boost revenue.

It's no secret that catering for kids is expensive, but it's a worthy investment capable of significant returns, which is why fitness facilities in the region should follow the world's mini-market trend.

"I would say that kids are going to be one of the hottest new trends for the next few years. It's the idea of engaging the family," says Simon Brown, health and fitness manager at The Aviation Club in Dubai.

"In the UK, children's leisure is very much a commodity and it's definitely an area for development here. I'm sure the first health club that really catches onto the concept of letting the mother work out or do a fitness class, while the kids also get the opportunity to exercise, will do extremely well in the long run," asserts Brown.

Family business

Attracting kids is particularly significant at a time when growing competition in the Middle East's leisure industry is forcing sports and fitness facilities to adopt an increasingly aggressive sell mode to counteract a huge turnover of memberships.

To stay ahead of the game, health clubs should be focussing their efforts on retaining members, which combined with a steady flow of newcomers is the key to increasing revenue. One of the ways to do this is by catering for the whole family, including the children.

"One of the best ways to not only increase retention but to attract new members and even increase membership dues is to boost the perceived value of the club. Offering great value to the entire family of members, including kids, is one of the best ways to achieve this," says Randy White, CEO of White Hutchinson Leisure and Learning Group, an international consulting company specialising in family and children-orientated leisure facilities.

The company has offices in the US, Doha and Qatar, and has worked alongside more than 400 facilities in 24 countries.

"Most clubs are focused on men. If a club expands its offerings to attract children, membership value greatly increases - to attract children though, you need to also cater for the mother," explains White.

"As a result, membership prices can be increased to include the entire family. A club with high-perceived value to families typically has much greater membership-retention rate," he adds.

While this thought process has been successfully put into action in clubs worldwide, the less mature health and fitness industry in the Middle East has yet to fully exploit the emerging market.

A healthier generation

Clubs that are willing to make the investment in children will immediately be put at an advantage due to the region's family-based culture and weather-limited outdoor recreational activities. On top of this is the growing concern for the younger generation's fitness.

"The volume of family leisure facilities in the UK and US is indicative of the number of families wanting to spend their time together," says Nayad Miyan, senior business development manager, Dubai Properties.

"Physical activity for children is certainly something that needs to be addressed, particularly in Saudi Arabia, which has the greatest percentage of obesity in the region," he continues.

"It's not a fad and shouldn't be something people are joining because they can afford to or because it's trendy; it should be engaged as part of our ethos - a change in lifestyle."

"The cost of an inactive, overweight or obese society will be huge in years to come if trends that are already experienced in other advanced societies are not intercepted now," says Andrew Dick, senior vice president, business development, Al Kamda.

Miyan also says that the more sports facilities are creative and open to cater for all ages, the more successful they'll be.

"If you have got a family of four, you are going to be providing facilities for all of them and your retention rates are going to be so much more bankable," he explains.White outlines three ways of approaching the task: by providing activities that attract children; fitness programmes that appeal to the whole family, and by meeting the needs of mothers.

"Not all children are the same. Designing a successful Child Enrichment Centre (CEC) doesn't mean simply filling a large room with attractions and play events, it requires a lot more," he says.

"The mistake many fitness facilities have made is focusing on children in grade school or older, while overlooking the needs of younger children and their parents. Doing these cuts out a large segment of families from the market," adds White.

In terms of meeting the needs of mothers, White says: "The stay-at-home mother is a great market to tap for weekday business. Many of these mums have children aged five and younger, who are home all day."

"They're in constant search of places to meet and socialise while their children play, and most parents want children to get more exercise. This is especially true in the Gulf states, where there are fewer opportunities for outdoor recreation," he adds.

Grown-up investments

While the idea of incorporating children's services has the scope to significantly increase revenue and, just as importantly, instil a healthier attitude in the next generation, for the full concept to work industry directors must be willing to invest large amounts of time and money.

"It's got to be taken seriously if you're going to do it," explains Greg Boucher, CEO of Middle East Fitness Professionals (MEFITPRO), based in Dubai.

"It's a massive opportunity but you need to have the resources, budget and properly-trained staff," Boucher continues.

"The kids market is certainly making a statement, especially coming back from this year's Leisure Industry Week in the UK. There were so many exhibitors there with kids' equipment. That was probably one of the most talked-about topics.

"Unfortunately a lot of suppliers seem to have gone down the route of supplying gadgets and equipment that cost a lot of money, rather than going with the basic play mentality," adds Boucher.

"Setting up a room full of expensive equipment for kids to dance on keypads may be too extreme I think."

"I'm sure the kids will absolutely love it. I just think that from an operator's point of view you have to look at square footage versus return on investment. And in addition to that starting a new concept can be a risky game," supports Brown.

"Specifically for our facility, we target the corporate market, professionals, singles and couples. We have access to kids' facilities through a company called E-Sports, which has a very successful business model," Brown adds.

Complete solutions

Companies like E-Sports also provide an opportunity for smaller clubs, which don't have the space to cater for children, to still benefit from the kids' fitness market.

Forming partnerships with private leisure companies, E-Sports provides access to a network of sports facilities, locations, trained staff and skilled coaches.

The company offers sports academies and programmes, including tennis, football, swimming and holiday camps, as well as sports management and consultancy.

"It's an important partnership for both sides. Our classes are hugely popular, with our tennis programme attracting in excess of 1000 children a week," says managing director of E-Sports Clark Francis.He adds: "We offer facilities for both kids and adults but probably around 80% of our profit is generated from children.

"We're in many venues but our main contract is with Global Education Management Systems (GEMS), the largest school provider in the city, which has allowed us to really expand our market," says Francis.

Miyan says that recreation facilities would be wise to form similar partnerships with the region's schools: "There's a void in the academic market where facilities that have the space are failing to offer programmed activities for schools during their daytime off-peak hours. You could then engage the support of the schools in getting the message across to kids.

"However, there are environmental conditions which will determine the success of initiatives, such as traffic. If it takes 25 minutes to get to a club, it will be seen as a waste of time. Also, ideally schools should be driving fitness awareness but they seem more focused on academia," adds Miyan.

"If the authorities in the Middle East wish to avoid health care costs and an inactive, unhealthy society, they need to invest in children's activity programmes," says Dick.

"Our interactive products have been massively received by fitness club owners in other parts of the world, primarily in the UK and the US, where obesity in kids is a problem and family time is paramount.

"Having options for children in health clubs gives everyone the chance to exercise collectively or at least train together in the same facility," adds Dick.

"It's also evident that when children see parents taking steps towards a healthy lifestyle, they're likely to follow suit," he says.

Miyan concludes, saying that the most effective way of breaking into the next-generation market is to tag children's fitness onto an existing leisure facility that the parents are already taking advantage of.

"Then you're offering a complete family solution," he explains.

"I think one of the greatest challenges we have as operators is ensuring that the directors understand that although the initial investment in kids' leisure is very large, it will pay massive dividends in the long run."

With thanks to Ciara Murray, James and Kimberly Cox, Lewis Granger, Matilda Barron, and Tariq and Yasmine Kandil.

CASE STUDY: Silverlake, The Family Place, Ohio

A five-year investment in kids' activities costing US $2 million paid off for a US recreation centre, which saw a staggering revenue boost of 120%.

"One of the best examples of the impact that attracting families can have on a club's revenue growth is Silverlake, The Family Place in greater Cincinnati," says CEO of White Hutchinson Leisure and Learning Group Randy White.

"When our company started working with them as a client six years ago they were a traditional fitness, health and indoor-swim club with a singles-based membership programme, called Silverlake Recreation Centre.

"Based on market research, we identified the opportunities of repositioning the centre to attract the family market. Over the next five years both the programming and design for the centre was totally changed," adds White.

"Family changing and rest rooms were added. Drop-off children's play and entertainment centres were created for different age groups, infants, toddlers to three-year-olds, and four- to eight-year-olds.

"Children's spray-pad water features were added to the indoor swimming. Friday-night family programmes were developed. A café and birthday-party rooms were added, and the club was renamed.

"As a result, from the end of 2002 to the end of 2007, the number of memberships increased by 18%, the number of members by 77% and total revenues increased by 120%. US inflation during the entire five-year period was only a total of 15%," says White.

"The number of members and the amount of revenue increased at a far greater rate than memberships, as many members switched from single memberships to much more expensive family memberships," he adds.

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