Club Industry’s Fitness Business Pro, March 2008

By John Craig, Editor

WEST ORANGE, N.J. - When the JCC MetroWest opened a new 20,000-square-foot fitness center in 2006, it decided to concentrate on core capabilities and outsource the day-to-day operation of the $24 million facility.

That's where Plus One Health Management stepped in.

The JCC hired the New York-based corporate fitness provider to run the facility. Under the terms, Plus One receives a monthly management fee and can earn incentives for hitting certain bottom-line benchmarks.

So far, it's been a sweet deal for both sides.

Plus One has improved operations at the gym, driving revenues and boosting member satisfaction, according to JCC officials.

As part of the transition, Plus One absorbed a third of the JCC positions and transitioned 3,200 existing memberships to a paperless electronic platform.

"In January we celebrated one year in our new fitness center," said JCC executive director Michael Hopkins. "The biggest change is we are over 1,000 [membership] units ahead of where we were a year ago. We've also raised our dues and are now grossing over $5.2 million in fitness membership revenue. Based on our review of the data, we're the fourth-largest JCC in fitness membership revenue in North America."

Before partnering with Plus One, the JCC MetroWest had operated independently for over 130 years.

"We spent a fair amount of time looking at three different models," Hopkins said. "One, what would the fitness membership revenue and expenses look like after our renovation if we ran it ourselves. Two, what would they look like if we hired a consultant to help guide us, and three, what would the bottom line look like if we outsourced it. The difference including all of the cost of outsourcing was overwhelming that outsourcing was a smart financial move for us."

As persuasive as the numbers, Hopkins said, was the belief that the quality of the fitness services would be improved.

Among the changes under Plus One, the JCC has an upgraded the orientation program, a full-time dietician offering programs for all members as young as age 8, and new programs in prenatal yoga, massage, Pilates, racquetball, and children's fitness. The number of group exercise classes offered each week increased from 65 to 115.

Working with the JCC was something of a cultural shift for Plus One, which is known mainly for developing and managing fitness centers for Wall Street firms and other big companies, such as Google Inc.

"In the end, customer satisfaction is our number one priority. We bring the same level of service and hospitality to all of our facilities, whether they are located on Wall Street or in the suburbs of New Jersey. Our experience with the JCC exemplifies that," said Plus One chief executive Mike Motta.