New monster-sized health clubs are sprouting in cities across the country, including at least two in Colorado, as developers attempt to give wealthy suburbanites and their families an alternative to public recreation centers, bare-bones chains and niche workout clubs.
The for-profit facilities hope to woo members with lavish amenities and enough activities to engage people of all ages and athletic bents. But at least one industry expert has questioned their financial viability.
Two new mega-clubs are planned along the Front Range:
In Colorado Springs, a California-based company is building VillaSport Athletic Club and Spa, an 88,000-square-foot club set to open next summer.
Life Time Fitness of Eden Prairie, Minn., has announced plans to build a 128,000-square- foot health club in Parker. The company’s first Colorado facility is expected to cost roughly $23 million to build and is set to open in the second half of 2007.
“It is far more a health-and- wellness resort than a typical health club,” said Jason Thunstrom, a spokesman for Life Time Fitness.
In addition to weights and cardio equipment, its clubs feature indoor and outdoor water parks, rock-climbing walls, bistros, wellness centers and spas with hair-, nail- and skin-care services.
Membership fees typically range from about $59 per month for an individual to about $129 for a family of four.
This kind of club is being billed as an all-day destination, appealing to families and seniors and avoiding the trendy look and feel of clubs that target urban singles, according to a report this year by Chicago-based researcher Mintel International Group.
Some industry experts question the financial viability of spending $20 million or more to erect a health club when smaller niche clubs such as Curves for Women have been gaining market share.
Publicly funded recreation centers also have emerged as tough challengers, as have the proliferation of midsized clubs that offer patrons convenience and a relatively low price point.
Lakeshore Athletic Club, the state’s largest at 150,000 square feet, was built in Broomfield in 2003. It has struggled to meet membership projections, the club’s owner said. About 6,400 people belong.
“That is a little below our projections,” said Richard Kaplan, president of Syndicated Equities Corp., a Chicago-based investment group that owns the club.
Kaplan noted that the club is trying to expand its services and even persuade doctors and their patients to use its facilities for rehabilitation. He acknowledged that building such a large club may have been misguided.
“Maybe we should have gone smaller, and it would have been easier to meet our projections. It’s a tough business,” he said.
J. Madden, chief executive of the 135,000-square-foot Greenwood Village Athletic Club, questioned whether new mega- clubs will be able to wrest members from the lavish, publicly funded recreation centers that fill a similar niche.
“It didn’t work in Broomfield, so why would it work in Par ker?” said Madden, comparing Lakeshore to Life Time’s project in Parker. “I don’t know how such expenses can be justified.”
The U.S. health-club industry as a whole counts 43.2 million members and $15.6 billion in annual revenue, up 19 percent since 2000, Mintel said.
Some clubs are struggling, according to Mintel, as “membership growth fails to keep pace with club expansion.”
Multipurpose clubs, the category that includes Life Time Fitness and Lakeshore, have seen their market share decline since 2000 from 30 percent, or 9.8 million members, to 23 percent, or 9.5 million members, in 2004.
Meanwhile, smaller fitness gyms have, since 2000, grown from a 15 percent market share, or 4.9 million members, to a 19 percent share, or 7.8 million members, in 2004, Mintel reported.
Even so, Life Time “has been highly successful” with its model, Mintel said, including an initial public offering in 2004. Revenue has increased from $192 million in 2002 to more than $475 million this year, according to regulatory filings.
The company will open eight clubs next year, pushing its total to about 70 nationwide.
Staff writer Will Shanley can be reached at 303-954-1260 or wshanley@denverpost.com.
A club comparison
How mega-clubs compare with a few existing Colorado health clubs:
Lakeshore Athletic Club, Broomfield
Size: 150,000 square feet
Monthly fee: $93 individual; $182 family of four
Amenities: Lighted tennis courts, weights, cardio equipment, a rock-climbing wall, basketball, an outdoor water park and a spa
Life Time Fitness, Parker (opens second half of 2007)
Size: 128,000 square feet
Monthly fee: Starting at $59 for an individual; about $129 for a family of four.
Amenities: Indoor and outdoor water parks, weights, cardio equipment, basketball, racquetball, a bistro and a full-service service spa
24 Hour Fitness, multiple locations
Size: Many clubs measure between 25,000 and 50,000 square feet
Monthly fee: Typically between $30 and $40
Amenities: Basketball, swimming, weights, cardio equipment and group classes, depending on location
Curves for Women, multiple locations
Size: Typically less than 2,000 square feet
Monthly fee: About $40
Amenities: One-room studios with a circuit of at least eight hydraulic weight machines that provide resistance and cardiovascular workouts in about 30 minutes
Source: Denver Post research
