Programming for Profit
A Strong Business Model Plus Creative Programming Can Keep Your Aquatics in the Black
By Rick Dandes
Family-based aquatic facilities that are as much about leisure activities as they are about swim lessons, therapy and exercise programs are the norm for new construction, as it is the only business model that can sustain itself by generating revenues apart from user fees, according to several national consultants specializing in aquatic programming.
These days, very few municipalities in a still-recovering American economy can afford to subsidize the operational costs of a large aquatic facility. "It's the new fact of life," explained Jill White, owner, president and CEO of Starfish Aquatics Institute in Savannah, Ga. "And it's absolutely all about the financials. So I think the main trend in aquatic programming—and it's been a long time coming—is that there is more emphasis on finding ways to produce revenue from programming."
For years, White continued, a wide variety of programming was something an aquatic facility was expected to provide to the community, and not a lot of attention was paid to the revenues generated or the cost to provide such programming. "That's no longer the case. I think the aquatics industry is now getting much savvier about realizing that they do have to produce revenue," White said, "and either charge more or find creative ways increase participation."
Park directors have had to become more business-minded about what programs they can provide, added Darin J. Barr, senior associate, Ballard King and Associates, a consulting firm based in Highlands Ranch, Colo. "Managers have ever-tightening budgets, so they must factor in the operational expenses of keeping the pool area open when it comes to pricing the cost of a seasonal pass or participation in an exercise class, for example. Water is not free anymore. People expect there to be core programs in place, such as teaching kids how to swim, or the basics of water safety, and that's fine. But even with those basic programs, mechanical pumping systems have to be constantly monitored, the water quality has to be maintained, and adequate staffing has to be on hand."
Engage With Exercise Programs
People expect more value from their aquatic facility, and they're getting it. Over the past decade there has been a strong push from the baby boomer generation to get back in the pool and not only swim laps but also benefit via an assortment of in-water therapy and exercise programs being offered, said Jeff Lococo, president of Lococo Company in Sandusky, Ohio. "We see this trend not only in municipally run aquatic facilities but also in college recreation centers, health clubs, hotel and resort pools, and even waterparks."
There are more specialty programs available to meet the needs of a broader, more age-diverse audience. Water exercise and aerobics is not just for older populations anymore. The audience has broadened to include younger professionals and people who really want more of a fun exercise—like a Zumba exercise routine that combines a high-intensity type of aerobic workout with music. Such combinations have made these programs much more appealing to younger participants.
At the other end of the spectrum, there is a greater emphasis on specialty programs like rehabilitation through partnerships with hospitals, rehabilitation centers and sports medicine clinics for people who want a higher level of water therapy training to increase athletic performance, or who are recovering from injury or have a specific medical condition.
"Within rehab," White said, "we see people from all walks of life and all ages, from high-level atheletes to seniors who are either wanting to come back from an injury or are out to prevent something. We also see people who just want to remain active longer." People are turning to the idea that if they get hurt running, they can turn to running in a pool; in a fashion, this is rehabilitation with less stress on the body.
Yes, the aging population is driving more and more aquatic physical therapy and advances in water-based exercise, said Ray Lauenstein, business development manager for Aquatic Development Group in Cohoes, N.Y. Group classes, water running and cycling training are all happening in pools around the country. Warm water pools are more popular for working with a range of therapy applications as well as parent/infant classes.
"The obesity epidemic in the United States continues to get worse," Lauentstein said, "and water-based exercise is a popular alternative to this population in the right setting."
Group Exercise Gains
Holding group aquatic classes is another trend on the upswing, Barr said. "What's interesting is you are seeing more of those dry group exercise programs translated into the water; witness the popularity of holding aqua yoga classes or pool Pilates."
These classes can be very cost-efficient. "You can teach a group of 15 to 20 people with an instructor and a lifeguard," Barr added, "and thus generate a significant amount of revenue. The revenue derived from these programs is higher than you might get from a basic learning-to-swim program, where you have six to eight kids in a class. This is a trend that I do not think is going to slow down."
Lauenstein suggested other examples of water exercise and aerobics:
- Sport-specific training: Water running, spinning-type classes on submerged bikes, and triathlon training and events are growing in popularity (mirroring the growth in triathlons in general).
- The aging and active baby boomers still want to compete and train hard, and water-based training is friendly on their worn-out joints.
- Zumba and yoga offered in the water will continue to evolve. Even paddleboard yoga (using a stand-up paddleboard) could be done in a traditional pool or wave pool.
Pay to Play?
Running an efficient operation with diverse programs, keeping patrons happy and still keeping to a business model that will keep you in the black often begins with the design of your facility, Lauenstein added. "Is the facility worth paying for? Do your pools and features accommodate programs for a wide range of patrons?"
For example, he said, a deep-water lap pool is almost always a guaranteed money loser. More and more consideration is being given to moveable floors in those pools, so the owner can program a variety of ages and skill levels by varying the floor height. There are designs that would actually allow owners to turn the deck of the moveable floor into a splashpad with removable features.
Entertainment value is a big factor in profitability. You must engage children so that it becomes a family destination. Simple additions such as slides or adding another body of water such as a small lazy river can turn a facility into a money-maker. These features have multiple program uses such as water walking, reverse current swim training and general recreation. The facility now becomes worthy of birthday parties and group rentals.
"A small wave pool can actually be three pools in one: waves for fun and profits, lane swimming for training and exercise, and a zero-depth pool with play features," Lauenstein said. Being creative in your design will open new doors to new patrons and revenue.
Aquatic facilities must also stay relevant in their program offerings by providing a more complete schedule of healthy lifestyle exercise and aerobics classes, combined with a new trend of "pay to play" outdoor sports taught by experts at the facility or in the field.
White agreed with Lauenstein and Lococo. One of the best ways to generate additional revenue is to understand the concept of cross programming, she said, "where the pool should be full the entire time it is open and not just with one thing. In the past, you'd have time carved out with a swim team,or time carved out for water aerobics lessons. But you really have to go out and run concurrently two, three or even four activities at the same time to maximize the pool space. Obviously, you have to put in programs that are compatible with each other. You can't have something that uses loud music, which would interfere with something of a quiet nature going on."
Analyze Costs and Demographics
Being in the black begins with looking at how your facility is used the entire day, hour by hour, Barr said. "You have primary users of the facility, and you have to engage those folks with your core services. You want to be in the black when it comes to providing those services. But you also want to find out how you can expand those core services," he said.
Understand what your true costs are. You have a basic staffing cost, but are you factoring in your instructional costs?
"You also need to be cognizant of the market that you are in," Barr said. "Not every pool is able to run in the black because of the market in which it is situated. I'm not saying that you shouldn't strive to be in the black, but take a look at the people you are serving, and set a reasonable operational goal, in terms of expenditures and expected revenues. You need to have these discussions early on. More and more agencies that run pool facilities are realizing they need to be as cost-efficient as possible, based upon the facility they have and the market they serve. So it might not be a realistic goal to be in the black; maybe breaking even is what you can strive for."
Look for outside partnerships to help defray costs. Why not lease out a little space to outside groups such as scuba shops, scout groups or hospital rehab groups that might not have a nearby facility of their own? Try to develop partnerships to expand programming. Partner up with businesses to operate fitness programs, or schools to run programs—all that can broaden your base of patrons. Building loyalty among those who do use your facility for programs through the use of social media can also be effective in getting the word out. If you have a program that is popular, let people know about it by "tweeting," or spotlighting it on your Facebook page.
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