At $1.6 million, tennis was the second-highest source of ancillary revenue last year at Greenwood Athletic and Tennis Club, Greenwood Village, CO. Personal training was first at $1.8 million. Photo courtesy of Greenwood Athletic and Tennis Club.

Ask Paula Neubert, president and general manager of Greenwood Athletic and Tennis Club, Greenwood Village, CO, about the importance of ancillary, or non-dues, revenue, and she doesn’t bat an eyelash.

“We wouldn’t be here if we didn’t have non-dues revenue,” Neubert says. “We place as much importance on our non-dues revenue as we put on our membership revenue.”

Greenwood is not alone in emphasizing the need to generate revenue from streams other than membership, according to results in the 2011 Club Industry State of the Industry survey. Survey respondents work at commercial health clubs, nonprofits and university rec centers, among other facility types.

The average amount of annual revenue from membership dues, including initiation and enrollment, is $1.7 million, according to the survey. After that, the categories that generate the highest average annual revenue among respondents are personal training ($596,240); tennis/racquetball/squash ($305,334); physical therapy, including rent and operating revenue ($211,108); chiropractic services ($154,200); weight loss/nutrition programs ($151,238); aquatics programs ($129,106) and children’s programming ($128,074).

Greenwood Athletic, a high-end, 153,000-square-foot multipurpose club, does quite well on membership revenue alone, considering it has 7,000 members and about 3,000 memberships at an average dues per membership of $162 per month. Greenwood expected a 3 percent increase in 2011 from the $11.5 million in total revenue the club generated in 2010, which placed it at No. 62 on Club Industry’s Top 100 Clubs list last year.

Although total 2011 revenue figures for the club have not been compiled, Neubert says personal training was the club’s biggest source of ancillary revenue last year, generating $1.8 million. Tennis was not far behind at $1.6 million, including memberships. (The tennis club and the athletic club are two separate facilities at Greenwood.) Thanks to a new studio, Pilates generated $570,000 in 2011, an increase of $17,000 from the previous year, Neubert says. Youth programs also generated $436,000 last year, and $500,000 is a goal for this year.

Although most clubs would like a 70 percent/30 percent split between their membership dues revenue and ancillary dues revenue, Greenwood has about a 60 percent/40 percent split, Neubert says, with a goal of a 55 percent/45 percent split.

“When we look to bring in non-dues revenue, we’re looking to bring in millions in non-dues revenue,” Neubert says. “The way that we run our club and the expectations of our membership—because of the price that they pay and because of the lifestyles that they live elsewhere—they demand and expect higher levels of everything else.”

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