You could call them big spenders. Or, you could just call them big profit centers for health clubs. They are the people in your clubs who have a thing for racquets, whether it's tennis or racquetball — or even squash. While the heyday of tennis and racquetball ended in the 1980s, some players have refused to put down their racquets. In fact, the number of tennis and racquetball players has remained fairly stable over the past few years. But the most exciting news for club owners is that these members can be a source of tremendous revenue for clubs that know how to keep them happy.

For 20.5 percent of the 6,500 International Health, Racquet & Sportsclub Association (IHRSA) member clubs, tennis is one of the five most profitable portions of their business, according to a survey by the trade association for club owners and senior management at commercial health clubs.

“Racquet sports play an important role for those clubs on a number of levels,” says Bill Howland, director of public relations and research at IHRSA in Boston. “From a volume standpoint, tennis and racquetball are important profit centers. You have a tremendous amount of space dedicated to the sport, so from a business standpoint the club will be focused on making that space profitable to justify that space.”

In 1987, a decade after the heyday of tennis, 21 million people played the sport in the United States. By 2001, that number had dropped by about 30 percent to 15 million. Racquetball's numbers also dropped during that time going from 10.4 million players in 1987 to 5.3 million in 2001. However, those numbers have been holding steady for the past few years, according to a survey by the Sporting Goods Manufacturers Association, which is the trade association of North American manufacturers of sports apparel and equipment.

“The big shakeout has come and gone,” Howland says about the decline in popularity of racquet sports and the decrease of courts in the late 1980s and early 1990s. While some clubs still convert courts to fitness areas, Howland says that occasionally, a club builds a court.

GAME

The more successful racquet clubs promote their programs, Howland says. They have programs that encourage the fitness crowd to try racquet sports, and they get children involved through after-school programming. They have internal promotions, and they advertise in the community that they are a source for racquet sports.

“The good news is that where clubs do succeed (with racquet sports), it is a tremendous source of revenue,” says Howland.

Court fees, lesson fees, leagues, events, tournaments and the pro shop are all revenue streams associated with racquet sports. The best part is that these streams don't depend on how successful a sales staff is at recruiting new members.

Members at West Hills Athletic Club in Kalamazoo, MI, pay a court fee on top of their membership fee. They also pay extra for tennis lessons and leagues for juniors and adults.

“Tennis people pay and pay,” says Deno Frier, general manager at West Hills. The club has nine indoor tennis courts that cover 63,000 square feet, but no outdoor courts or racquetball courts in the 130,000 square foot club. The club opened 27 years ago as a tennis-only facility with 12 courts. In the early 1990s the club added some fitness equipment and then a basketball court, which required the conversion of three tennis courts into the new space.

Mid-Town Tennis Club in Chicago also charges a court fee in addition to a membership fee, which applies to the tennis and the fitness areas of the club.

“Tennis people realize that their life is a la carte,” says Timmer Halligan, regional general manager with Tennis Corporation of America, which owns Mid-Town. The club, which was the first indoor tennis club in North America, has 18 indoor courts, but no racquetball courts. At 140,000 square feet, Mid-Town is now the largest tennis club in the world.

Tennis and racquetball players tend to spend on amenities, which has increased Frier's revenue in those areas. Tennis used to account for 35 percent of Frier's revenue, but now it accounts for 16 percent. However, that decline is from the increase in popularity of other programs and amenities rather than from a decline in the popularity of tennis. Tennis and tennis playing members are still an important part of West Hills.

“They are important members,” Frier says. “They spend a lot of money here. As members, they provide half to two-thirds of the revenue.”

The personal training revenue at West Hills is growing so quickly that it will soon bypass tennis, he says. Many of the members using personal trainers are the same as those playing tennis.

“So if you lose them in one area, you will lose them in the other areas as well,” Frier says.

Racquet sport players also spend at the pro shop, buying balls, clothing, racquets and shoes and getting their racquets restrung.

Halligan agrees that tennis players like to shop.

“A good percentage of our revenue comes from the pro shop — about 5 percent,” Halligan says.

SET

At most fitness centers, the overhead on the fitness area is greater than on the courts because so much of fitness is free, says Halligan. Fitness areas have trainers on the floor, but clubs don't get extra money for that. The percentage of revenue vs. payroll overhead is higher in fitness. Overhead for tennis courts is about 50 percent, Halligan says.

However, that doesn't mean that overhead for it is cheap.

“There's a real investment in one game and that's a challenge,” says Howland. A lot of money goes into lighting and heating the space, personnel and programming to make the space profitable.

Looking at the possible number of people per square foot, a club can get 40 to 50 people into a group exercise class in much less space than a tennis court.

“The clubs that are succeeding at racquet sports, they are doing so because they know that programming is driving their success,” says Howland. “There is a real intentional focus. You will have pros, a tennis director, someone dedicated to programming and organizing leagues and tournaments. It's very intentional.”

Clubs with four or more courts of any given sport must devote energy to filling up the courts as much as possible, particularly during the middle of the day when courts are less busy.

“The better operators recognize that the name of the game is utilization — getting people out there on the court,” says Howland. That may mean providing mid-day programs for stay-at-home moms and after school programming for children.

MATCH

Despite the revenue generated by racquet sports players, tennis and racquetball are not driving people to join gyms — fitness programming is. That's the case at West Hills. Because of the growth in its fitness area, management at West Hills has discussed expanding the fitness area, which may encroach on the tennis courts, says Frier.

Bally Total Fitness has seen a decline in racquetball interest at its clubs with courts, according to a Bally spokesperson. Instead, Bally members want larger cardiovascular areas with more state-of-the-art equipment and larger group fitness areas. In fact, many of the Bally facilities that are remodeling are converting their racquetball courts to large group exercise or cardio areas, the spokesperson says.

At Mid-Town, however, fitness is an amenity to tennis, says Halligan. Mid-Town has a 2,000-square-foot fitness center with 25 pieces of cardio and group exercise, including Pilates and yoga. The club has about 2,650 memberships with families and individuals, the majority of whom use the tennis facilities, Halligan says.

“Fitness has become a part of tennis now,” says Halligan. “You have to keep yourself in shape so that injury doesn't keep you from playing.”

Racquetball is another story at Mid-Town. Halligan has never considered putting racquetball in the club, but another TCA-owned club, Edens Athletic Club, at which Halligan also works, has five racquetball courts.

“I don't believe there is a big boon in people wanting to play [racquetball],” says Halligan. “The people who play there have been playing for a long time and haven't hung up their racquets yet. I don't see that growing.”

Thirty-seven percent of 2,881 IHRSA member clubs surveyed have racquetball facilities while 18 percent have outdoor tennis and 14 percent have indoor tennis. Six percent of the clubs in the survey offer a racquetball league and 5 percent offer a tennis league. In the industry in general, 25 percent to 30 percent of clubs are multipurpose with a racquet sport component, says Howland, leaving 70 percent to 75 percent that are purely fitness.

“There's a different dynamic in the racquet sport folk,” says Howland. Racquet sports players play knowing they are getting a workout, but they are committed to it for the sport, the fun and the social aspect.

“If you take care of them, they will stick with you,” Howland says.

That's loyalty and profits sitting right there on the court. That's why clubs that offer racquet sports would do well to pay attention to this crowd and ensure that they stick around and keep bringing new players into the fold.

Reaching Out to the Next Generation

While the popularity of racquet sports is holding steady, several groups would like to see a revitalization of interest in these sports. The United States Tennis Association (USTA) in partnership with the Tennis Industry Association has developed an initiative called the USA Tennis Plan for Growth. The goals are to recruit new players, retain current players, increase the number of frequent players and strengthen community tennis associations. Other organizations supporting this initiative include the United States Professional Tennis Association; the Professional Tennis Registry; IHRSA; and the National Recreation and Park Association among others.

“We are hopeful we will see participation rebound,” says Bill Howland, director of public relations and research at IHRSA. The groups hope to hook Americans under age 25 on racquet sports. That group, which numbers 80 million, is almost as big as the baby boomer generation.

The plan includes giving funding to communities for local USA Tennis 1-2-3 programs (a series of six low-cost, introductory group lessons) and USA Team Tennis programs (organized matches). The group has given grants to more than 300 communities across the country and has had more than one million participants since the program started five years ago. Of the new or returning players, approximately 75 percent were under the age of 18.

The USTA also has joined with the Cartoon Network to get young children interested in the sport. Kids can join the Cartoon Network Tennis Club to learn to play tennis. For signing up, the children get a cartoon network tennis racket and cover, a T-shirt with four cartoon characters on it, wristbands, a practice ball and a tennis activity book with puzzles, games and tennis information, including a glossary of tennis terms, tennis tips, and court conduct rules.

Racquetball by the Numbers

The number of racquetball players in the United States increased slightly in 2001, up 2.7 percent from 5.15 million in 2000 to 5.29 million in 2001, according to the Sporting Goods Manufacturers Association (SGMA), which is the trade association of North American manufacturers of sports apparel and equipment. The number of frequent players (those who played 25 days or more a year) was 1.37 million or 25 percent of the overall player base.

The study also found that the average annual household income of a frequent racquetball player was $69,200. In fact, 38.3 percent of frequent players have household incomes between $50,000 and $75,000 per year while 37.5 percent have household incomes of greater than $75,000 per year.

Fifty-one percent of players have attended college. Twenty-one percent of frequent players have an advanced college degree and 20 percent have between one and three years of college. Nearly 10 percent have a four-year college degree.

The average age of a frequent player was 34.9, although it was a popular sport among all age groups. While 20.6 percent of frequent players are 12 to 17 and 19.4 percent are 18 to 24, the third largest age group is 55 to 64, where 14.7 percent of the frequent players are found.

Also, there was a good balance of participation in all regions of the United States. However, south and north central parts of the United States seem to be the hotter spots for racquetball. Combined, 65 percent of the frequent player base lives in those areas. The West accounts for 22.9 percent of frequent players. The Northeast has 11.5 percent frequent players.

The majority of frequent players live either in large metropolitan cities of 2 million or more (45.3 percent) or in towns with populations of less than 100,000 people (30.9 percent).

Clubs' Most Profitable Programs and Services
Service Percents
1. Personal Training 50.5 %
2. Massage Therapy 28.2%
3. Pro Shop 26.2%
4. Aquatics Programs 24.3%
5. Tennis Programs 20.5%
6. Food & Beverage Sales 11.7%
7. Tanning 9.7%
8. Physical Therapy 7.8%
9. Summer Camps 7.8%
10. Kids Programs 6.8%
11. Martial Arts 6.8%
Explanation: Clubs were asked to identify their five most profitable programs or services — i.e., those programs with the greatest net operating revenue before overhead. The figures indicate what percentage of clubs cited a given program or service as being among their five most profitable.
Source: IHRSA member census, 2,881 North American clubs