From humble beginnings as a teaching tennis professional at Mid-Town Athletic Club in Rochester, NY, Doug Cash is now responsible for 42 TCA clubs around the country. Cash tells Club Industry about the changes he has seen in his more than 25-year career — the blending of tennis and fitness and the importance of training and offering a career track for staff.
Ci: There was no real racquet sports presence at the Club Industry show last month. I think that there's a miss there because it seems there's a resurgence in the racquet sports segment.
What we have seen is a resurgence in the tennis play and programming, especially in activities that people can do as families or do together. Last Thanksgiving, I was in Hilton Head on vacation. It was the busiest Thanksgiving I'd seen on Hilton Head with people playing tennis. Our tennis revenues and profit have gone up in the past year and I think people are spending dollars closer to home and doing things as families.
Ci: It can also boost ancillary revenues because it seems that centers that have pro shops with racquet and tennis gear do much better business than straight fitness pro shops.
Tennis people buy clothes. The women like to look good, and we have gone into our pro shops with more outer wear that they can wear outside the club that have done nicely too.
Ci: Is that something that you've seen change or grow over the years? Being able to boost revenue from additional outlets, like pro shops, juice bars and nutrition?
Certainly. Seventy-five percent of our revenue comes from dues. Everything else takes up a smaller share, but everything adds up to nickels and dimes. Today, you need the nickels and dimes along with the dollars. We have a national pro shop manager who does nothing but buy and makes sure our pro shops are run correctly and with the right profit margin, the right goods, and the right amount of goods on the floor. We spend a lot of time on it.
Ci: I think that's a problem a lot of the clubs have, especially the smaller clubs. They see it as a time-intrusive opportunity that may not equal the profits.
In the small clubs it's more difficult because of the traffic. And, you're right with your comment on the fitness. If it's pure fitness they just don't buy as much.
Ci: How has TCA found a balance of fitness and tennis?
One of the things we've done is to incorporate programs of fitness on the tennis court so that we get people out there and you don't have to know how to play tennis. We have classes called “rise and shine” in Rochester, NY. In these classes they fill up eight courts from six til eight in the morning. They play loud music, which is anti-tennis etiquette. Since people hit with ball machines or pros their ability level doesn't make any difference. They have a ball and it's their fitness regimen three days a week, and the nice thing about it is that they have a lot more fun. I try to work out as much as I can, but I'd much rather be in that environment with a bunch of people running around than running on a treadmill. They laugh and giggle and just have a great time. They also develop relationships with other people in the group to sit down and have a cup of coffee afterward.
Ci: Is that social aspect, in looking at member retention and recruitment, even more important than it has been in the past?
We've coined a phrase at TCA that we try to be the third place in somebody's life. The first two being home and work, and it depends on which order people put them. We want to be number three, so you have to make sure that you can greet them by name so that when they come in the front door their friend is waiting in the lobby, not just a club employee.
Ci: As far as that greeting at the front door, staff training seems to be of high importance for TCA. It is especially interesting seeing as you who have grown through the ranks, which hasn't always been the case in the fitness industry. Can you talk about what TCA does in that area?
I worked the front desk as one of my first jobs. The key is to have the right person who's got the right attitude, and they're going to love what you do. I don't care what you do if it's not a lot of fun you won't do a good job. You've got to find out in the interview process if the candidate is the right person. Stick ‘em at the front desk, see what they do, how they react to people they don't know, and see if they are outgoing. Do they like to greet people? Are they smiling at people? These are important things. The rest you can train. The information they have to know is easy to train, the attitude and the personality are more difficult so you want to put them in that situation and see how they do. One of my rules is that if you don't have fun you're not going to do it for long and you're not going to do it well. So you've got to smile and laugh at the same time as you work hard.
Ci: That would eliminate some turnover of staff, which is a big one because it's kind of tough to make people feel at home if every time they come in there's different trainers, different instructors, different front desk personnel.
Sure. Something that we've done in the past in tennis is a program called “season court time” where you have the same court every week. We took pictures of the participants on the season court and put them in a scrapbook and when a new desk person started to work, they could look at the scrapbook and the pictures with the names underneath and know who's going to come in at six o'clock. It's unusual to greet someone by name you've never seen before, and that impresses people. But it's really easy [to impress] because the same people come in every Monday night at six o'clock, and the front desk staff gets to learn that. With a fitness component to our clubs it is a little tough to do, but the tennis makes it a little easier.
Ci: The fitness facility and club industry grew out of tennis in a large part. How big of a part does fitness play vs. tennis for TCA? Is it a help to have that tennis aspect or is it something that a pure fitness facility might try to compete against, saying that they're a tennis club that just does fitness?
We were a tennis club that did fitness. We went from a situation where 100 percent of revenue was from tennis to the point now where about 30 percent is from it. So today we are a fitness club that does tennis. It is nice for our members to have the ability to cross-train and have fun whether it is taking a class, lifting weights or playing tennis. There is a nice interchange between fitness and tennis.
Ci: How do you structure the dues at your clubs? Is it a bundle or is tennis an extra profit center?
There is a regular membership fee for the club and then members pay court fees. One of the things we do every year is a program called Tennis in No Time, during which we try to get a lot of our fitness members involved. We try to put about 500 to 600 fitness members into this program where they can learn to play tennis. This way we develop tennis players from our membership base. One of the reasons that our tennis business has stayed so strong is that we've been developing players for 20 years rather than waiting for them to walk in the door.
Ci: How important is the corporate fitness management portion of your business and do you see it growing?
It is an integral part of our company that accounts for about 15 percent of our business. We do major corporate centers such as McDonald's, Kraft and Traveler's. We also have a project with General Motors in Detroit that will hopefully expand to a second site. What they provide is another advantage for us with minimal costs. We have long-term clients that keep renewing, so I think that speaks to the job we do for them. It'll be interesting to see how companies pick and choose where they cut their dollars in these tough times. Only time will tell what kind of importance the health and wellness of employees is for them.
Ci: What types of growth training and career track does TCA provide?
We have a desire to provide a career path for somebody. Of all the upper management here, almost all of us were lower-level employees of TCA at one point. That helps to let staff feel that “it happened to them it can happen to me” mentality. There are a couple of reasons why people stay at a company. Number one is that they are being treated fairly, and number two they feel they are provided an education and a chance to improve their knowledge and their chance for growth. Of course, you have to pay them, but that isn't always the most important factor for staying at a job for the long haul. That is why it is important to constantly train and educate people to not only do their current job but to grow into new responsibilities. Not everybody wants to grow into more responsibilities but if they do we provide the tools for growth. One way we do this is through a professional development account. Each person in the company has the ability to apply up to 6 percent of annual income toward education, be it classes or conventions and we pay two-thirds of the costs. We also have TCA University, which we started about eight years ago, that provides a core curriculum from budgeting to hiring to sales to fitness and tennis-specific courses all at no cost to the employee. If a person does well at their current position and wants more responsibility we help them develop the skills to do well at the new position.
We are lucky that we are in the position to do this. It is hard to provide a growth track for employees unless you have a number of clubs where you can put them to work. When I started here 28 ½ years ago with only two clubs and working at the front desk I never thought of a career track.
Ci: What are some of the biggest changes in the industry looking back to those early days and what do you see happening in the next few years?
The competition is far greater, as is the amount of money it takes to open and run a club. Part of that is because the sizes of the clubs have grown. People are building clubs that are more than 100,000 square feet and that just wasn't done 10 years ago. There are also fewer indoor tennis courts being built — we built eight last year. There is a statistic that says that there were more golf courses built than indoor tennis courts. Tennis was overbuilt 10 to 15 years ago and has dwindled as clubs converted space to pools, racquetball, what have you. Looking to the future, I think clubs will become more of that third place in your life, kind of like the way the mall has become. Now you go to a mall and there is dry cleaning, places to get your nails done, go to the movies — more than just go shopping. Clubs will do that too. There will be many of those elements, maybe a Starbucks and even a car wash — it will be a real destination. Hopefully, the health insurance world will take a more aggressive role in rewarding people for being healthy by being fit by helping to pick up costs of memberships and reducing insurance costs. Also, I think certification will take on greater importance. Right now there are about 275 certifications for fitness. Some aren't anything more than sending $39.95 and taking a test online. I think it is important for them to get more professional so there are only five or 10 good certifying bodies. There are two that do tennis but the need isn't as great as it is with fitness where there is so much more to know and so many more potential problems. Lastly, we are at about 11.5 percent of people that belong to a club. If we could take that to 20 percent, just think of the number of fit people we could have in our fitness and tennis clubs.
Ci: Where do you see tennis going in the next few years?
There are a couple of things. The U.S. Open finals this summer had great ratings success, so people are watching it. Alan Schwartz, CEO of TCA, will take over as president of the USTA in January and will have some influence on the tennis industry. I think you will see tennis surge as Alan looks at the USTA with a business eye coming from the club background. I think you'll see the Tennis Channel on cable and satellite. The pros could be more outgoing and give back a little more but the USTA has done a good job of building and marketing the game. The U.S. Open makes about $110 million and they will pour a lot of that back into the game.
Ci: You spoke about the costs of opening and running a club. How vital of a role will the financial community play in the continued growth of the industry?
There will always be mom-and-pops in the industry. If people have a passion and are on a mission to be successful — they will prosper. Whether it is tennis or fitness they are people that love the activity and want to own their own business. What I see from the financial community is the tightening of money. Three or four years ago it was pretty easy to get. Today, that is not the case. The banks are having too many loans go bad so they are more stringent. That will hurt the small companies, but the larger ones will be hurt as well. You used to see a lot of clubs bought out, but you haven't seen that nearly as much these days. That is because the money is tighter and is keeping smaller clubs in business longer. Out of 14,000 or so clubs there are few that are actually parts of chains.
Ci: Does that fragmentation of the industry hurt when it comes to influencing the insurance companies, government, Wall Street, etc.?
We are a young industry without a lot of clout because we don't have that kind of volume. IHRSA has lobbyists but not the 100 that companies like GM has. It is important as we try to level the playing field with non-profits, which is a major battle for large chains and mom-and-pops. Nobody is against competition as long as the playing field is level. When a non-profit puts a commercial club out of business it is different than when one club puts another out of business because they are doing a better job of playing on a level field.