Leisure Sports, Pleasanton, CA, has created a unique hybrid business: a hotel and a health club that operate as one business. Two such hybrids exist within the Leisure Sports brands, which also include five ClubSports and The Studio. The hybrids are a Renaissance ClubSport in Walnut Creek, CA, and a Renaissance ClubSport in Aliso Viejo, CA.

"We operate on one spine—one general manager, one sales leader, engineering, housekeeping, food and beverage, all the same, supporting both ends of the business," says Brian Amador, general manager of Renaissance ClubSport Walnut Creek and director of hotel and club operations for Leisure Sports.

Guests of the hotel can use the fitness center free of charge, Amador says. Leisure Sports management wanted to develop a concept where hotel guests felt like they were staying at a nice club, he adds. Combining the two businesses allows the company to deliver an upscale experience that includes a full restaurant and banquet space that members can use and rent, a full day spa and other offerings that are difficult to provide in a club-only environment.

Leisure Sports created this model after developing and managing a Hilton location that was connected to the ClubSport Pleasanton facility that Leisure Sports also developed and managed. At that time, the club was called the Amador Valley Athletic Club (AVAC). The club and the hotel were connected by a walkway, and the properties shared meeting room space. The hotel was later sold, but it remains connected to the club so Hilton guests can have ClubSport access. While managing both the club and hotel, Leisure Sports saw that running a full-service hotel was much like running a full-service, high-end athletic club, Amador says.

"We hire the same kinds of people for both sides—the customer service bias, outward warm personality, tempered with service humility," Amador says. "And we want the same end result. We measure retention and attrition in the club world. And in the hotel world, we measure intent to return. That's the same type of money question and money answer at the end of the day."

The Renaissance ClubSport locations brought in about $24 million each in 2012 compared to an average of $13 million each for the other ClubSport locations, Amador says.

"We are able to drive rate premium out of our hotel rooms because they have access to our club, so it is a good financial model," Amador says, adding that the club insulates against the shifts in revenue that hotels can have due to the economy or business moving out of the area. "A hotel can be very volatile, and the club can be very stable."

The Renaissance ClubSport facilities are part of a franchise arrangement with Marriott International, which owns the Renaissance Hotel brand. Leisure Sports and its investors own the Renaissance ClubSport properties and buildings.

The Walnut Creek, CA, Renaissance ClubSport location opened in 2003 with a 175-room hotel and an 85,000-square-foot fitness center that now has 4,800 members. The Aliso Viejo, CA, location opened in 2009 with a 174-room hotel. It now has 3,800 members at its 85,000-square-foot fitness center.

Despite the success of these two locations, the planned growth of 14 additional Renaissance ClubSport facilities by this year has not happened, but that was due to the recession, Amador says. As the economy has improved, Leisure Sports has started looking at other locations to develop, but the capital markets have yet to return to investing in new build hotel products, other than in primary cities such as New York, Amador adds.