Health club operators looking for ancillary revenue have several technology options available to them, including cryotherapy and electronic muscle stimulation.
Drive495 in New York City is one health club that offers cryotherapy – the practice of applying extreme cold to the body to aid physical recovery – to its members and non-members as a form of ancillary revenue. (Photo courtesy Drive 495.)
Cryotherapy is getting closer to the edge of what it can become, including in the health club industry, according to Impact Cryotherapy CEO Richard Otto.
"Today if you walk out on the street, nine out of 10 people have never heard of it (cryotherapy), but it is growing," Otto said. "It's a fun business to be in and really fits with the remaking of a lot of clubs."
Cryotherapy – the practice of applying extreme cold to the body to aid physical recovery – is a recovery tool that replaces ice baths for athletes and helps any exercisers needing recovery, Otto said. It has been around for centuries, but modern technology now allows health club operators to offer it to members for ancillary revenue.
Cryotherapy is not alone in the technology space where hydrotherapy products, electronic muscle stimulation and advanced physiological diagnostic tools are creating opportunities to drive profit beyond personal training and memberships.
Atlanta-based Impact Cryotherapy manufactures octagonal-shaped cryosaunas that can be purchased for approximately $50,000. Users typically pay about $40 for the three-minute session that requires approximately $5 in liquid-nitrogen supply per session, Otto said.
Otto pointed to California to illustrate cryotherapy growth. When Impact Cryotherapy was founded in 2013, four cryotherapy locations existed in the state, Otto said. By the end of 2016, that number had increased to 45 Impact Cryotherapy locations alone, including health clubs, massage operations and sports chiropractic providers. Impact Cryotherapy has sold more than 300 total units to date. About 15 to 20 percent of the company's inbound requests come from health clubs, Otto said.
In December 2015, Drive 495, a performance training facility in New York City's SoHo neighborhood, converted a 10-by-10-foot office space inside the club into a cryotherapy space.
Before purchasing the cryosauna, Drive 495 owner Don Saladino read up on the technology and any possible downsides to offering it. He came across media reports about a 24-year-old trained cryosauna operator in Las Vegas who died from a lack of oxygen while using a cryosauna.
That did not stop him from investing in the technology.
"If you're following correct protocol, there's no reason why you should have any mistakes," Saladino said. "… You have to train your staff. You have to make sure that kids aren't operating this. You have to have protocols and safety measures that you follow."
Saladino along with his brother and co-owner Joseph Saladino, the Drive 495 front desk staff and the club's coaches received cryosauna training. For a month, the trained staff did trials on themselves and members. They reviewed safety protocols, including not allowing anyone who had consumed alcohol to use the product, and posted those protocols on the wall inside the cryosauna room.
The cryosauna at Drive495 is equipped with a shutdown safety switch in case the user does not hit an OK button every 30 seconds. The existing liability insurance at Drive 495 covers the club in case of a cryosauna injury and costs the club approximately $3,000 per year.
The cryosauna differentiates Drive 495 in the New York City market where the recovery modality is important and the speed of a three-minute session is appealing, Saladino said. Drive 495 averages 100 weekly cryosauna sessions, charging $45 per session for all first-time users, $75 per session for members and $90 per session for non-members.
Allowing non-members to use the cryotherapy gets potential members in the doors and introduced to the other club services, Saladino said.
"This is a very important amenity to what we do, but it doesn't make up our entire business," Saladino said. "Would I go open a cryotherapy facility? No. Would I put it in another gym that we're opening? Absolutely. Hands down."
And that could be coming soon for Drive Clubs. Saladino has two clubs open and plans to open a third club. The Drive 495 facility, which opened 12 years ago, has the cryosauna while the second location in the Kip's Bay neighborhood (Drive 443) does not, but Saladino said he hopes to offer cryotherapy at future locations.
Muscle Technology Changes Member Conversations
Like Drive 495's cryotherapy venture, Denver-based e3 Fitness found success in generating ancillary revenue with technology used by some collegiate athletic programs and professional sports franchises, including Major League Baseball's Colorado Rockies. The technology – MuscleSound – is an ultrasound diagnostic tool developed at the University of Colorado-Boulder that provides precise body composition, muscle and glycogen measurements.
For e3 Fitness owners Clint Gehde and Justin Holle, MuscleSound changed the conversations with the established members and aided retention at the 6,000-square-foot performance training facility.
"It's been more of a tool within our community to keep them connected to the results," Holle said. "It ultimately removed the emotion that became associated with performance testing. Now we don't have to have this emotional conversation based on you believing it. We get to say 'That's what it is. What do we need to do moving forward? Let's go to work.'"
MuscleSound CEO Andy Jackson views the company's product – a web-based platform connected to an ultrasound probe – as the logical next step to the wearable fitness tracker explosion. A trained operator puts gel on seven distinct points on the member's body to take measurements in under 10 minutes.
"We specifically show them muscle mass," Jackson said. "We can show if it's contracting or growing, which has significant effects in the senior population as you get older. So we feel what we've done is we're looking around in the very fabric of the muscle and linking it to health and wellness coaching."
The digital technology replaced using plastic calipers for body fat measurements at e3 Fitness at the end of 2015. Those calipers, now tucked away in a cubicle behind Holle's desk, caused some members to lose confidence in body fat testing because the measurements varied depending on the staff member using the calipers, Holle said.
"We literally saw our [body fat testing] numbers going down," Holle said. "When our long-term members were not testing, not seeing data, results or ways they're getting better — then they're only out here for the community workouts. That's one unpleasant workout and one injury away from pausing their membership. While it seems like an inconsequential thing – people don't like calipers – it really became a big deal. We were losing our hooks in people that testing provides and results provide."
Prior to adopting the digital technology, less than 25 percent of the club's long-term members did performance testing, but that jumped to 60 percent with the new technology and that percentage has remained consistent, Holle said.
e3 Fitness includes three of the scans per year for its $300-per-month, small-group training membership. Additional scans are offered to those members and the $100-per-month, large-group training member at an a la carte rate.
e3 Fitness' pays a $180 monthly service agreement to MuscleSound for unlimited body composition scans and a monthly rental fee to use a MuscleSound tablet (instead of purchasing a tablet) for a total monthly cost under $500, Holle said.
The price club operators pay to use the technology differs depending on many variables, according to MuscleSound.
Holle, Gehde and the coaches at e3 Fitness received two hours of software training and shadowed a trained tester for 50 to 60 scans and 20 practice scans before doing testing on a member on their own. A single day launch event drew 117 members. Each e3 Fitness staff member needed about 100 scans to become "supremely confident" in their ability to take usable images, Holle said.
After the measurements are taken, the ultrasound data is sent to MuscleSound. Within minutes, the club and the member receive a MuscleSound and e3 Fitness branded e-mail dashboard. Beyond body composition testing, some members found value in glycogen testing.
"The people that want it for the glycogen testing are my people who are event-focused and goal-focused like a triathlon, marathon or half marathon," Holle said. "That's the person we really push the glycogen testing to. Basically, they can have the confidence of knowing they are on the right taper program, their nutrition is working right and they've got all of these pieces in play at the starting line."
Holle added: "For me it's all about one thing: how do I keep enhancing this box so more people want to do more in here?"