Title
Sportsplex Membership Fees
History
The Recreation Department constantly monitors Fitness Center memberships at the Sportsplex to understand our customer base and continue to expand the market we draw from. Sportsplex derives revenue from memberships and also from gym and field rentals, programs held at this facility and through partnerships with organizations who call Sportsplex their home.
The fitness center memberships are an integral part of the operation of this important facility. The number of active memberships changes daily with expiration dates occurring and new membership purchases each day. Because of the constant fluctuation and the wide array of membership types, it isn’t always easy to identify trends. What has become evident, however, is that the number of non-resident memberships and corporate memberships has steadily declined in recent years. These membership types can both be broken down further into sub-categories such as “Family”, “Individual” and “Couple”, however for this discussion they have been grouped into the broader category types. This discussion is intended to offer options for addressing the aforementioned decline while maintaining the integrity of the fee structure and ensuring that the rates stay consistent with the surrounding market.
The spreadsheet marked “Attachment A”, illustrates a comparison of Non-Resident Members and Resident Members. The chart illustrates a 54% decline in Non-Resident Members as compared to just a 5% decline in resident members from 2005 to 2011.
“Attachment B” illustrates a comparison of Membership Revenues from the same time period and includes projected 2012 year-end revenue. The chart illustrates the change in revenue from year to year taking into account a fee increase in early 2006 and a 15 month fiscal year in 2009. The decline in revenue is steady with significant decreases in the toughest economic years.
Since 2005 the fitness market has increased with many large and small fitness facilities both public and private that compete for the very same customers. The Recreation Department surveyed several municipal facilities (in blue header area of Attachment C) to determine if the membership rates were appropriate. Of note, the Tinley Park Park District recently made non-resident fees the same as their resident fees to further appeal to those outside the district. The new facility expansion at Tinley Park will further make their facility attractive to those who reside on the south and east sides of Orland Park.
Fees at private facilities in the Orland Park area were also reviewed and are outlined in Attachment C (green header area). For all facilities, it is important to review the membership types and rates as well as the amenities offered (pool, childcare, group fitness, towel service, etc).
The focus on developing non-residents and corporate customers for the Sportsplex will help ensure that the facility stays competitive and continues to build the membership base. Staff is suggesting a revised fee structure as outlined in Attachment D. The proposed rates include a 10% reduction in Non-Resident rates to bring Sportsplex fees more in line with other area fitness centers. Corporate memberships have consistently been the least utilized membership over the course of the last seven years.
Bringing the Corporate Rate in line with Resident fees is proposed in order to attract the business community to join Sportsplex and taps into a market that is well established in Orland Park, but which has not been our focus in attracting new members.
As part of the proposed Corporate Rate, the Recreation Department is preparing a 2013 outreach plan to touch the business community including through the economic development partnership with the Chamber of Commerce. Staff is defining a program for businesses that would utilize Sportsplex and the expertise of our staff to develop wellness programs and incentives for area businesses. Incentives will be offered to businesses with multiple employees purchasing Corporate Memberships.
The budgeted revenue for memberships in 2013 was estimated conservatively given the trends seen in recent years. By offering the revised rates and implementing the new approach to Corporate Memberships, staff believes that we can exceed the expected revenues and make a marked shift in the current trend.
As people add back amenities such as fitness memberships this winter, the timing on changing the fees is recommended to coincide with the new year. To bridge the difference between the current and proposed rates, revenue of approximately $12,522 will need to be realized through the new memberships. This means attracting some combination of memberships such as those outlined in the green box on Attachment D. Staff believes that capturing these additional memberships is very attainable and would expect to exceed these numbers with attractive and appropriate new rates for these categories.
Should the Village Board approve the proposed rates for Non-Resident and Corporate Memberships, the new strategy would go into effect January 1, 2013.
On December 3, 2012, this item was reviewed and approved by the Parks and Recreation Committee and referred to the Board for approval.
Financial Impact
Sportsplex membership revenue in 2013 is expected to increase by offering competitive non-resident and corporate rates and by employing a new marketing strategy to attract Corporate customers.
Recommended Action/Motion
I move to approve the revised Sportsplex non-resident and corporate rates effective January 1, 2013 as presented.