Urban Sports Resorts Are Closing the Gap Between Fitness and Hospitality

As Equinox remains mum about the planned opening dates for hotels in New York and Chicago, and while Hyatt is still working out how to integrate its recently acquired Exhale Spa with the brand, separately, a couple of properties have made strides in developing high-end urban sports resorts.

The models could serve as interesting case studies for other companies looking to bridge fitness and hospitality, while acting as a “third space” for the local community.

Perched atop the newly renovated 100,000 square foot Midtown Athletic Club in Chicago sits the even newer Hotel at Midtown. Opened in November, the 55-room hotel caters to an upscale crowd, as does the club below.

Steven Schwartz is president and chief executive officer of Midtown Athletic Clubs, a company consisting of eight fitness facilities in the United States and Canada.

Schwartz’s father founded the company in 1970. When it started, it was primarily a tennis club (called the best tennis facility in the country by one Billie Jean King). However, when Schwartz the Younger took over the company in 1987, he expanded the concept, adding more fitness classes and equipment to the mix.

In 2017, the Chicago club added spaces for disciplines ranging from yoga to spinning to boxing — and, most interestingly, a hotel.

A New Type of Hotel

According to Schwartz, it was a conversation with the chief executive officer of Wilson Sporting Goods (who happens to be a club member) that sparked the idea of a hotel.

The CEO suggested the area was perfect for a corporate office, but there wasn’t a hotel nearby.

“A lightbulb went off in my head,” said Schwartz. “Essentially, this area of Chicago was a hotel desert, and the community could really use a hotel.”

He realized the combination of an athletic club/hotel could become an urban sports resort, perfect for staycations, vacations and executive retreats. So, even though Schwartz had laid the foundation for the new club, he decided to alter the original plan.

Schwartz has a degree from Cornell University in hotel administration and had spent several years as an analyst for Laventhol & Horwath, and as director of development for Hyatt, before joining the family business.

“I wouldn’t have taken this on had I not previously been a hotel developer,” said Schwartz. “I would have been too scared.” But given his experience, he decided to proceed, knowing the infrastructure needed to support a hotel was already included in the design of the club. “We had the laundry, the restaurant, the front desk (for checking in members), the full-service spa, the back office… all I was adding was rooms. So, there would only be a marginal additional cost to running a hotel.”

Despite being a one-off, Schwartz has decided not to affiliate with a flag or a soft brand, and isn’t giving discounts to online travel agencies. “We don’t need to at this scale,” says Schwartz. “We have a giant membership footprint (14,000 members at the main facility and 50,000 across the company), which creates a built-in presence that a soft brand doesn’t have.”

“With a small number of rooms to fill, a large number of local members, and out-of-town members who serve as a built-in referral network, the discount a traditional hotel would place on OTAs is given [instead] to our members and their friends and family.”

Schwartz views the hotel as an enhancement to the club. According to Schwartz, “We consider ourselves six percent hotel, 94 percent amenity.”

Boutique Fitness

Schwartz’s approach also ties in with what others in the hospitality industry have said recently about how consumers view fitness and its delivery of experiences. Michael Achenbaum, co-owner and president of Gansevoort Hotel Group, sees boutique fitness clubs and membership programs as demonstrative of where hospitality could be heading.

“To me, it shows that people are prioritizing that experience over other things… they would rather have that private boutique gym experience over a mass gym, and now mass gyms are trying to do their own versions of these spin classes or boot camps to be more competitive and grab back the market share they’re losing. That’s what happens in hospitality.”

Combining hotel, fitness and a private club concept isn’t confined to Chicago, of course. It’s happening in Miami as well.

1 Hotel South Beach is part of Barry Sternlicht’s SH Group. Sternlicht himself is a fan of the Spartan Race, an endurance obstacle race phenomenon. At the end of 2016, the South Beach hotel added a 14,000 square foot Spartan Gym, which features obstacle training and bootcamp classes along with more traditional exercise options.

Locals can join a club that gives them access to the gym and the hotel’s pool and beach, as well as other membership privileges such as free valet parking, and discounts on rooms, spa services and food and beverage. There’s also the added third space twist of curated programming for members, including invite-only art exhibitions, concerts, culinary experiences, and interactive conversations led by global thought leaders.