‘Hoping that gyms will be loyal to squash is wishful thinking’
By EDUARDO ALVAREZ – Squash Mad Columnist
I am writing from the squash ghost town of Toronto, Canada. As COVID-19 continues to keep our sport on pause, and I look at the struggles of non-profit, squash-only clubs, it might be worth taking a deep dive into the health club business.
Let’s first look at the types of facilities or clubs where squash exists in North America. Affordable squash is generally available at three types of venues:
1: Municipal recreational or leisure centers
2: Commercial independent and chain gyms
3: Non-profit, volunteer squash clubs
Other squash venues, like exclusive private clubs and academic institutions, are generally not open to the public at large.
In your local commercial gym and recreation center, squash is a side offering and not typically run as a business with a separate focus on profit and loss. It is also not a huge profit center. In recent history, squash has not had to be a proven business with return on investment (ROI). The sport’s existence has been supported by the more lucrative and universally profitable fitness offerings and sometimes tennis.
In today’s market, we have an assumption that our courts will simply continue to exist in these environments, magically paid for by a third party, and we are stunned when they are removed. As these courts disappear, in ever-increasing numbers, so too does affordable and available squash.
As a side note, there also seems to be no awareness of these closures and court removals. Squash focuses publicity on elite groups, coaching academies, tournaments and talent pathways. But court closures are always accompanied by an embarrassed silence.
It’s the big elephant in the room for nearly every squash federation. The removal of two courts in a commercial gym is a big deal when they are the only courts in the area. This is erosion; quiet and subtle.
Right now, squash courts that are affordable to those on modest incomes are disappearing much faster than the shiny, expensive, bespoke facilities being created for elite college players and small urban academies.
Hoping that commercial gyms and recreation centers will be loyal to squash is wishful thinking. They are businesses, and will simply respond to market demand in terms of additions or changes to their offering. Squash courts can be removed as easily as dated fitness equipment.
This means that our sport has little control over our fate in these environments. We are merely a side offering that can quickly be replaced for other more popular activities. The addition of squash courts to new gyms and recreational facilities is, therefore, also out of our control.
Our sport is on the chopping block with lucrative, paid-for group training, functional personal training rooms and indoor cycling being on trend. Our beloved squash courts are perfect for these uses.
In some ways, squash has never really proven to be a successful commercial model, which can be repeated, franchised and copied. We seem to have existed in other facilities, as I say, merely as a side offering.
Our non-profit clubs are often not run as a “business” and are subject to the direction of volunteers, who may have personal agendas or lack experience in the health club space (or any kind of club management skills). Or they treat it simply as a hobby. Or these clubs may be hijacked by parents, whose priorities are to provide benefits for their own children rather than attempting to grow the game or the club.
So, where are we? North American recreation industry insiders like IHRSA and SGB are reporting significant decline in squash participation pre-Covid. This means that investors and municipalities will be reluctant to include squash courts in any new projects and will likely continue removing them.
— The News with Shepard Smith (@thenewsoncnbc) April 17, 2021
To add insult to injury, pickleball and padel are exploding and show no signs of slowing down. For those who think this is not a threat, it might be worth thinking of it in these terms:
Casual players keep volume up to support the need for courts. If a club has 200 casual squash players, and 10% decide to switch to pickleball or padel due to injury or age, the club now has to sign up 20 new players just for the membership level to stay flat.
Pickleball will continue to scale and open facilities in every community. These players will create demand in local gyms and public tennis courts, eventually building out their own facilities.
This is already happening, with two distinct business models, one led by commercial chains and the other by community groups providing much of the labor costs for free. And don’t think that pickleball is for retirees in Florida. It has captivated young and fit racquet athletes resulting in a pro tour covered on ESPN and CBS.
Last week’s US Open Pickleball Championships in Florida attracted 2,600 players and 13,000 spectators. It was promoted as “the biggest pickleball party in the world”. In contrast, I recall the first million-dollar World Squash Championships in 2019 taking place inside an icy-cold Union Station in Chicago with daily images of rows of empty seats.
At club level, all this means is that squash stakeholders need to start figuring out models that work and perhaps partnering with other sports like pickleball or fitness.
This also means learning the club business.
On this note, the gym business seems to breed entrepreneurship, with sales staff often learning the club business and then opening their own shop. Our best and brightest in squash seem to gravitate to coaching and the coaching business, but rarely the club business.
Without this drive to open clubs from within the squash community, we will continue to be at the whim of other facilities and continue to see this quiet erosion.
With this in mind, here is a general overview of the club business:
For any club to work, there needs to be significant volume to justify the ever increasing overheads like rent, utilities, wages, repairs and maintenance. This is best achieved through achieving optimal “members per square foot”. To hit these targets, clubs are in a monthly battle of losing members and making up those lost members.
To win this battle, clubs need to advertise aggressively and constantly, by all means possible. Any and all outreach is good outreach. Volunteers often don’t realise just how much constant daily focus and attention must be given to this aspect of the business.
You’ll hear things like, “we tried a mailer last fall” or “we went to the local schools”. These statements imply that these outreach efforts were one-offs now and then and not part of a daily, weekly grind. Mailers and targeting schools would be part of any gym’s daily pursuit of members; just another day in the sales office.
Understand this: the club business is an advertising business.
Along with attracting people to the facility it is important to understand the needs and lifestyles of the customers. This is where squash is often off the mark. Here is an example:
The majority of people have very little time for hobbies and recreation.
Many people have health issues like weight problems or chronic joint injuries.
Most people are concerned with weight loss or weight management.
Most people are not able to take on technical or overly athletic sports. If they are, they most likely already have their sport of choice.
People are looking for casual fun and social connection.
People have budget concerns regarding their hobbies.
This is where pickleball has been right on point either by intention or by happy accident. The sport ticks all the boxes. It offers easy to learn, casual fun (not too technical), moderate exercise (weight loss), it is highly social with doubles and round-robin formats, and it is affordable. (The same can be said about padel).
By contrast, squash clubs often focus on competition, leagues, technical training and these buzz words: “academy” and “high-performance”. The high-intensity, physical nature of the sport has been the focus, along with a more technical mindset. New players’ gateways are afterthoughts and clumsy, if they exist at all. Little thought is put into this growth side of the business. Essentially, most clubs appear to be running a technical coaching business.
There is nothing wrong with the coaching business, but it is NOT the club business.
The Forbes article from 18 years ago is often used for marketing material. We sell intensity and brag about our sport being brutal and “the toughest”. Our governing bodies have also bought into a belief that a top-down approach to growth is the best course of action. “Once we are in the Olympics….” or “Once PSA is on TV”. Simply put, it’s all about technical and high-performance … exactly what NOT to advertise to the general public.
Again, with pickleball we have seen massive growth (even during a global pandemic) with no Olympic exposure, no junior academies and no pro pickleball on mainstream TV.
We are even seeing pickleball pioneers building courts in empty shopping malls now that so much of the retail business has moved online and stores are closing. Is anybody doing this in squash?
But, of course, due to bottom-up recreational growth, pickleball has already signed with ESPN and appeared on CBS. Essentially, with mass recreational appeal comes viewership demand for pro pickleball. This is exactly opposite to the mindset of most of those in squash.
If we feel gutted because breakdancing beats us to the Olympics, how will we feel when pickleball or padel get in before squash? Pickleball has already beaten us to getting on TV.
So let’s unpack what squash clubs tend to focus on within their walls. The culture of our sport has been focused on pro squash, high-performance, academies, tournaments and league play.
Just look at social media posts to get a feel for the direction of our sport. A pickleball post might be “cowboy hat day at the club” or “sweeping the snow off our courts so we can play” but a typical squash post would be: “train like a pro with our HIIT session!”
The club business versus the coaching business:
A club will hire a pro, often with a base salary and split on lessons and programs. 90/10 or 80/20 for the pro or often 100% meaning zero income for the club that provides the facility.
The pro will often do what they do best and devote the bulk of their time to technical coaching. For example, they may run two nightly group junior sessions a day and private lessons resulting in roughly 25 hours or more on court. Being on court, is the highest revenue source for the pro, especially with more lucrative group sessions. Subjectively, pros tend to like the technical and competitive side of the sport, which is why they became such great players.
Often, the club volunteers will offload the squash program to the pro with some loose or general mandates. The contracted pro will then run a junior academy, offer private lessons, manage teams, internal leagues and do some external marketing.
This is where it is important to understand the difference between “the coaching business” and “the club business”.
The coaching business focuses on a percentage of people, wanting technical training, who usually have some interest in competition. This is especially true for junior academies with eager parents hoping their child will compete and grow through mastery of the sport. This technical need is a niche within the general public and within squash itself.
On the other hand, “the club business” needs a high-volume of casual people playing the sport for fun (members per square foot). The club needs to offer these people low-commitment ways to play and an easy pathway to fun and exercise. The club also needs to offer “non-dues” add-ons that are easy and bolster “revenue per member”.
You can quickly see how the interests of the coaching business and the club business may not be aligned. This is not to suggest that the coaching business is not valuable or needed, but it is not the main focus of the club business.
Let’s look at how some rough numbers might look between a high-volume club with casual players and a club with less focus on volume.
Super Squash Club with 4 courts
Membership rate: $100.00 per month
Junior Membership rate: $50 per month
Running at near full capacity with 360 members
Scenario #1: Revenue from club with high-volume casual members
All courts being used for casual play. (360 members playing an average of once per week or less)
720 available prime time courts
360 members x $100=$36,000 per month
10% taking lessons (36 players): $50 x 36 x 4 weeks=$7200 (net 20% or $1440 to club business)
Non-dues revenue (food and beverage, pro-shop) average $20 per month x 360=$7200
Total gross revenue: $44,640 per month
Scenario #2: Revenue from a club with focus on technical coaching with no focus on external marketing
100 competitive members x $100=$10,000 per month (No external marketing to casual players)
720 available prime-time court slots (120 for lessons and clinics, and lots of empty courts)
60 junior members at $50=$3000 per month
Private lessons x 20 per week: $50 x 20 x 4 weeks=$4000 (net 20% or $800 to club business)
10 junior clinics per week: $100 x 10=$1000 x 4 weeks=$4000 (net 20% or $800 to club business)
Non-dues revenue: 160 x $20=$3200
Total gross revenue: $17,800
This example illustrates that the club business should be focused on volume and not get sidetracked by the lower percentage of people who want technical aspects of our sport.
As well, attracting a customer to do something that speaks to their personal needs should be an easier sell than something more technical that requires more time and financial commitment.
Obviously, there can be overlap and a high-volume club will end up with both types, but the point is that the club business needs volume like a person needs oxygen. Too often, clubs get distracted by the action and successes of the coaching business within the club business.
Junior academies, winning league teams and tournament results are all great but they are not the core lifeblood of the club business. A club may look successful with a noisy junior academy and busy league night, but the revenue might tell another tale.
Again, the club business needs to appeal to the widest demographic possible to attract the highest member per square foot count. Knowing the needs and habits of the average consumer, the club business needs to appeal to casual players looking for low-commitment fun and weight loss. The club business needs to offer secondary, easy, low-commitment, casual non-dues revenue streams.
The technical coaching business can certainly and should exist within the club business, but it is not the core engine of the club. It may feel like it, but it is a secondary revenue stream which can often distract from the task at hand, which is relentless marketing and appealing to volumes of casual players. Furthermore, a healthy club business will fuel the coaching business as a larger base of casual players will result in a few venturing into more technical and competitive play.
Expecting a technical coach or club pro to run the club business may not be the right solution, although it seems so on the surface. The pro is passionate about and knows the sport! But, considering 25 plus hours on court, management of parents, a technical mindset and coaching at events, it may be tough to focus on relentless external marketing to add casual players. As well, there is a mindset of a coach who is often looking for results, technical improvement and mastery.
Yes, some coaches may only care about casual players or some may do both, but the club business requires complete focus on volume and casual play. The pursuit can’t be a side aspect of the club business; it IS the business!
Are you running a coaching business or a club business? This may help thinking about your club in a new way:
Step #1 Get a handle on all numbers and monitor them weekly. Don’t be distracted by how the club feels. A busy league night does not tell you that your club is healthy in terms of revenue. It “feels” busy is not data:
How many members per court?
What percentage of members take private lessons or group clinics?
What is the net profit for these programs after coaching costs (base salary and coaching fee)?
What percentage of members play competitive squash?
Average weekly court bookings per member
Current membership count number of junior members versus adult members.
How many players canceled?
Why have they left?
How many new members?
Is your club at maximum members per square foot?
Where is the club energy focused: junior academies, tournaments, league teams?
How many courts are used for technical training versus casual play?
What gateways and programs are there for new casual players?
What relentless daily advertising is being done to attract new players? (Social media ads, cold calling, corporate and community outreach, mailers etc)
What extra activities (and potential revenue items) are available for casual players?
If clubs focus on external marketing, they should be able to grow membership. I also believe that if some pros moved from the coaching business to learning the club business, we might see some resurgence.
This is largely how so many gyms open up, with gym sales people learning the marketing and sales engine of the business and venturing out to open their own club or chain of clubs.
This could happen in squash if our pros shifted to learning the club business, as many of them are smart, passionate, engaging and high-energy people. There have been a few examples of this and there could be more.
Perhaps the time is now, to shift focus and build our club businesses.