After assessing and consulting some of the most important sports clubs and resorts around the world I felt it was time for me to speak out and share my concerns about what I find to be the reasons why many big clubs and resorts might go out of business in the next few years.
1. Complexity of Operations
Clubs and Resorts use outdated systems to run their operations. The most important and common software today started their journey more than 15 to 20 years ago. While these systems were a great solution until a few years back, today they seem to become very unfriendly and sometimes even obsolete to what we need for the industry. The reality is that the industry evolved, and so did technology. What was essential 10 years ago is different today. While this software did not do much to adjust to the trends, clubs and resorts had to.
Talking to sports clubs and resorts we noticed that in order to be able to do everything required, these businesses have been forced to implement multiple solutions into one. Unfortunately, with this strategy, the internal processes of scheduling, booking, resources and payment management became very inefficient and unfriendly. Some of these operations are reluctant to change and they lose money on extra staff and potential revenue not being earned.
Consequently, a very typical scenario is management using a very complex system and staff adopting more and more of excel, WhatsApp or other similar solutions. This makes things worse since often numbers do not match, and many extra steps are added to everyday’s work.
2. Lack of Accessibility
Because of complexity and different systems being used to run a club or organization, programs and activities are not instantly updated and not accessible to both clients and staff. Because of this reason businesses miss out on a big opportunity for revenue since clients cannot book directly. Also, staff cannot assist the clients immediately since everything related to that action has to be updated onto multiple systems.
3. Unreliable Numbers
During the last few years, the amount of data we need in order to operate a business has increased exponentially. We need more and more data about clients, staff, schedules, and payments. The software these businesses use is old and very unfriendly. For this reason, as mentioned before, personnel must collect information mainly by using WhatsApp and excel. Data must be copied from file to file and system to the system before it gets to the elaboration stage. Also, in order to save time staff often “wildly” guess the numbers and results about clients. This information is highly inaccurate and inconsistent and makes forecasts and predictions wrong. To make things worse, many businesses allocate their resources based on these predictions, and they even hire extra staff based on these numbers.
For this reason, we see clubs running restaurants with too much or too little staff or organize events when they clearly should not. It is incredible to see that in many cases management is not even aware of this problem.
4. Waste of Resources
Let’s recap for a moment. Recreational clubs have complex systems that do not allow clients to book the club’s services easily and require more staff than ever before in order to manage data through inefficient administrative consoles. Clubs spend money on digital marketing, but they do not offer an easy onboarding of clients through their website or app. 90% of clients prefer mobile applications over websites and most of the clubs do not offer a booking application to their members.
Furthermore, most of the clubs I have been working with have financial issues, which means revenue is not as it should be and/or costs are too high. Both things can be solved by having a proper digital solution.
In fact, revenue will go up if clients have instant access to your services and products. It is not a secret that we are in the era of instant access. Often clients are not willing to spend more than 10 seconds in order to book a service at your club, and we have businesses that require more than 5 minutes for a client to complete an inquiry. Don’t you think that is too much? Clients seek convenience and will move to clubs where convenience is available, and once they are gone it is difficult to get them back.
What about costs?
While businesses can decrease some operational costs, the biggest expenses clubs have are staff and rent. I cannot say much about rent, but I can tell you that during the last 10 to 15 years clubs have hired many people working in administration. It does not make sense that a business that primarily focuses on customer satisfaction has so many people in the administration office. Clubs and resorts should have more personnel working to serve clients rather than helping with the inefficiency of the operations.
5. Control and Transparency
I wanted to share with you a couple of examples I ran into.
– A resort has leased out 6 tennis courts for the last 10 years or so. The lease was not producing enough revenue on such valuable land and taking those courts under the resorts’ control would have been too big of a challenge for them. For that reason, the resort management has decided to replace those courts with something else. The reality is that this resort did not have any knowledge of the consequences this action would have created. Their software has no possibility to track this kind of information. After talking to the company leasing the courts, I came to realize that the main reason the hotel was getting bookings in the offseason was because of those 6 courts. In fact, the booking of the tennis courts and related classes is not interconnected to the management console and clients, and for this reason, management was about to make a mistake which would cost them a lot of money.
– Another hotel has mentioned that their facilities are running at full capacity, their spa and tennis are not generating enough revenue, their memberships have decreased, and for this reason, they do not want to invest in activities anymore. They simply decided to focus on room bookings only. Furthermore, since spa and tennis bookings were handled by staff using their own independent systems, many of these bookings were cashed without the hotel know. The hotel was thinking that their internal departments were not doing well, but in reality, part of the money coming in was not being reported.
Clients were booking activities and using facilities without the hotel knowing it. Activities like spa and tennis were a big driver of room nights and management did not know.
The hotel was not aware that a centralised and transparent management system of activities would not only generate more room nights but also offer control over its own departments.
Clubs and resorts have been operating the same way for many years and they were successful that way. Even though they are very qualified people, managers of these operations have very little knowledge of what technology can offer. Change is not easy but everything around us is changing and if these companies do not invest in a proper digital solution they will be out of business soon.
Management must take the time to find the best solution for their own operation, and they need to get help from experts. The solution has to offer automation and efficiency and it might vary from location to location. A proper solution will cut administration time and increase revenue and will pay for itself within 12 months from implementation. No system out there should increase costs long term.
Technology is about convenience and simplicity; it is time to embrace technology!!
If your operations are not efficient enough you have to take action immediately!!
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