Hotel gyms: Tick-box afterthought or an untapped opportunity? Ft. Lou Zameryka of Airbnb & Borivoj Vokrinek of Cushman & Wakefield

Lou Zameryka: You do have an opportunity to come up with revenue generating ideas. If you build the gym with intentionality, you do have the opportunity to attract share in your market. And as long as it's not forgotten, like any other amenity or done with no intention, there is a market for it because the wellness market and participation in wellness is just growing, you know, at such a rapid clip.

Host: Foreign. Hi everyone. Welcome back to another Matt's talks. Hospitality and um, as you know I travel a lot, I post a lot about my travels and I also work out and I try and work out most weekdays. So hotel gyms are a thing that I genuinely care about. So a couple months ago I posted a photo of a hotel basement that I was like scouring through to find this dark hidden gym that they have that they loosely described as a gym. And it really hit a nerf because I posted about it online and then people and engaging with my posts and it feels like there's different opinions from hoteliers, from investors and operators, um, that have different views on whether hotels should be investing into a nice hotel gym. Luz has spent his career in the intersection of travel and wellness. He's involved with various wellness projects, has worked@booking.com for 17 years and now leads hotel enterprise and connectivity partnerships at Airbnb. And um, is a firm believer that hotels are underplaying the wellness opportunity. Um, Borovoy Vokrinek is a strategic advisory and head of hospitality research at Cushman Wakefield, um, and has advice on hundreds of hotel investment projects across three continents. And he's here to help make the case that the gym might not be worth it. And I'm really interested in this conversation to see where it takes us. Um, but first of all, are you both avidly working out? Are you personally a believer of working out or not really?

Borivoj Vokrinek: Uh, well, you know, since I'm contrarian, I will start. I, I, I like sports and I, I do sports a lot but I uh, don't go to gym, uh, frequently. Um, funny enough, I, I started my career career as uh, in the gym and I was, you know, the owner of the gym offered, offered me a uh, job in his hotel as a manager. So, so, you know, I definitely understand the gyms but uh, lately I switch more to outdoor sports.

Lou Zameryka: Nice, Lou. Yeah, I myself, uh, well I'm an outdoor guy for sure. So I'm still a competitive amateur, uh, runner. And then I do go to the gym to keep up with my running. I mean I love to run. So to make sure I don't get injured or Anything I go to the gym. Uh, this, this background in theory is fake, but it's actually a real picture from my wife's home gym where she teaches yoga and all types of things. Aerials, pole dancing. The house tends to be filled with active people in the first place. But it doesn't have to be in the gym. It could be kind of anywhere.

Host: So um, if we turn it to hotels and what do you think is happening with gyms in hotels? Sometimes you get a hotel that is incredible with a gym and they put it on the top floor with views over the whole city and sometimes it's that basement room. Um, like what's your views on investing in hotel gyms Borvoi?

Borivoj Vokrinek: Well, I think that you know I'm taking control role so I need to not have the playing field here because you guys are clearly too pro fancy rooftop gym guy. So uh, you know, when I, I think that it's challenging to justify investment in gym in that are sort of non income generating. Like talking about traditional gym, you know, 75 square meter in the hotel, you know, if, if it takes prime uh, area whether it is rooftop or floors with the views, you know there is alternative use, right? You can, you can do rooms there, you can do FMB and, and there, you know the mass just is, is, is hard. Um, so um, you know I, I understand why it tends to be in the, in the basement or areas that would otherwise not be used.

Host: And but you talked about it's non income generating. So you're just talking about directly, uh, direct revenue links to that real estate space.

Borivoj Vokrinek: Yes, uh, obviously indirectly. There is an argument and I'm sure we'll talk about it. How does it impact the occupancy and guest loyalty etc. But um, you know there are membership gyms right that are larger and there is a demand for it or in the resorts, part of the fitness or wellness center. It's a different ball game and you know, and luxury hotels is as well different ball game. But in a typical five star hotel, this is a uh, non income generating uh, place.

Lou Zameryka: Well, although I am the pro side, you know, I don't necessarily disagree that you know, I'm a pro. Anything worth doing is worth doing well. Right. And with intentionality. So if you are investing your money or your time, you should understand why you're doing it. Right? Not for the tick the box thing. And you know I come from a tick the box nation of hotels, right. I'm in the United States. I mean it's just like nobody really knows why you tick the boxes at a Hampton Inn versus a Courtyard versus a Holiday Inn. Um, and to me, I do think that you do have an opportunity to come up with revenue generating ideas. If you build the gym with intentionality and you do have the opportunity to attract share in your market, you have the opportunity to position a premium. And as long as it's not forgotten like any other amenity or done with no intention, there is a market for it because the wellness market and participation in wellness is just growing, you know, at such a rapid clip. But if you're going to just do it to tick the box, then I agree with Bovard that there's, you know, other boxes you could tick and make a lot more money.

Host: Yeah, like I'm always wondering whether if you build a really shitty crappy gym in a cupboard or in a basement, whether it's just a tick box, um, and whether you actually get guests that deeply care. Because I end up scouring the Internet for photos of it because I've learned not to trust a tick box on an OTA because I'm like, I don't know if that is a good gym or a bad gym. And I kind of want to, I want to see the photo, but it's so hard to find it. Um, and I'm wondering if it's this chicken and egg where the hotel is like, yeah, no one actually works out so we don't need it. But it's because your gym is so shit.

Borivoj Vokrinek: Right. I think that the expectation is low. You know, as a part of our award, when we also manage hotels, we we analyze the, the guest reviews and honestly I don't recall last time I saw any complaints about, about the gyms. And they are, you know, they are not great in all hotels we are involved with. So, so the expectation is low. And uh, and you know, I think that the right. Is that not many people actually use the gym. You know, I think there was, there is a research by Cornell done some times ago, but they found that, that only, you know, small percentage of people use gym. I, to me it's high percentage. They, they came to conclusions of 23% of people use gym, which I, I was actually surprised but it's high. Every time I go to gym, I, I feel empty.

Lou Zameryka: That is interesting because like that, that does seem pretty high to me as well. And I mean gym membership is at its peak. Right. And so last year in the US there was about 26% of the population belonged to a fitness club. Right. So it's about the same amount of the population of a hotel that according to Cornell that is, is using the gym. So as, as one grows, maybe the other one grows. We know now, you know, there is

Borivoj Vokrinek: a, I mean Matt, you travel and you are probably sort of more hardcore. Jim Goyer but, but many people, you know, they go to gym and you know, from, from my past experiences that they subscribe to, to gym membership and that they rarely go or they don't go every day. Right. So when you travel and you have meetings, uh, with clients, you have dinners and drinks, et cetera, you know, the chances you will skip even if you are, you know, going to gym regularly are quite high. So there is, there's obviously difference between, you know, the intention and going there.

Lou Zameryka: That's why I think it represents an opportunity for like hotels to actually have a true wellness point of view. Right. So because there are travelers that either are in their normal routine, you uh, know, very wellness centric and, and you're, you're, as a hotel, you have the opportunity to either knock those people off their game or help them stay on their game. And I do think then again you get value there. But if, if they can't rely on you for it, it's tough.

Borivoj Vokrinek: I think the challenge is that, you know, you have to make tough choices when you build hotel, especially in Europe because you know, the real estate is so expensive, land is expensive, you have limitations on build up a area, etc. So every square meter has to make money and tough choices have to be made. And obviously Jim kind of takes the shorter straw here. If you are, I think if you are in the market, you know, London, New York, etc, where uh, there are niche and, and there is this niche is deep enough, uh, that you can actually fill your hotel or gain substantial advantage by catering to that niche. That makes sense. But in most of the, you know, sort of less dense or deep market, you know, you, you can't afford to be kind of catering to lots of niches because you just don't have that space in your hotel.

Host: And do you evaluate a hotel differently based on their mix of leisure versus business travelers? Like who is more likely to use the gym?

Borivoj Vokrinek: The, the data from Cornell shows that, you know, higher uh, percentage of leisure travelers use the gym and you know, lower percentage of business travelers, I guess because they are busy and don't necessarily take all their trainers and equipment with them.

Host: Yeah, because like, is there a level of hotel where you're like gym makes no sense. Like three star and below would never add a gym four star. It's like 50. 50. Then five star it's a must have it dep.

Borivoj Vokrinek: I mean obviously brand standard even for some economy hotels required to have a gym. Um, I have done little analysis of, of booking.com and I look at major, you know, gateway cities around, around the world and what I was surprised that if you just you know, look at how many hotels are on booking.com in that city and then you take the gym then the number of hotels drop rapidly and actually the average across 12 major gateway cities in, in the world it's only 30%. That was a shocker to me. Uh, then if you kind of filter it out to five star hotels suddenly that goes very quickly up and 80% of of hotels have a gym. So so with the higher sort of positioning the expectation is that there will be gym and, and the hotels need to provide it.

Lou Zameryka: And it's probably also though the most dangerous scenario to put it in unintentionally. Right. Because to your point like you have a five star hotel if you believe there's some other way to get share of that guest's wallet, like you better be really sure that Jim is, is the one. Right. Because you still may face uh, maybe if you don't face investment, uh, constraint, you face space constraints. Right. And things of that nature. So it really goes back to thinking about like who are you serving and are you really serving them with this, this amenity or not, you know, and then you could get creative. Right. Like but if you're, if you put it there and your staff doesn't talk about it and you don't figure out, you know, how it's best used and, and if it has an opportunity for revenue even in the community that you're sitting in. Right. Um, you know that's how you lose money in any investment is by not doing stuff that makes sense and understanding how to, how to use it.

Host: Yeah. Like almost like make sure that if you have one that it looks really good, that it's photographs really well so you can promote it on your websites and then you can confidently talk about it. But if it's basically uh, one of those bicycles uh, in your like in a, in a crappy space in the basement, nobody wants to sit in the best bicycle. Um, in the basement at 5am M in the morning, it's the most depressing experience. So um, if you commit to it, really kind of commit to it.

Lou Zameryka: I have a friend that has does ah, hotel gym reviews in under a minute on YouTube and they're gaining traction and it's great because like you can really quickly see the whole gym and his perspective on like what it's appropriate for or not. And then I know, you know, booking.com has the gym filters. I also did a similar exercise to just see what was, uh. And sometimes by percentage it doesn't seem like a lot, but then you're like, wow, there's still a lot of hotels, like with the gym, it's kind of interesting. But there's like a website that's growing fast too called hotel gyms.com. right. Because I think when you're on a, on a general ota, the thing about clicking a filter, it's good that you like gym is, is such an intentional filter. And this is where we'll probably get with like AI and conversational search, right? Where if you cl gym on booking.com, you just get a list of hotels that have a gym. It doesn't like, help you immediately see the gym picture. It doesn't help you have any context. Like hotel gyms.com looks like the front end of uh, booking.com, except there's like an actual gym review right there on like one to five kind of stars, right? Like, how good is this gym right in front of you? So now when you're doing your, your search results page, you sort, you can already kind of go, okay, like, let me see what this one has. It's a five star gym book channel.

Host: Or is it just informational? And then you have to still go into a different channel to book it.

Lou Zameryka: You can book. I think they're probably using affiliate feeds from different, other, uh, OTAs. But you know, that overlay at least gives you more signal. Right. And I think that's what we'll see with AI, Right. So if you are a hotel with a gym and potentially it's underwhelming, that'll be known pretty quickly and if it's fantastic, it'll be understood pretty quickly and you'll, you'll stand out much quicker than if you just hit the filter and you end up with the same hotel content. And there's just now only 30% of the hotels in a market for you to wade through.

Host: Because, Lou, when you book a hotel today and uh, you want a hotel with a gym, what will be the process that you're going through on the Internet to get to a, uh, booking?

Lou Zameryka: Yeah, depending on where I'm at, right. I work for Airbnb now. So first I'm on Airbnb and I'm checking the filters there too. But honestly, for me, the, I start with the Running routes, right. So I love, I need to run like six days a week. So first I just look for the running route. Then I make sure that the hotel is near the running route that I want to be at. And because I'm a very social person, if it's not clear to me that there's like a, uh, like maybe David did a review there or something, uh, I would rather go find a local place and run to it. Like I've been known to be the guy who basically runs two miles already sweaty, shows up at like the hot yoga class and then runs back to the hotel because I prefer, you know, and that's what's nice, right? Like if you're only going to do it to tick the box, look at your local community and figure out if there's a way to tick that box in the local community that adds value to many more stakeholders in this hospitality ecosystem. But yeah, basically, um, I'm first looking running route, always.

Borivoj Vokrinek: Yeah, I mean, you know, the study I talked about, the Cornell, they as well unfortunately found that there is, there is no impact of having gym or not having gym on intention to book before and even after, even there's no gym, then you know, it doesn't really affect uh, sort of intention to book. So I guess people find their way, right? They either go for a run or they find something in the local community.

Host: So I'm uh, using a GLP1 to lose weight and I've been using that for about two years now. And as part of that you shift from cardio to more weights workouts that you don't get because epic face and like, you know, look gaunt and it's. I've uh, really shifted my workout routine from doing a lot of like biking before to now actually doing a lot of weight workout. But you don't just do that on your own. You actually need weights in the gym and good equipment for it.

Borivoj Vokrinek: Right.

Host: And I see this gaze around GLP1 which is really reshaping society, I think. Uh, uh, because I talk so openly about it, I find out about all these people that are secretly taking it and I'm like, why are we secret about it? It's not an embarrassing thing, but I think that there's going to be some level of shift where people actually require to work out. But I don't know if that is statistically relevant at this point. But as you plan real estate, I'm assuming you do that much more in advance and you need to look at those trends. Do you currently look at any of that or it's not really that relevant, you think?

Borivoj Vokrinek: No, no, no. I think there is a ah, there is a kind of growing trend in uh, you know, sort of well being and longevity and, and sort of impact of fitness and, and exercising on your mental well uh, being as well. Right. It's not only about your physical but your mental. So so obviously there are opportunities where if, if you have substantial space you can tap into it and, and actually generate business on its own. Right. Within the real estate. And it's usually great way of diversifying and de. Risking your income stream where you know, uh, the best solution is as typically as well with FMBs to outsource it to kind of rent it out to local or international, you know, gym or fitness, uh, operator or longevity sort of uh, experts and then have a rent and therefore have a diversified uh, business. So that definitely from real estate perspective it, it. There is a trend you, you see emerging brands that, that are really tapping into this in hotels and, and you know, longevity centers and it extends the lens of stay, et cetera. Right.

Lou Zameryka: So Bovo is right. When I left booking uh,.com I left to start a wellness company, right. And uh, that, well, that wellness platform alively was uh envisioned because of the broadening of what people consider wellness. Right? So your mental wellness, obviously your nutritional wellness, your social connection, your, Your actual physical wellness, all of that, your sleep and recovery. Right. All of that now plays a part in broadly what people consider to be their wellness life. And they're focused on either longevity or health span. And I do find it kind of like there. That means for a hotelier there are more ways than just the standard like hey, did I put a gym in here or what's in that gym to address all of these trends that are a part of the bigger wellness trend. I find that to be really interesting and like I sit on the Wellness and Travel and Tourism Advisory board as well. And we are creating standards for hotels to help them understand like the breadth of what these travelers do consider part of their wellness. And if they're really active in it, like you mentioned Matt, like they might find your hotel ticks three boxes or four boxes of what they need. But maybe it doesn't have like a squat rack that you could put £300 up on, but they, they'll go find that somewhere else. Right? But they're like hey, this meets it. And I was pretty surprised. I also own a small hotel, uh, up in the Catskills. Not, not big enough. It's, it's on a ski mountain. Not Big enough to put anything too interesting in yet. But there's such an emptiness of that wellness lifestyle reflected in brands other than five star brands. Right. Most of the wellness lifestyle is typically wellness for holiday or retreat purpose or when it's not for that. It might be in an urban location, but it's, you know, extremely high end wellness. The rest of the industry seems to have been satisfied with brand development. Just stopping at the word lifestyle. No actual explanation of what lifestyle really is. Right. We said, oh, we have like branded hotels and we have lifestyle hotels, you know, for people that have a lifestyle. And it's like, well, wellness is a big one. We could, we could get a little bit more specific and build some, you know, mid scale and upscale wellness brands and then attract people that go, oh, you know what lifestyle I live? I guess I live the wellness lifestyle

Host: because if I had real estate and I picked to build a gym in that real estate, how would you go? What would you buy? Like Louis, there a way for different hotels to decide what kind of equipment that they need for that particular brand of hotel or accommodation.

Lou Zameryka: Uh, I mean, I'm certain there's great like gym consultants out there that will help you design it from the standpoint of an actual, you know, gym design. But also it comes down to again, like understanding what your, your use case is, you know, because if, if you're, if you have a certain customer base and you understand them, then you kind of want to build to that customer base, you know, and not to, you know, the extremes, if you will, if you, if you believe you have, you know, like the high end hotels often have like type A personality staying in them. Right. So the more, the more extreme gym offerings probably will get used because they're more extreme people. Uh, but I think you really got to understand who you're catering to and then get an expert in there.

Borivoj Vokrinek: You know, I have to go back to defending my contrarian position. So, uh, you know, obviously Airbnb is a good example where, uh, you know, you correct me if I'm wrong. I would imagine 99% of Airbnb units don't have a gym, uh, attached to them. So, uh, but there is probably something very good or, uh, in the neighborhood, right? So then the question is, does the investor has to really spend the money in the space that is limited to build a gym that probably he doesn't have enough space to build membership gym, and it's all the requirements and technology that today is available, or should he take advantage of something in the neighborhood and if there's nothing in the neighborhood then potentially there is a opportunity for uh, the investor to do it within the hotel. But then the question is what generates more income and what is there needs to be demand. You need to look at your demand sources. It's not going to be the key driver, not going to be the guests who's staying in the hotel. It's going to be the local community. Is there enough residential units to actually uh, drive demand for your membership and uh, for the usage of that facility?

Host: Because you looked at projects I think across Europe but also in Asia, Middle East. Is there a real distinction difference in how hotels are built across these different parts of the world?

Borivoj Vokrinek: Yeah, I mean we all travel around the world so I'm sure you have noticed that when you are in Paris or London the rooms are shoot boxes, you can control the TV with your foot. And when you go to Asia or Middle east everything is spacious and big. So obviously it's driven by construction cost, by limitations and uh, land costs, etc. So when you have no limits on you know, how high you can build or, or the construction cost is not as high, you, you have no alternative cost. You know, everything cost to build. But if there is alternative cost of I can do something else there, then it's becoming less feasible to have like a big gym and with the views and at the rooftop. So, so yeah the, the tendency is that in, in Asia and Middle east you have large gyms, you have lots of FMB spaces versus uh, in Europe everything is constrained because I'm always surprised

Host: in the US when I walk into the gym at 6am that it's usually packed with people especially when you go to the major cities like New York or la. Um, whereas I don't feel that in Europe when I enter at 6am I'm like just me and myself and I, and um, a water cooler that buzzing in the corner. And I really wonder what the distinct differences are in workout regime and what people expect from a hotel gym in different continents.

Lou Zameryka: Well I tell you now, now all the Europeans that I know are going to hate me because like 6am you're pretty early bird for European. I mean I, I, I probably why you're not seeing anybody booking.com used to be above uh, and remember I'm playing above this Starbucks, right? And I'd go to Amsterdam all the time and this Starbucks didn't even open till 8am and I'm, I'm a New Yorker. I'm like what is going on here? I'm out of the door at 4:45 in the morning, you know, like, so I think it, some of it's just the time you go, Matt. Um, but, but I also do think that my experience has, has additionally been that uh, Europeans also are active in many more sports than just the gym. Right. And so like a typical American gym, if you're into sports, you're probably not relishing like staring at yourself in that glass mirror, you know, on the treadmill in like a very small box. So you could, you know, you could just say, ah, ah, you know what, I'll play some extra sports this weekend or I'll go to my other gym. I think that tends to be some of the issue is like, if it's not a good gym, like you have other things you're doing. Uh, in the States it seems like people are more sedentary. And that gym time, while some people really relish it as part of their routine, others just are like, well, this is what I got to do. So I'm going to the, you know, the three star hotel basement and gonna,

Borivoj Vokrinek: there must be something culture, uh, in, in Japan because I, I look at Tokyo and Tokyo, only four and a half percent of, of hotels, uh, seems to have a gym. I was surprised based on booking.com filter. So unless there is, unless they don't, they have a gym and they don't say, that would be really silly. But, but that was a shocking finding.

Host: Yeah, I'm always surprised with how many hotels don't talk about it. Like I go often to the hotel website first and I, I know to go to the gallery because probably the wellness page doesn't talk about the gym. Um, and then I really struggle to find the photo. And then I go on traveler review websites and then often I find it there. Like with my trusty friend chatgpt, you can scrape the Internet and figure out whether there is a gym. And it says active photos. Um, and I'm wondering why no one talks about it. And, and, and I'm assuming that that's also why like hotels are not getting the bookings. But Lou, you've worked@booking.com for like 17 years. Have you seen that a hotel that has the filter on it does actually drive more bookings because there is no other evidence than that little dumbbell that you can click and that you, you know, see it on there, But I'm wondering whether you've seen actual impact of it.

Lou Zameryka: So I haven't seen that firsthand during my time there. But I will tell you that generally speaking, filtering doesn't get used that much in, uh, O. Secondly, the porvoi mentioned it earlier, but really people are still very location and price before anything and then they get to where they get to. And I think if we saw people use the filter after location and price, what we'd probably see, and we always saw this on heat maps anyway, was how people don't read anything. They then go look for the pictures. And that's true for the gym pictures. You sometimes see that when you're looking for, you know, if you have like, I have a few kids and it's like you're trying to figure out is that room a suite where like I get my own bedroom or is that a half wall? What is that? You know, like so. So the things hotels kind of don't want you to know, anytime you see that obscured picture where you're like, hey, someone could have taken this picture and given me all the information, odds are you're, you're not going to be, uh, it's not going to beat your expectation when you see the real thing. And they're doing that for a reason. So. But I had not seen a lot of, you know, I haven't looked back then for the gym filter being used. But I do think people are still kind of price location and then they're using kind of photos to help them understand some stuff.

Host: The way I search has dramatically shifted towards the LLM. So it now knows kind of the hotels have educated it and it knows what I'm looking for. Um, and then it also knows to give me the photos of it because I don't trust anything on websites of hotels. And I'm really just hoping the hotel is listen to this and they go to the website and like, yeah, actually you're right, there is no images. And maybe we should have more images on our website than we have on the OTAs, because people do go there, but then they leave because they know the OTA usually has more images than you have because they require a certain level of images. Right. Um, we'll see if we can change some of the hotel.

Lou Zameryka: I think hotels are in a unique position too, because one of the elements of wellness is social connection. Uh, and that's like the loneliness epidemic is kind of well known around the world as a leading problem we're facing. And we're in the hospitality industry. Like, we have the chance to do that. So, like, if you are going to create a gym, this is the time where like, maybe it doesn't have to be a gym. Maybe it's an unused meeting Room where you could do group classes, right. And bring someone in from the outside. Maybe it's uh, outdoor space that you have that you could do something in or just getting your guests to connect with again, a local gym, a local run club, something like that. What I know, you know, there's many different ways to experience wellness and I would encourage hoteliers to kind of, you know, think outside the box because you can solve kind of two things.

Borivoj Vokrinek: And I as well was wondering, you know, if there is a, um, you know, with today's technology and smart furniture, et cetera. There is a way because I think there is this kind of void or issue with small gym, right. 75 square meters. If you don't have a space to do membership gym and swimming pool and wellness center, then it's becoming amenity to generate income and then it ends up in the basement. Right. So, uh, that's a problem. Um, and the issue is that, you know, it's available 24 hours, but it's used only, you know, a couple of hours in the morning and a couple of hours in the evening. So, so, and all that space lays unused during the day. Um, so is there alternative use of the gym space while it is not used? You know, I'm sure you wouldn't mind if somebody tells you gym is closing at 10:30 or something. You know, there is a whole day to be used as uh, kids co op or something.

Host: What else would you do with a dark dungeon, basement room, like, like a large room but without windows. What would you do from a real estate perspective to turn that into a revenue generating space?

Borivoj Vokrinek: If it is in the basement and not, not windows, then obviously you can do meeting space there, right? I think gym is good, good solution. You can do meeting space, you can do back of the house and make sure it doesn't take space in the areas where there is a natural light. Um, and um, you know, there are, I guess these days, you know, you can do, you can do massage rooms, et cetera, uh, in those places. But I think the key challenge is if you are planning to do gym in uh, the rooftop, et cetera, where that alternative uses are. And, but you made a point about uh, sort of being basement. But I think we are now even having rooms in the basement, right? I mean in London it's allowed. So you have now these, you know, uh, hotels that have hundreds of rooms in the, in the underground and you know, and they are busy and they charge reasonable price. You probably won't write, you won't spend your honeymoon there, but you Know, they serve the purpose. So, so I think we are moving into underground and, and I wonder if the definition of gujim is not about whether it has natural light but you know, how well designed it is, how well activities, if it is place where you can interact, etc. Right. So maybe there is a uh, future of gyms in the basement, but well done.

Lou Zameryka: Yeah. And, and to Matt's uh, point too, there, there are like, you know, because I'm in the wellness travel world, I get exposed to all types of new business models, right. And there's a company called, I think It's Club Club 100 or the 100 Club. And they do, you know, they basically will bring you members from the outside community into your hotel gym and things of that nature. And there's personal trainers here in Manhattan that'll work, work out deals with hotels to train their guests, but then also use that facility during the day to train their own uh, private training.

Host: Yeah. Keep your hotel space into revenue generating space by what? Yeah, externally then.

Lou Zameryka: Yeah, because Bovo is right, like, I mean if you're kind of, if, if you closed your gym at about 10, 10:30 in the morning, you probably aren't displacing any of your guests, especially weekdays and until you know, four or five o' clock in the evening at, at the very earliest.

Borivoj Vokrinek: And, and I think as well, you know, I, I've been at the, at the conference and there was a uh, you know, display of, of gym equipment and they had really fancy equipment, you know, which caught my interest that you can do like 3D scans and you can, you know, do your health check, et cetera. That, you know, I think lots of people obviously cannot afford it at their home or they don't find these things at their homes or in their local community. But if, if this is in the, in the gym and you can actually charge for it and actually they mentioned that, that you can pay like €400 for doing the health check, et cetera, or scan. Then this suddenly becomes a revenue, uh, generating, um, facility which you know, is changing of the game.

Lou Zameryka: I find so many hotels miss the idea that they can be part of their community and so many communities miss the idea that a hotel is in their community, right? So like if you go into the old U.S. westerns, right, like when you arrived in a town, if you weren't robbing the bank, you basically went to the inn, right? And that was the bar with the rooms above it and you didn't get into a fight with another traveler. You usually got into A fight with a bunch of locals who were also in that bar and in. Nowadays, like a local doesn't go to a hotel. You know, maybe we do because we're travelers and we feel comfortable in them. But most people will look at it and say, ah, that's for visitors, you know, and there's a whole opportunity to take all of those people around you and bring them into your space too.

Host: Uh, I had my. Because I was working out when I arrived in Amsterdam, I was working out outside, but it rains every second day. So we contacted the five star hotel that I have next door to and we said, can we use your gym where we're happy to pay for it? And said, no, no, we can't. Um, because it's like a gym for guests. And it just, it's, it felt like such a lost opportunity that they wouldn't even take businesses just walking in the door and they just decline it outright.

Lou Zameryka: Right.

Host: Um, and I'm also wondering if you're working with gyms locally, like, because I think a lot of hotels don't leverage the local community enough. Like on the one side you can want to attract them into the hotel. If you have a great gym, optimize it. But it's also, if you don't have a gym, then go and walk into the gym, not next door, and figure out a partnership with them. But how far do you think people will be willing to walk from a hotel to get to a local gym?

Borivoj Vokrinek: 15 minutes rule, I guess.

Lou Zameryka: Yeah, yeah, that's long.

Host: I think 15 minutes.

Lou Zameryka: Yeah, it depends, I guess, on the weather. Right. I hate to say this, but I run to the gym, so I run to planet Fitness. It's 2 1/2 miles away from my house and people are like, you go to Planet Fitness? I'm like, yeah, it's really inexpensive. I travel a lot, so I'm not going to pay a lot of money for a gym by my house. So I run there. It's exactly two and a half miles there and I work out and then I run back. I got a five mile run plus the gym. I'm a bad example.

Host: Like, you don't sound like your average Joe guest who goes to the gym,

Lou Zameryka: But I think 10 minute walk, like

Host: for a coffee I'd walk two blocks. Right. If you think about New York blocks, I wouldn't walk three blocks. And I wonder if it's the same for a gym or if you could do a partnership with a gym four blocks away.

Borivoj Vokrinek: You know, if you go to gym, you should warm up right? So you can take it part of your kind of routine, you warm up running to the gym and then you can go straight away into, into your, into your routine. You know, I think we're getting somewhere, you know, because if you connect some of the points you made earlier about, you know, people having that sort of difficulty in going into the hotels, um, you know, I found this, this is really common in, in certain geographies, et cetera, and it's so hard to break. You know, you, you can have amazing FMB concept and restaurant. It's just the locals would not go because they think this is overpriced and this is for hotel guests and it's difficult to get in. Um, and so it seems to me that better direction, rather than trying to get the community in, which is very difficult, uh, is to find a partner in local community and send your guests there and, you know, take advantage of it and.

Host: But is it a local cultural thing? Because like in Czech Republic, for example, where you live, and I've lived a long time, people do not go to hotel restaurants. However, in Amsterdam or in London, I don't see that, like, we do go to hotel restaurants. We walk in and they have great restaurants. And I'm wondering what does the Czech Republic hotel scene get wrong for that? And then that could be true for hotel gyms as well.

Borivoj Vokrinek: Yeah, it's, it's a cultural thing where, you know, for generations we have been told hotels are, ah, too fancy place for us to go to. So, so you kind of have the diversion that, and, and, and as well, I think culturally sometimes, you know, uh, the Eastern European or Slavic nature is not necessarily, you know, like Anglo Sas nature where they, they are smiling and sort of welcoming you. Even they don't know you. In order for me to smile at you, I would have to know you. So that is this sort of very serious person looking at the reception and you already are kind of scared to enter in. Right.

Lou Zameryka: So that's true. Uh, I mean, even in the U.S. right. It's a different version of it, but basically you were trained until maybe the past 20 years or so when restaurants and hotels really have been stepping up their game in certain cities and markets. But you were basically trained to think that either you're going to kind of get ripped off or it's going to be just like the quality level enough to feed the people in there. And like no one, you really want to go to the restaurants in the market. Right. Not that there's a restaurant hotel.

Borivoj Vokrinek: Yeah.

Host: So what would hotel have to do to make their gym, like make outsiders from the community to walk in the door to actually then join the gym. You think, what's the thing that's holding them back?

Borivoj Vokrinek: Well, uh, you know, as with the restaurant, we always advise, you know, you got to have separate entry. It should looks like it's a separate business. Right. You have a, uh, entry for your guest, but you have entry for your gym. If it is membership gym or wellness center, that, that usually does the trick. And there has to be some visual connection with the street, you know, with passing traffic, where people see, you know, it looks great, you know, people are exercising, it's full, you know, uh, and you kind of think, okay, I might as well go. Um, but if you don't see, if you don't have that visual approval that, that this is a good facility, uh, to go through the lobby and find your place to actually see, you know, I think that's, that's putting people off.

Lou Zameryka: Yeah, I think that's where you need the partner. Right. So like whether it's those personal trainers that are going to just say, hey, I need some gym space, I have clients, you know, I can't bring them to their home. And by the way, I don't need much. But you have what. But I do agree, like the street level attractiveness and things of that nature would go a long way. And again, that comes back to like the intentionality of why you wanted to develop that space. You know, again, I don't like the idea that the box ticking, you know. And I know, I know many of our American brands created the longest lists of boxes.

Host: So there's, there are specific brands. And Lou, I'm very interested in your opinion here that are specifically targeting this audience. So like, yes, I was on the call with the CEO of Gravity House and they have a really adventurous brand. Um, you've got six senses that's leaning into the wellness aspect a lot. You've got Equinox. Um, so is that just a niche that's doing really well and attracting that niche crowd and able to pull the prices or are some other people just missing a trend that, that should be, that will be much bigger?

Lou Zameryka: Well, I do think that it's, uh, it's a niche in two ways. Right. Like the, the economic niche is these are very high priced properties. Right. Like the Equinox in New York City is extremely high price. Yeah. Uh, for working, for the idea that I'm going to work out an Equinox and everything like that. There's a bunch of Equinoxes in New York City. So uh, and other great gyms. So I do think it's a mix between that because they're of course recovering some significant spend that they made on the equipment, on the space and, and using that space for things. But as I was saying before, like if 26% of uh, Americans, uh, belong to the gym and like Gen z and the 65 plus crowd are the fastest growing cohorts, right. It's like 35% Gen Z and fast growing, uh, 65 and over. That tells me that there's an entire market from the hotel perspective not being serviced. And there are because there are many modalities. If you go to a show like was uh, mentioned before, you could see different ways to approach wellness, whether that's the gym or other things. And so now more than ever you can be in the dialogue of wellness I think in many different ways. And it does puzzle me that again like at the three and four star level or maybe that two to three star level, we built all these brands and soft brands that literally stopped at the word lifestyle where it's just, hey, it's designed nice, there's a good restaurant, it's comfortable. I mean that's no one's lifestyle. Those are nice things I like. But if someone asked me how I, how my lifestyle is, I wouldn't be able to say that. So I do think that we are missing an addressable market. And now better than ever, you could address it without having to spend to the level of uh, you know, what Equinox might spend or six senses.

Borivoj Vokrinek: But we are now talking about actually people paying. Right? And then, and as a travelers, you know, if you come to a hotel and suddenly they tell you well uh, you have to pay, you know, I did, I did my math and to justify you would have to pay €10, uh for a gym, uh, which would be 75 square meters because I assume you can do three rooms instead of that. And I did my math and calculated that you would be losing about one and a half million uh, of value, um, and around 89,000 of net operating income. Uh, instead of those rooms taking the average KPIs for European hotels, um, so in order to, to compensate for that, you know you as a Jim goyer

Host: you would €10 ADR increase. You need to have.

Borivoj Vokrinek: That's actually not high percentage. I did the math. So for 200 room hotel you would need 1.1 percentage points higher, uh, occupancy, which you know, um, I guess in certain markets where you know demographics are right, you probably can argue for that. But suddenly when you have 100 room hotel that's already 2.5 and 50 room hotel, you have 5, 4.4.5% percentage points more on occupancy that, that's difficult to justify. But if I just take you know, 70, uh, 5 square meter gym, um, which is obviously not going to be great gym, uh, given the size and you know you can do three rooms instead of that and those three rooms will be 75% occupied and would command €160 rate. And then you take 60% flow through and you know, you, you can calculate and you take off base fees and F and e reserve, etc. You know you're missing around 90,000 of uh, euros a year. So in order to compensate for that, and if I assume that 20% of people use the gym based on the Cornell study, then I can calculate that how much of those 20% that would actually go to the gym would have to pay to generate to me €89,000 or €90,000 a year, which, which I calculate around 6 to €10. So my question to you. Would you pay 6 to €10 to go to uh, a relatively small gym?

Lou Zameryka: Yeah, I think that's where it matters in the uh, in the, the creation of the entire package of that hotel.

Borivoj Vokrinek: Right.

Lou Zameryka: Because like m, most of people are choosing hotels through kind of a very much a sea of sameness in, in markets and like if you could stand out to one cohort as mattering they will like spend you know, the, the, the marginally more money. Right. Or they will frequent you more time because you finally connect with them. Like our industry is there's no people walking around going like, I am a Courtyard by Marriott person, you know, like me, I'm an IBIS person. You know, like you get it, my whole life exudes Ibis.

Host: But I think it also depends on very much the city that you're in and whether there's enough demand for you to segment yourself into that. So if I'm you know, in a rural city of Germany, yeah like there isn't a lot of demand so you're probably not going to get the upside. But if there's real competition for that five star or the four star kind of guests, you need to figure out a way to stand out because a bedroom is a bedroom in downtown London. I think the maths needs to be done but also with market information to be able to make that judgment whether, because for some hotels, I agree it doesn't make sense to put a gym in when you're just trying to optimize for bedrooms. You're just wasting real estate. I guess the thing is I won't mind the basement but I mind like a really bad lit like badly designed gym. So I'm like if you're going to take that basement room, you can do it in a nice way. I've seen really nice gyms. The W in M Prague, I love that gym. But it's, there's no windows but it's beautifully done. And I think it's just really think about the aesthetics that you can be proud of the gym instead of just it just being some rusty weights in a corner that isn't the experience that you want.

Borivoj Vokrinek: Yeah, if you do it right, you know, if you do it, you should do it right and maximize the impact. And I think there, you know, then you should put visuals, you should put pictures and you should communicate with that sort of niche market that you have, that sort of differentiator. And I think this is where hotels are not doing great job to in that communication and marketing for sure.

Host: My last question to both of you is and give me a straight answer. You're advising on 150 room lifestyle. I used to be word lifestyle because you said it. Lifestyle hotel in a European city center. Do you build a gym? Yes or no?

Borivoj Vokrinek: And why I say yes, uh, in the basement if it, if it's to be on the rooftop. And um, I would, I would not do it because uh, I can, I can put you know, three rooms or if you're talking about big gym, I can put 10 rooms and, and, and uh, and generate much more income. So I, you know, in a way I love gyms when I do repositioning uh, because every time I find the gym on the rooftop I have low hanging fruit for the owner saying you know, move it to the basement, put 10 more rooms, put 10 more rooms and here you go, value goes up. Um, so contrarian I keep my, I'm

Lou Zameryka: also, but I'm also a yes, I'd rather, and I'd rather see the, you know, maybe the deck is for yoga, uh, on the roof, you know, and things of that nature. So I'm a yes you put it in. But again you define the, the life, the lifestyle version of your hotel even further with wellness. Right. Because that, that's where these trends are, are going. So you might as well really lean into it if you're going to. And whether that's the basement then you lean into it the right way. Like you're talking about the W in Prague or whether it's the rooftop because you got an endless money bags, then that's also fine. But, but don't you know, like show it, really talk about it and be about it. Don't just put it there.

Host: Yes, I agree and like I really enjoy when I see a hotel that puts yoga mats in the room because that means I don't have to leave my room. I can just do a workout there if the room is big enough. But also the deck, the yoga deck on the roof, you can recycle that into, you know, cocktails in the evening and in the morning it's, it's the yoga deck. So just really be flexible with the real estate that you have and hide it well during the day and then pull it out at night or the other way around. Um, but there's, there's different ways to, to do it. There's a new hotel that's opening in London, um, St. Clements and I'm a massive fan of how they've incorporated gym workout. That's basically there's the a chest um, by the bed and it has some basic weights and then you can go to the real gym. But I like the idea of having just some basic workout equipment because sometimes I just got 15 minutes and I just want to get a little workout in. So there's different.

Borivoj Vokrinek: Yeah, you are unique. The, the study found that only apparently 3% of, of people use the in room fitness equipment. Apparently super low usage.

Host: That's interesting.

Borivoj Vokrinek: But it's been, it's been done, you know, 10 years ago. So I'm sure that things have moved since then.

Host: Yeah, it might change and I do think that there will be some shift due to some of the, the changes of lifestyle that are happening. But it is a slow moving beast. And, and, and I like, I really appreciated the very thoughtful advice that you've given. Um, so thank you very so much for joining me today and hopefully we'll have a return follow up on this in a couple of years when everything has shifted and everything has changed. But I don't think it will change.

Borivoj Vokrinek: Thanks for inviting me. Pleasure to be here.

Lou Zameryka: Thank you for having me. Uh, and we'll, we'll eventually become someone's board of advisors on their next wellness hotel development. You know, so we'll get back together.

Borivoj Vokrinek: It sounds like a good plan.