GET HCM
magazine
Sign up for the FREE digital edition of HCM magazine and also get the HCM ezine and breaking news email alerts.
Not right now, thanksclose this window
AskNicely
AskNicely
AskNicely
Health Club Management

Health Club Management

Follow Health Club Management on Twitter Like Health Club Management on Facebook Join the discussion with Health Club Management on LinkedIn Follow Health Club Management on Instagram
UNITING THE WORLD OF FITNESS
Get the latest news, jobs and features in your inbox
Health Club Management

Health Club Management

features

Interview: Steven Schwartz

From top of its game to fighting for its life, Midtown Athletic Clubs’ rollercoaster COVID story will resonate with operators across the sector. Its CEO has a frank conversation with Kate Cracknell

Published in Health Club Management 2020 issue 8
Steven Schwartz started his career in hospitality before joining Midtown in 1987 and later becoming CEO
Steven Schwartz started his career in hospitality before joining Midtown in 1987 and later becoming CEO
Member confidence is the single most important factor, and I say – without doing so lightly – that our cleanliness standards, protocols and marketing are the best I’ve seen in the industry

Originally founded by his father and grandfather in 1970, and with his son Alex now making his presence felt as director of marketing, Midtown Athletic Clubs is – as CEO Steven Schwartz explains – a four-generation business.

“Dad was a great tennis player: winner of nine national championships and seven state championships. We never had a vacation that didn’t revolve around a tennis tournament,” Schwartz laughs. “He was also passionate about real estate, and what the business did was bring this together with tennis. The clubs were tennis facilities and my dad would get involved in the tennis programming, but the business model had a real estate focus and we always had partners in the clubs.

“In my father’s mind, I think it was an inevitability that his kids would join the family business,” he says, “but I went down the path of hospitality, studying at Cornell hotel school. My dad’s fire was stoked when my career brought me back to Chicago as director of development for Hyatt Hotels. I got leaned on and I fell for it!

“I joined Midtown in 1987 and started looking at the model. The business certainly wasn’t failing, but tennis wasn’t performing as I thought it could. We started adding elements of fitness, turning Midtown into a multi-recreational business, and learned how to market it. We soon realised this was a more profitable model.

“Dad wasn’t really interested in fitness though, so by 1990 he turned to me and said: ‘You do it!’ We renovated, repositioned and slowly, over a period of about 15 years, bought out all our partners to consolidate ownership.

“We now own eight Midtown Athletic Clubs outright, including ownership of the property itself: four in Chicago and four up and down the eastern seaboard, including one in Canada. We also manage 25 clubs for other owners – hospitals, corporations and so on – which is an area of the business dad started and I’ve grown.

“Management contracts are a comparatively small part of our cashflow though. Our eight owned clubs are all very large: US$8m in revenue a year for our smallest club; US$13m for our average club; and over US$40m a year at Midtown Athletic Club Chicago – dad’s original tennis club.

“At least, those were the revenues pre-COVID...”

What sets Midtown apart?
“What really separates us is our focus on environments, experiences, feelings. This is how we differentiate ourselves from others, and it comes from my background in high-end experiences at hotels and resorts. It’s about lifestyle – creating spaces that make you feel uplifted and where you want to hang out.

“I’m into art and design and have been a photography collector all my adult life. I’m fascinated by how the aesthetic world – the abstract use of composition, tone, depth of meaning – translates into everyday life, even without us always knowing it. Fuelled by this interest, our design philosophy includes a number of interesting principles.

“‘Space is Luxury’ is one such principle. Space is inefficient. It goes against everything you usually try and do when you design a gym, fitting in as much equipment as possible. By contrast, we’ve created boulevards on the gym floor where two, three, even four people can pass each other comfortably. We don’t even have stairs at both ends of the floors – just at one end – so people have to engage in a stroll, which is a wonderful feeling.

“This dovetails in with a concept we call Alone Together, which is about being around others even if you aren’t directly interacting with them. It recognises that fitness is often a solitary pursuit, but that people still want the social connection of being around others in a space they enjoy spending time in.

“Another design principle is Natural Materials: there’s a real resonance at an emotional level when you see something that’s real.

“Light is another. We have big windows in our ‘do it yourself’ fitness areas, and in our social spaces where possible, to offer uplifting views. The studios are the complete opposite: these are controlled environments where we create an experience, and each experience is dictated by the class that takes place there. I want these rooms to be angular so they lean in to what they are. A lot of other studios already do that well, but I wanted to lean into that, bringing it into our big clubs to create a series of boutique spaces.

“We have entrance areas before the studios, too: it isn’t just a case of walk up, open the door, walk in. As you approach each studio, there’s an area of transition, setting the tone as you move from one space into another and recalibrating your senses. I call it Layers of Wow, where you peel back one layer at a time. In our Chicago club, for example, as you approach our yoga studio Samadhi, you enter a quiet, moodily-lit ante room with a huge Buddha statue. That sets the tone. Then you go into the studio itself and you see a tree in the middle – another ‘wow’.

“Overall, it’s about creating something a little less efficient, a little more fun. Somewhere you can lose yourself for a couple of hours... hence my dislike of signs and clocks!

What was your rationale for building a hotel at the Chicago club?
“The business is now 50 years old, so we’ve had to reinvent ourselves a few times: first adding fitness, then big outdoor pools and recreation areas and now, at Midtown Athletic Club Chicago, a hotel and farm-to-table restaurant. We still have 16 indoor tennis courts at the club – something we did backflips to save – but essentially we’ve dismantled the whole club and rebuilt it. You gotta love my father for letting me do this!

“The reconstruction project was actually already underway when we came up with the hotel idea. A friend of mine was, at the time, CEO of Wilson Sporting Goods and was considering moving its HQ alongside our Midtown club. We were discussing an integrated concept, with Wilson potentially taking over one of our tennis courts for its Innovation Lab and our members being able to train there, so Wilson could observe real customers using its products.

“And then he pointed out that there was no hotel in the area. With my background, what was I thinking? Ours was an unbelievable hotel location, directly on the expressway between downtown – with its 40,000 hotel rooms – and the airport with its 18,000 rooms. We had free parking, great facilities on-site, we were adjacent to some of the great neighbourhoods if you wanted to go out. And no other hotels nearby.

“I immediately realised I needed to do it. That said, I was too chicken to build a really big one, so decided to build a boutique hotel that was big enough to be a ‘real’ hotel, but small enough that we didn’t have to go after corporate events to fill it.”

Is this now the blueprint for all Midtown Athletic Clubs?
“Hotels won’t work at all our locations –they’ll work incredibly well at some and not at others – but overall, what we’ve created at Midtown Chicago – that secret sauce which brings together angular boutique studios, layers of ‘wow’ and all our other design principles – will now be retrofitted across all our clubs as best we can.

“At least, that was the plan before COVID hit, and in fact we did manage to convert three more clubs during lockdown – projects we’d already started, and where we put the pedal down as hard as possible to get the work finished while the clubs were closed.

“But now, everything is on hold until we see what the new normal is.”

How did the business respond to lockdown?
“I personally went through all the cycles of grief and more: denial, anger, depression… It was incredibly hard: one minute we were at the top of our game, the next we were fighting for our lives.

One of the things I found hardest of all was furloughing 98 per cent of our staff – people who in many cases have been with us for decades – and how little the US government did to help.

In Canada, the government pays 75 per cent of people’s salary when they stay employed. The US paid zero.

In fact, in the US generally, while there has been a reasonable job done for very large businesses – government buying bonds to keep them afloat – there has been zero federal support for middle-market family businesses, either during lockdown or to bring them back afterwards.

So, I was wavering between anger and depression for a long time, having realised early on that this could go on for a long time: I told the team we had to hunker down and be ready for a 20-week problem. In the end, even that 20-week prediction wasn’t enough, but I think I under-estimated the ineptitude of our federal government. I know it’s a tough thing for any government to have to play through, but I just never thought it would be handled this badly.

We husbanded all the money we could and spent the best part of a month working with our banks: securing loans to finish the redevelopments and trying to defer principal payments. In Canada, the banks deferred for six months, no problem. In the US we pushed hard to get three months, and honestly it wasn’t worth the fight. In one case, we just decided to pay, even though we had no revenue.

That became our ethos generally: after briefly suspending paying all bills, we then returned to paying them all. Even if we were going to go broke, we didn’t want it said that the Schwartzes didn’t pay their bills!

Did you lobby government for support?
I did. I called members of Congress to try and get PPP extended to our sector, for example, but with no success. Realising we needed to focus at a more local and state level, I set up the Illinois Fitness Alliance, and we now represent hundreds of clubs.

We wanted to work with the City of Chicago and State of Illinois to establish a balance between safety and a survivable level of restrictions on club operations. We signed a pledge to follow the rules, we worked hard to build credibility and raise respect for what we do, we even set up our own self-policing group.

But again, we had very little influence. In the US, politicians just don’t trust our industry, understand or respect what we do, and I have to recognise that we have some bad actors in our sector and get too much bad press overall.

That said, I do think we’ve been treated unfairly. The authorities haven’t tried to integrate us as part of the solution. They – wrongly – see us as a place where irresponsible young people congregate and they lump us in with bars. The measures in force on gym operations in Chicago are very strict: a maximum of 10 people per class, for example, no matter how large your studio, and masks to be worn all the time while exercising.

So, we started from behind, we still don’t get the respect we deserve and the country’s healthcare system is still driven by sickness, not prevention. It’s very frustrating.

What measures have you put in place to re-open safely?
Member confidence is the single most important factor, and I say – without doing so lightly – that our cleanliness standards, protocols and marketing are the best I’ve seen in the industry.

We did a deep dive into the science of it and have the coolest stuff. We pioneered airPHX two or three years ago: an electric plasma chamber that breaks apart air molecules to temporarily create unstable atoms of oxygen.

One of these is gas-phase hydrogen peroxide, which even in these trace amounts is enough to kill viruses and bacteria while being totally safe for humans. After two hours, every surface in the club is sterile, which means our entire clubs are sterilised every night. And during opening hours, the clubs are permanently filled with air that kills viruses and bacteria. Everything the air touches is sanitised.

We also use ozone in the water for our laundry. The ozone kills all micro-organisms, meaning you can wash at lower temperatures and need less detergent.

I’m big on environmental sustainability, so that’s a big tick in the box for me. And then we use Aqueous Ozone Solution to clean all the machines too, because it kills the viruses and bacteria and then reverts to water again, which is better for our skin than all that sanitiser gel and wipes.

How is your business performing now?
One of our principles was: we won’t be the first to open. Better to open later than burn too much cash too quickly.

Our club in New York State opened in mid September. Georgia and Florida opened in June, the rest in July.

Georgia and South Florida got to about 45 per cent of previous usage in just a week or two. Use in Georgia is steady, but in Florida, numbers fell again as restrictions were reintroduced.

Montreal opened mid-July with around 45 per cent usage from the outset. Chicago is a mixed bag: 35-45 per cent, depending on location. We’ve just been allowing kids back in and they are slow to return, which means the families aren’t coming – and the reason figures were so high last year was all the families around the pool area.

Meanwhile, we’ve had about 12 per cent cancellations, but there’s an average of 39 per cent per cent of members on hold. This is a staggering number.

We didn’t charge people when we were closed – that’s not who we are. When we reopened, we gave members two free on-hold months. Now we’re open and things are safe, we’re stopping our free on hold policy on 1 October – that should be interesting.

What is your outlook now as a business?
As they say: When man plans, nature laughs. It’s like a game of poker: you can know the odds and learn the rules, but chance still plays an important role.

All you can do is play the cards you hold as smartly as possible. Not panic. Make considered moves that improve rather than reduce your chances of success. And keep looking at your pile of chips to make sure you don’t run out. Don’t make every bet so big that you can’t afford to make the next move.

With all this in mind, whereas in previous recessions we’ve actually grown through acquisition, this time our strategy is simply to stay alive to fight another day. We’ll wait for a vaccine, wait for the trauma to subside and take it from there. If there’s a vaccine by spring/summer 2021, we’ll be fine. Even if we only get back to 80–90 per cent of previous usage, we’ll be fine. And then hopefully we can finish our roll-out plan.

But there could still be a lot of economic dangers, we still don’t know what our government will do, and ultimately we don’t know if and when people will come back.

I like our odds: we have a great – and until now wildly successful – concept and I love our long-term prospects of rolling that out. We just need the bridge to get there. In the meantime, it’s painful. We just have to ride out this storm.

Sign up here to get HCM's weekly ezine and every issue of HCM magazine free on digital.
Midtown Athletic Club was founded by keen tennis player Alan Schwartz (pictured) and his father Kevie Schwartz
Midtown Athletic Club was founded by keen tennis player Alan Schwartz (pictured) and his father Kevie Schwartz
Steven Schwartz took inspiration from the hospitality industry to create high-end, design-led interiors for the clubs
Steven Schwartz took inspiration from the hospitality industry to create high-end, design-led interiors for the clubs
Workout areas are designed to be ‘space inefficient’ to give members the luxury of room to move
Workout areas are designed to be ‘space inefficient’ to give members the luxury of room to move
Chicago’s Midtown Athletic Club reopened in 2017 following a major renovation by DMAC architects
Chicago’s Midtown Athletic Club reopened in 2017 following a major renovation by DMAC architects
The clubs offer a wide range of classes.
The clubs offer a wide range of classes.
There’s a focus on organic food at the M-Cafe
There’s a focus on organic food at the M-Cafe
The Samadhi Studio at Midtown Chicago
The Samadhi Studio at Midtown Chicago
Spin classes are hugely popular
Spin classes are hugely popular
Midtown Chicago features an indoor and an outdoor pool. Hotel guests have access to all facilities
Midtown Chicago features an indoor and an outdoor pool. Hotel guests have access to all facilities
The Chicago club makes the most of an awkward triangular site
The Chicago club makes the most of an awkward triangular site
The entrance is wide and welcoming with a pale, calming colour palette
The entrance is wide and welcoming with a pale, calming colour palette
https://www.leisureopportunities.co.uk/images/2020/152312_637913.jpg
The CEO of Midtown Athletic Clubs tells of the brand’s rollercoaster journey throughout the COVID-19 pandemic
Midtown Athletic Clubs, Steven Schwartz,COVID-19, cleanliness
People
I think the cost of financing the Fitness World deal was more than compensated for by the £20m Fitness World brought in while the UK gyms were closed
People
Our facility isn’t for everyone. In daring to be different, we’re attracting people willing to commit to a fresh way of approaching health and fitness
People
The reopening of the industry, encouraging confidence in consumers and maintaining business is a collective responsibility
Features
Letters
Emerging successfully out of a crisis as significant as this pandemic requires visionary leadership, creative thinking and innovative collaboration
Features
feature
Your worst nightmare happens – a member with COVID-19 attends three group exercise classes in a period of 18 hours. Sarah Shortt explains how one operator dealt with this crisis while staying open throughout and avoiding community transmission
Features
feature
As winter draws nearer in the north of the world, it’s time to set your members up for their indoor workouts by taking advantage of the latest developments in indoor cycling
Features
feature
Gympass added personal training to its platform during the lockdown and has now delivered 30,000 sessions globally
Features
feature
The owner of Nisus Fitness in County Kerry, Joe O'Connor explains how MZ-Remote helped grow memberships during the pandemic and transform Nisus into a hybrid boutique
Features
feature
Active IQ optimised lockdown to create new opportunities for students and stakeholders
Features
feature
During the COVID-19 enforced lockdown, Club Kingswood, an independent 2,800-member multi-activity club in Essex, froze all its gym memberships with no charge, uncertain of what the effect would be on the future of its membership
Features
Latest News
Gains made getting people more physically active over the last few years were all but ...
Latest News
Mid Ulster District Council (MUDC) in Northern Ireland has won a landmark VAT case, which ...
Latest News
The government has pledged to invest £100m in supporting public leisure centres this winter, as ...
Latest News
Gyms in Liverpool,UK, have been given the go-ahead to reopen, following a dramatic week of ...
Latest News
Be Military Fit (BMF) has completed a restructuring project, designed to transform the outdoor fitness ...
Latest News
Rod Hill, former president of TRIB3 and director general of Anytime Fitness Iberia, has signed ...
Latest News
Persistent and rising levels of lifestyle disease across the world have exacerbated the effects of ...
Latest News
Customer experience software provider, AskNicely, has announced it will host a new virtual event called ...
Opinion
promotion
In a post-Covid world, member experience is more important than ever before. Your customers’ expectations have been heightened as the coronavirus continues to dominate our everyday lives.
Opinion: Why member experience is more important now than ever before
Opinion
promotion
Our world has changed since March and together, we are learning and adapting to how this sector can continue to thrive in this COVID conscious world.
Opinion: Why fitness clubs and facilities need to evolve in a COVID-conscious world
Featured supplier news
Featured supplier: Premier Software Solutions offers scalable software for single or multi-site businesses
Premier Software Solutions' flagship business management system, Core by Premier Software, is the leading single and multi-site solution designed specifically for the spa, wellness and leisure industries.
Featured supplier news
Featured supplier: Ritz Carlton co-founder joins Frontline Summit 2020 as keynote speaker
Frontline work has never been more important and frontline workers are the largest class of workers on the planet, as well as the most impactful group on the experience customers get.
Video Gallery
Freemotion CoachBike™
FreeMotion Fitness
Give your members the immersive cycling experience that keeps your members engaged – today and tomorrow. Read more
More videos:
Company profiles
Company profile: BLK BOX
The BLK BOX product range is built for athletes by athletes, includes modular storage systems, ...
Company profiles
Company profile: Incorpore Limited
Incorpore Ltd is a leading fitness and wellness company which has been successfully delivering solutions ...
Supplier Showcases
Supplier showcase - Digital gym floor
Supplier Showcases
Supplier showcase - Bouncing back
Catalogue Gallery
Click on a catalogue to view it online
Directory
Exercise equipment
Power Plate: Exercise equipment
Direct debit solutions
Harlands Group: Direct debit solutions
Spa software
SpaBooker: Spa software
Hydrotherapy / spa fragrances
Kemitron GmbH: Hydrotherapy / spa fragrances
Flooring
Total Vibration Solutions / TVS Sports Surfaces: Flooring
Fitness Software
FunXtion International BV: Fitness Software
Fitness equipment
TRX Training: Fitness equipment
Red Light Therapy
 Red Light Rising: Red Light Therapy
Wearable technology solutions
MyZone: Wearable technology solutions
Management software
fibodo Limited: Management software
Property & Tenders
11 - 25 Union St, London SE1 1SD
Bankside Open Spaces Trust
Property & Tenders
Waltham Abbey, Essex
Lee Valley Regional Park Authority
Property & Tenders
Diary dates
03-06 Nov 2020
Online,
Diary dates
12 Nov 2020
Virtual, United States
Diary dates
17 Nov 2020
Loughborough University, Loughborough, United Kingdom
Diary dates
27-28 Nov 2020
Athena, Leicester, United Kingdom
Diary dates
03-03 Dec 2020
Virtual,
Diary dates
08-09 Dec 2020
Raffles City Convention Centre, Singapore, Singapore
Diary dates
02-04 Feb 2021
Ericsson Exhibition Hall, Ricoh Arena, Coventry, United Kingdom
Diary dates
23-26 Feb 2021
IFEMA, Madrid, Spain
Diary dates
03-04 Mar 2021
NEC, Birmingham, United Kingdom
Diary dates
03-06 Jun 2021
Expo Centre & Riviera di Rimini, Italy
Diary dates
16-17 Jun 2021
ExCeL London, London, United Kingdom
Diary dates
01-07 Dec 2022
tbc, Dunedin, New Zealand
Diary dates

features

Interview: Steven Schwartz

From top of its game to fighting for its life, Midtown Athletic Clubs’ rollercoaster COVID story will resonate with operators across the sector. Its CEO has a frank conversation with Kate Cracknell

Published in Health Club Management 2020 issue 8
Steven Schwartz started his career in hospitality before joining Midtown in 1987 and later becoming CEO
Steven Schwartz started his career in hospitality before joining Midtown in 1987 and later becoming CEO
Member confidence is the single most important factor, and I say – without doing so lightly – that our cleanliness standards, protocols and marketing are the best I’ve seen in the industry

Originally founded by his father and grandfather in 1970, and with his son Alex now making his presence felt as director of marketing, Midtown Athletic Clubs is – as CEO Steven Schwartz explains – a four-generation business.

“Dad was a great tennis player: winner of nine national championships and seven state championships. We never had a vacation that didn’t revolve around a tennis tournament,” Schwartz laughs. “He was also passionate about real estate, and what the business did was bring this together with tennis. The clubs were tennis facilities and my dad would get involved in the tennis programming, but the business model had a real estate focus and we always had partners in the clubs.

“In my father’s mind, I think it was an inevitability that his kids would join the family business,” he says, “but I went down the path of hospitality, studying at Cornell hotel school. My dad’s fire was stoked when my career brought me back to Chicago as director of development for Hyatt Hotels. I got leaned on and I fell for it!

“I joined Midtown in 1987 and started looking at the model. The business certainly wasn’t failing, but tennis wasn’t performing as I thought it could. We started adding elements of fitness, turning Midtown into a multi-recreational business, and learned how to market it. We soon realised this was a more profitable model.

“Dad wasn’t really interested in fitness though, so by 1990 he turned to me and said: ‘You do it!’ We renovated, repositioned and slowly, over a period of about 15 years, bought out all our partners to consolidate ownership.

“We now own eight Midtown Athletic Clubs outright, including ownership of the property itself: four in Chicago and four up and down the eastern seaboard, including one in Canada. We also manage 25 clubs for other owners – hospitals, corporations and so on – which is an area of the business dad started and I’ve grown.

“Management contracts are a comparatively small part of our cashflow though. Our eight owned clubs are all very large: US$8m in revenue a year for our smallest club; US$13m for our average club; and over US$40m a year at Midtown Athletic Club Chicago – dad’s original tennis club.

“At least, those were the revenues pre-COVID...”

What sets Midtown apart?
“What really separates us is our focus on environments, experiences, feelings. This is how we differentiate ourselves from others, and it comes from my background in high-end experiences at hotels and resorts. It’s about lifestyle – creating spaces that make you feel uplifted and where you want to hang out.

“I’m into art and design and have been a photography collector all my adult life. I’m fascinated by how the aesthetic world – the abstract use of composition, tone, depth of meaning – translates into everyday life, even without us always knowing it. Fuelled by this interest, our design philosophy includes a number of interesting principles.

“‘Space is Luxury’ is one such principle. Space is inefficient. It goes against everything you usually try and do when you design a gym, fitting in as much equipment as possible. By contrast, we’ve created boulevards on the gym floor where two, three, even four people can pass each other comfortably. We don’t even have stairs at both ends of the floors – just at one end – so people have to engage in a stroll, which is a wonderful feeling.

“This dovetails in with a concept we call Alone Together, which is about being around others even if you aren’t directly interacting with them. It recognises that fitness is often a solitary pursuit, but that people still want the social connection of being around others in a space they enjoy spending time in.

“Another design principle is Natural Materials: there’s a real resonance at an emotional level when you see something that’s real.

“Light is another. We have big windows in our ‘do it yourself’ fitness areas, and in our social spaces where possible, to offer uplifting views. The studios are the complete opposite: these are controlled environments where we create an experience, and each experience is dictated by the class that takes place there. I want these rooms to be angular so they lean in to what they are. A lot of other studios already do that well, but I wanted to lean into that, bringing it into our big clubs to create a series of boutique spaces.

“We have entrance areas before the studios, too: it isn’t just a case of walk up, open the door, walk in. As you approach each studio, there’s an area of transition, setting the tone as you move from one space into another and recalibrating your senses. I call it Layers of Wow, where you peel back one layer at a time. In our Chicago club, for example, as you approach our yoga studio Samadhi, you enter a quiet, moodily-lit ante room with a huge Buddha statue. That sets the tone. Then you go into the studio itself and you see a tree in the middle – another ‘wow’.

“Overall, it’s about creating something a little less efficient, a little more fun. Somewhere you can lose yourself for a couple of hours... hence my dislike of signs and clocks!

What was your rationale for building a hotel at the Chicago club?
“The business is now 50 years old, so we’ve had to reinvent ourselves a few times: first adding fitness, then big outdoor pools and recreation areas and now, at Midtown Athletic Club Chicago, a hotel and farm-to-table restaurant. We still have 16 indoor tennis courts at the club – something we did backflips to save – but essentially we’ve dismantled the whole club and rebuilt it. You gotta love my father for letting me do this!

“The reconstruction project was actually already underway when we came up with the hotel idea. A friend of mine was, at the time, CEO of Wilson Sporting Goods and was considering moving its HQ alongside our Midtown club. We were discussing an integrated concept, with Wilson potentially taking over one of our tennis courts for its Innovation Lab and our members being able to train there, so Wilson could observe real customers using its products.

“And then he pointed out that there was no hotel in the area. With my background, what was I thinking? Ours was an unbelievable hotel location, directly on the expressway between downtown – with its 40,000 hotel rooms – and the airport with its 18,000 rooms. We had free parking, great facilities on-site, we were adjacent to some of the great neighbourhoods if you wanted to go out. And no other hotels nearby.

“I immediately realised I needed to do it. That said, I was too chicken to build a really big one, so decided to build a boutique hotel that was big enough to be a ‘real’ hotel, but small enough that we didn’t have to go after corporate events to fill it.”

Is this now the blueprint for all Midtown Athletic Clubs?
“Hotels won’t work at all our locations –they’ll work incredibly well at some and not at others – but overall, what we’ve created at Midtown Chicago – that secret sauce which brings together angular boutique studios, layers of ‘wow’ and all our other design principles – will now be retrofitted across all our clubs as best we can.

“At least, that was the plan before COVID hit, and in fact we did manage to convert three more clubs during lockdown – projects we’d already started, and where we put the pedal down as hard as possible to get the work finished while the clubs were closed.

“But now, everything is on hold until we see what the new normal is.”

How did the business respond to lockdown?
“I personally went through all the cycles of grief and more: denial, anger, depression… It was incredibly hard: one minute we were at the top of our game, the next we were fighting for our lives.

One of the things I found hardest of all was furloughing 98 per cent of our staff – people who in many cases have been with us for decades – and how little the US government did to help.

In Canada, the government pays 75 per cent of people’s salary when they stay employed. The US paid zero.

In fact, in the US generally, while there has been a reasonable job done for very large businesses – government buying bonds to keep them afloat – there has been zero federal support for middle-market family businesses, either during lockdown or to bring them back afterwards.

So, I was wavering between anger and depression for a long time, having realised early on that this could go on for a long time: I told the team we had to hunker down and be ready for a 20-week problem. In the end, even that 20-week prediction wasn’t enough, but I think I under-estimated the ineptitude of our federal government. I know it’s a tough thing for any government to have to play through, but I just never thought it would be handled this badly.

We husbanded all the money we could and spent the best part of a month working with our banks: securing loans to finish the redevelopments and trying to defer principal payments. In Canada, the banks deferred for six months, no problem. In the US we pushed hard to get three months, and honestly it wasn’t worth the fight. In one case, we just decided to pay, even though we had no revenue.

That became our ethos generally: after briefly suspending paying all bills, we then returned to paying them all. Even if we were going to go broke, we didn’t want it said that the Schwartzes didn’t pay their bills!

Did you lobby government for support?
I did. I called members of Congress to try and get PPP extended to our sector, for example, but with no success. Realising we needed to focus at a more local and state level, I set up the Illinois Fitness Alliance, and we now represent hundreds of clubs.

We wanted to work with the City of Chicago and State of Illinois to establish a balance between safety and a survivable level of restrictions on club operations. We signed a pledge to follow the rules, we worked hard to build credibility and raise respect for what we do, we even set up our own self-policing group.

But again, we had very little influence. In the US, politicians just don’t trust our industry, understand or respect what we do, and I have to recognise that we have some bad actors in our sector and get too much bad press overall.

That said, I do think we’ve been treated unfairly. The authorities haven’t tried to integrate us as part of the solution. They – wrongly – see us as a place where irresponsible young people congregate and they lump us in with bars. The measures in force on gym operations in Chicago are very strict: a maximum of 10 people per class, for example, no matter how large your studio, and masks to be worn all the time while exercising.

So, we started from behind, we still don’t get the respect we deserve and the country’s healthcare system is still driven by sickness, not prevention. It’s very frustrating.

What measures have you put in place to re-open safely?
Member confidence is the single most important factor, and I say – without doing so lightly – that our cleanliness standards, protocols and marketing are the best I’ve seen in the industry.

We did a deep dive into the science of it and have the coolest stuff. We pioneered airPHX two or three years ago: an electric plasma chamber that breaks apart air molecules to temporarily create unstable atoms of oxygen.

One of these is gas-phase hydrogen peroxide, which even in these trace amounts is enough to kill viruses and bacteria while being totally safe for humans. After two hours, every surface in the club is sterile, which means our entire clubs are sterilised every night. And during opening hours, the clubs are permanently filled with air that kills viruses and bacteria. Everything the air touches is sanitised.

We also use ozone in the water for our laundry. The ozone kills all micro-organisms, meaning you can wash at lower temperatures and need less detergent.

I’m big on environmental sustainability, so that’s a big tick in the box for me. And then we use Aqueous Ozone Solution to clean all the machines too, because it kills the viruses and bacteria and then reverts to water again, which is better for our skin than all that sanitiser gel and wipes.

How is your business performing now?
One of our principles was: we won’t be the first to open. Better to open later than burn too much cash too quickly.

Our club in New York State opened in mid September. Georgia and Florida opened in June, the rest in July.

Georgia and South Florida got to about 45 per cent of previous usage in just a week or two. Use in Georgia is steady, but in Florida, numbers fell again as restrictions were reintroduced.

Montreal opened mid-July with around 45 per cent usage from the outset. Chicago is a mixed bag: 35-45 per cent, depending on location. We’ve just been allowing kids back in and they are slow to return, which means the families aren’t coming – and the reason figures were so high last year was all the families around the pool area.

Meanwhile, we’ve had about 12 per cent cancellations, but there’s an average of 39 per cent per cent of members on hold. This is a staggering number.

We didn’t charge people when we were closed – that’s not who we are. When we reopened, we gave members two free on-hold months. Now we’re open and things are safe, we’re stopping our free on hold policy on 1 October – that should be interesting.

What is your outlook now as a business?
As they say: When man plans, nature laughs. It’s like a game of poker: you can know the odds and learn the rules, but chance still plays an important role.

All you can do is play the cards you hold as smartly as possible. Not panic. Make considered moves that improve rather than reduce your chances of success. And keep looking at your pile of chips to make sure you don’t run out. Don’t make every bet so big that you can’t afford to make the next move.

With all this in mind, whereas in previous recessions we’ve actually grown through acquisition, this time our strategy is simply to stay alive to fight another day. We’ll wait for a vaccine, wait for the trauma to subside and take it from there. If there’s a vaccine by spring/summer 2021, we’ll be fine. Even if we only get back to 80–90 per cent of previous usage, we’ll be fine. And then hopefully we can finish our roll-out plan.

But there could still be a lot of economic dangers, we still don’t know what our government will do, and ultimately we don’t know if and when people will come back.

I like our odds: we have a great – and until now wildly successful – concept and I love our long-term prospects of rolling that out. We just need the bridge to get there. In the meantime, it’s painful. We just have to ride out this storm.

Sign up here to get HCM's weekly ezine and every issue of HCM magazine free on digital.
Midtown Athletic Club was founded by keen tennis player Alan Schwartz (pictured) and his father Kevie Schwartz
Midtown Athletic Club was founded by keen tennis player Alan Schwartz (pictured) and his father Kevie Schwartz
Steven Schwartz took inspiration from the hospitality industry to create high-end, design-led interiors for the clubs
Steven Schwartz took inspiration from the hospitality industry to create high-end, design-led interiors for the clubs
Workout areas are designed to be ‘space inefficient’ to give members the luxury of room to move
Workout areas are designed to be ‘space inefficient’ to give members the luxury of room to move
Chicago’s Midtown Athletic Club reopened in 2017 following a major renovation by DMAC architects
Chicago’s Midtown Athletic Club reopened in 2017 following a major renovation by DMAC architects
The clubs offer a wide range of classes.
The clubs offer a wide range of classes.
There’s a focus on organic food at the M-Cafe
There’s a focus on organic food at the M-Cafe
The Samadhi Studio at Midtown Chicago
The Samadhi Studio at Midtown Chicago
Spin classes are hugely popular
Spin classes are hugely popular
Midtown Chicago features an indoor and an outdoor pool. Hotel guests have access to all facilities
Midtown Chicago features an indoor and an outdoor pool. Hotel guests have access to all facilities
The Chicago club makes the most of an awkward triangular site
The Chicago club makes the most of an awkward triangular site
The entrance is wide and welcoming with a pale, calming colour palette
The entrance is wide and welcoming with a pale, calming colour palette
https://www.leisureopportunities.co.uk/images/2020/152312_637913.jpg
The CEO of Midtown Athletic Clubs tells of the brand’s rollercoaster journey throughout the COVID-19 pandemic
Midtown Athletic Clubs, Steven Schwartz,COVID-19, cleanliness
Latest News
Gains made getting people more physically active over the last few years were all but ...
Latest News
Mid Ulster District Council (MUDC) in Northern Ireland has won a landmark VAT case, which ...
Latest News
The government has pledged to invest £100m in supporting public leisure centres this winter, as ...
Latest News
Gyms in Liverpool,UK, have been given the go-ahead to reopen, following a dramatic week of ...
Latest News
Be Military Fit (BMF) has completed a restructuring project, designed to transform the outdoor fitness ...
Latest News
Rod Hill, former president of TRIB3 and director general of Anytime Fitness Iberia, has signed ...
Latest News
Persistent and rising levels of lifestyle disease across the world have exacerbated the effects of ...
Latest News
Customer experience software provider, AskNicely, has announced it will host a new virtual event called ...
Latest News
In breaking news, HCM understands the UK government has removed gyms and fitness facilities from ...
Latest News
Globally, gyms have, on average, seen nearly 70 per cent of their pre-lockdown members return ...
Latest News
A UK government U-turn – just announced – will see gyms and leisure centres staying open ...
Opinion
promotion
In a post-Covid world, member experience is more important than ever before. Your customers’ expectations have been heightened as the coronavirus continues to dominate our everyday lives.
Opinion: Why member experience is more important now than ever before
Opinion
promotion
Our world has changed since March and together, we are learning and adapting to how this sector can continue to thrive in this COVID conscious world.
Opinion: Why fitness clubs and facilities need to evolve in a COVID-conscious world
Featured supplier news
Featured supplier: Premier Software Solutions offers scalable software for single or multi-site businesses
Premier Software Solutions' flagship business management system, Core by Premier Software, is the leading single and multi-site solution designed specifically for the spa, wellness and leisure industries.
Featured supplier news
Featured supplier: Ritz Carlton co-founder joins Frontline Summit 2020 as keynote speaker
Frontline work has never been more important and frontline workers are the largest class of workers on the planet, as well as the most impactful group on the experience customers get.
Video Gallery
Freemotion CoachBike™
FreeMotion Fitness
Give your members the immersive cycling experience that keeps your members engaged – today and tomorrow. Read more
More videos:
Company profiles
Company profile: BLK BOX
The BLK BOX product range is built for athletes by athletes, includes modular storage systems, ...
Company profiles
Company profile: Incorpore Limited
Incorpore Ltd is a leading fitness and wellness company which has been successfully delivering solutions ...
Supplier Showcases
Supplier showcase - Digital gym floor
Supplier Showcases
Supplier showcase - Bouncing back
Catalogue Gallery
Click on a catalogue to view it online
Directory
Exercise equipment
Power Plate: Exercise equipment
Direct debit solutions
Harlands Group: Direct debit solutions
Spa software
SpaBooker: Spa software
Hydrotherapy / spa fragrances
Kemitron GmbH: Hydrotherapy / spa fragrances
Flooring
Total Vibration Solutions / TVS Sports Surfaces: Flooring
Fitness Software
FunXtion International BV: Fitness Software
Fitness equipment
TRX Training: Fitness equipment
Red Light Therapy
 Red Light Rising: Red Light Therapy
Wearable technology solutions
MyZone: Wearable technology solutions
Management software
fibodo Limited: Management software
Property & Tenders
11 - 25 Union St, London SE1 1SD
Bankside Open Spaces Trust
Property & Tenders
Waltham Abbey, Essex
Lee Valley Regional Park Authority
Property & Tenders
Diary dates
03-06 Nov 2020
Online,
Diary dates
12 Nov 2020
Virtual, United States
Diary dates
17 Nov 2020
Loughborough University, Loughborough, United Kingdom
Diary dates
27-28 Nov 2020
Athena, Leicester, United Kingdom
Diary dates
03-03 Dec 2020
Virtual,
Diary dates
08-09 Dec 2020
Raffles City Convention Centre, Singapore, Singapore
Diary dates
02-04 Feb 2021
Ericsson Exhibition Hall, Ricoh Arena, Coventry, United Kingdom
Diary dates
23-26 Feb 2021
IFEMA, Madrid, Spain
Diary dates
03-04 Mar 2021
NEC, Birmingham, United Kingdom
Diary dates
03-06 Jun 2021
Expo Centre & Riviera di Rimini, Italy
Diary dates
16-17 Jun 2021
ExCeL London, London, United Kingdom
Diary dates
01-07 Dec 2022
tbc, Dunedin, New Zealand
Diary dates
Search news, features & products:
Find a supplier:
AskNicely
AskNicely