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Sunset Empire Case Study
Imagine a world without recreation centers. While you may not be overly concerned at the prospect, the stats may change your mind. Community recreation centers and parks have been drivers of positive outcomes in our nation’s cities for over a century. They are currently serving as support for eLearning families with programs that allow students to log into class before engaging in play. They are among the great givers of food for our nation’s youth, providing 560 million meals per year via after school programs. Most importantly, community recreation centers support both a healthy lifestyle and community engagement through their fitness centers and myriad of active programming. A world without recreation centers is one that loses those benefits.
Thankfully, that’s not our current reality. However, since the Great Recession of 2008, parks and recreation funding has dipped sharply. While many facilities are supported through a municipality’s general fund, budget shortfalls, which are likely in 2021 thanks to the Coronavirus pandemic, threaten to leave them with a smaller piece of the pie. The answer may be developing ways to generate more income and increasing their cost recovery rate.
This idea is not new, but to truly drive revenue for a community recreation center- the type of revenue that helps it serve all members of the community- a great deal of forethought and an innovative approach is needed.
Below are several approaches that we’ve seen achieve success for recreation centers throughout the country. We also offer a few examples of recreation systems that are finding innovative ways to accomplish their goals.
What do citizens want?
It seems simple, but we when it comes to programming, we have a tendency to either do what has always been done, what we’ve been told will generate revenue, or what we see the competition doing. However, success and relevancy are often found in simply giving people what they want. The most traditional way to accomplish this is through online and mail-in surveys.
According to an article for Parks and Rec Business, the Parks, Recreation & Libraries Department of Roseville, CA asked parents of swim lesson participants what they valued most from a swimming program. Answers related to pool safety, fun activities, and the demeanor of the instructor. In response to this survey, the department changed their approach to both training swim instructors and building the activities associated with swim instruction. While technical instruction was highly important, they began to put a high priority on making lessons fun for participants.
It’s also critical to examine the data. What age groups are represented in your community? What percentage of them take part in the types of programming your facility offers (or are considering)? What private and public entities offer similar programming? Answers to these questions can prove critical in determining the direction of your programming as well. By the way, the Sports Facilities Companies can help you with this through services like our optimization studies and recreation master planning. Contact us today to learn more!
Develop a Plan
Generating revenue is not as simple as adding a set of programs. It takes a thoughtful approach to understanding the needs of your citizens and developing programming that meets those needs. As documented in a report by Beth Pinkston of San Jose State University, the San Jose (CA) Parks, Recreation, and Neighborhood Services Department (PRNS) decided that they wanted to increase their cost recovery level to forty percent in the years between 2009 and 2014. This would mean only 60 percent of funding came from the city’s general fund. To generate the revenues necessary to accomplish this goal, they developed a “Pricing and Revenue Policy.” The policy became the standard for how all decisions on pricing and fees were evaluated and included a set of guiding principles. The guide helped them decide what services should be subsidized, how to calculate the cost of service, how to determine their cost recovery goals, how to provide scholarships to create greater access to facilities, and to determine additional paths for revenue generation, including sponsorships and grants. Overall, the approach was a success, increasing their cost recovery to under 40 percent by 2014.
Finding complementary partners can elevate a community recreation center’s programming and, perhaps, the facility itself. In a growing number of communities, hospitals and medical systems are starting to partner with recreation centers. Not only do they share a common mission to produce healthy outcomes for the community, but both sides can find a distinct benefit. In some communities, health systems are partnering with recreation systems to develop wellness centers within the recreation center setting. They are also partnering on effective programming that builds on the expertise of medical staff. In return, the medical systems get a captive audience and connection to the local community.
Other effective partnerships are smaller in scale but equally important. Vendors who develop programming or provide food and beverage are critical because their services both enhance what a facility has to offer and reduces the cost of using internal resources to provide these services.
Keep an Eye Out for Opportunity
Lastly, if you pay attention to your residents and the environment around you, you’re bound to find opportunities. Going back to Roseville, they noticed that guests in their facilities often forgot small items such as swim goggles or towels. Seeing the opportunity, they added a shop to their aquatic facility to sell these convenience items. According to the Parks and Rec Business article, the shop makes $600-1,000 per month for the facility.
At the SF Companies, we believe in the power of recreation centers to transform communities and are here to help with revenue generation services, to learn more contact us today!