“On the Road” – Athletic Business September 2008

Story by Meredith Nelson / March 3, 2009

On the Road

By: Andrew Cohen
September 2008

Summary: A partnership targeting runners gives one health club a route to the tourist trade.

You emerge from the hotel elevator, having traded your business suit for running attire, pad across the lobby floor in your New Balance shoes, and ask the concierge if he or she can direct you to a good five-mile loop in the downtown area. The concierge, unfortunately, is wearing a name tag bearing a hometown a thousand miles away, and in any event lives in the suburbs, only coming downtown to go to work.

In short, no. You’re on your own.

A new company, City Running Tours (www.cityrunningtours.com), is seeking to capitalize on just such a situation by offering guided running tours of New York City, Chicago, San Diego and Washington, D.C., as well as the two most recent additions: Austin, Texas, and Charleston, S.C. A runner simply logs onto the site and, via active.com, pays $60 for a six-mile run (additional miles cost an extra $6). In return, each runner gets an experienced and knowledgeable running partner for training or touring (and at the desired pace), a set route or a customized itinerary, a City Running Tours T-shirt, a souvenir photo, discounts to local running stores, and product samples and information.

In Charleston, a health club owner, Meredith Nelson of PrimeTime Fitness, is seeking to capitalize on the situation, as well. When City Running Tours in January added this tourist destination — described by the local convention and visitors bureau with the tagline, “Charleston — Where History Lives” — Nelson was at the helm.

Presumably, such a partnership could eventually add more than a trickle to her revenue stream, but Nelson regards it with a characteristically relaxed attitude. “I don’t know my cut,” she says with a laugh. “I’m more of a fitness person than a businessperson. It’s like my play money; it’s not something I depend on for the club to operate. I get a check and I say, ‘Oh, yay.’ ”

Michael Gazaleh, founder of City Running Tours and New York’s tour operator, thought originally about franchising the concept, complete with a franchise fee, but decided that the cost to interested operators “might have been a little overwhelming to them,” he says. The revenue-share arrangement he settled on instead calls for operators to receive a minimum of 80 percent of the money, with incentives providing for the possibility of upping that figure to as much as 90 percent. Active.com gets a 6.5 percent surcharge from each runner (it comes to $3.90 for a six-mile run), and the tour operator pays tour guides out of its 80 percent. City Running Tours administers the transactions, which all occur online. Operators help defray the company’s advertising costs in each of the cities, with the amount dependent on the size of the local market; Nelson pays City Running Tours $150 a month for national and local publicity.

Nelson is both a runner (she’s one of 75 members of the Charleston Running Club) and a club operator, which makes her unique among the half-dozen City Running Tours operators. It also makes her an enthusiastic believer in the concept, since she tends to view it as an extension of services, such as personal training, that she already offers. Her only quibble is the group rate — a couple wanting to run together pays double the money, though each runner gets his or her own guide.

“I think the per-person price is reasonable,” she says. “When I’m in another city and want to work out, I’ll find a gym and I’ll work with a personal trainer. I tend to splurge when I’m away. I’m not so sure I would structure the prices the same way for a group run. I offer individual personal training for $70, and my price only jumps to $80 for two people.”

Nelson’s primary task is ensuring she has runners — and different types of runners — available to serve as guides whenever a call comes in. She relies on regular mass e-mails, keeping track of which guides are available at what times, which are able to run a six-minute versus a 10-minute mile, and so on. Fortunately, most visitors to the area schedule their runs far in advance, and it’s not always necessary to rely on the services of one runner — “I’ve got enough people,” she says, “that if I didn’t have a marathoner available, I could piece together a 20-mile run with more than one guide.”

Nelson’s other job has been to come up with routes in advance, in consultation with her guides, that account for tourist draws — historic homes and plantations, parks, state historical sites, the harbor, the downtown, Old City Market and Cabbage Row, to name a few. (It’s unfortunate, really, that Fort Sumter is unreachable without wings or pontoons.) Runners usually only sign up when they have some specific destination in mind — after all, a person can always just find a bike or pedestrian path, and go. Nelson recalls one client who wanted to see as much water as possible, but had a phobia that precluded running over the Cooper River Bridge — just the sort of person in need of help.

“If you’re training for a marathon, you want a route where you can avoid stops and starts,” Nelson says. “And for most tourists, it’s easy to get lost and easy to find themselves in not-so-friendly territory, for lack of a better phrase. It’s helpful to have a guide; people appreciate it. If they were to make a wrong turn out of their hotel, they might not have a good experience.”

New York, America’s number-one tourist destination, is City Running Tours’ top city, Gazaleh reports — eight to 10 guided runs a week in this, its third year in operation. “There are many great places to run — that’s why we’re here,” Gazaleh says. “We want to give runners the best route for whatever they’re doing, we try to give them a true local experience, and we keep it really personal.”

Nelson says the Charleston operation started slowly after its January debut, with tours topping out at about two a week before the South Carolina heat set in (running is a hard sell in the summer months). But she knows all about how long it takes to grow any business, having started her fitness studio out of her beach house before expanding once, moving into a dedicated key-access location, and then expanding that location to its current 2,400 square feet. This fall, after the weather breaks, she’ll get a better sense of how much of a revenue boost she can expect from offering running tours; she knows her fitness facility’s location across the harbor in Sullivan’s Island probably precludes her from successfully up-selling running clients on personal training or other workout services.

“They’d have to cross three bridges to get to me, and there’s probably a gym right around the corner from wherever they are, so it’s not like we can say, ‘Go for your run and come over to the gym afterwards,’ ” Nelson says. “That’s okay — it’s good PR. People think it’s a cool idea.”