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Pumped up with cash and breathless over the prospect of higher room rates, New York City hotels are running after the health and fitness market.
Moving as if on an endorphin rush, many chains are seizing on gyms as a way to muscle through a city crowded with competitors. Some are aligning themselves with established spas and health clubs. Others are spending millions of dollars to build lavish workout centers.
Apple Core Hotels is so smitten with the fitness idea that it's building a hotel in Times Square that will have exercise equipment in many guest rooms and a hot tub on the roof. Another developer is buying the owntown Athletic Club, on West Street, and opening a 135-room hotel above it.
But the exercise may not bring the desired results. The gym business is distinct from the lodging industry, and just as cutthroat. Hotels could invest a fortune, only to find their gyms empty and the promise of outside memberships unfulfilled. Even worse, some experts say, the gyms may do little to influence occupancy rates, particularly as new hotels open.
"Many of the hotels getting into this business don't know what they're doing," says Patty Monteson, owner of Health Fitness Dynamics Inc., a spa consulting company based in Pompano Beach, Fla. "They are going to get bloodied."
Even hotel operators who are pursuing fitness deals aren't sure it's worth it.
"It's certainly debatable," says Barry Sternlicht, chairman...