The company is a byword for luxury lifestyle services in a residential setting

The founder and CEO of American Leisure and his COO talk to Rhianon Howells about the evolution of the 43-year-old company from a New York-based pools and fitness operator into a global leader in the delivery of ‘lifestyle’ services.

The history of American Leisure is in many ways the American Dream made real. At the age of 18, Steve Kass was working as a lifeguard on Coney Island in Brooklyn, the gloriously kitsch seaside resort beloved of New Yorkers. But Kass wasn’t interested in the amusement park, boardwalk or hot dog stands. “Across from my post, there was a new luxury housing development with a swimming pool,” he recalls. “I found it so interesting that a residential development should be offering recreational facilities… that was the start of the business.”

Fast-forward more than four decades and the leisure management company Kass set up in 1967 as a three-man operation now employs more than 500 people and operates 75 leisure facilities – including pools, fitness centres, spas and lifestyle amenities – primarily within luxury housing developments, but also within hotels and resorts and as standalone sites.

Within the New York metropolitan area, where most of its managed facilities are based, the company is a byword for luxury lifestyle services in a residential setting, with big-name clients including the Trump Organisation and Tishman Speyer. But although the US, and New York in particular, remain its largest market, the company’s horizons have broadened dramatically in recent years.

Having already garnered international experience through its design and consulting arm, the company signed a deal last year with Saudi Oger – a hugely influential Saudi Arabian company owned by Sheikh Ayman Hariri and employing more than 50,000 people – to deliver almost a million square feet of leisure facilities, plus ongoing management services, to the King Abdullah University of Science and Technology (KAUST). An iconic new development on the eastern shore of the Red sea at Thuwal, about 80km north of Saudi Arabia’s second largest city, Jeddah, KAUST is the vision of King Abdullah himself. Covering 36sq km, this post-graduate research institute is not only Saudi Arabia’s first co-ed university but is also the first to accept academics from around the world, with faculty and students from more than 60 nations already enrolled.

So how exactly did this once-small regional operator become the kind of company able to command so prestigious a project? And where do its founder and his new right-hand man – Tom Johnston was appointed as COO in November 2008 – see its future?

FUN AND PARTICIPATION

Although American Leisure started out offering recreational management services to swimming pools and country clubs, it wasn’t long before Kass had achieved his goal of working with residential property developers, designing and managing leisure offerings that would help them market their real estate.

Then, in the 70s and 80s, the business diversified into tennis, racquetball and eventually fitness clubs. “We started to introduce the Nautilus line of equipment, which at that time was almost a generic name for exercise equipment, into our racquets clubs,” says Kass. “That was, I think, the beginning of the trend towards fitness clubs as we know them today.”

True to Kass’s original vision, the design and operation of swimming pools, including several summer-only facilities, has also remained a high-profile part of the business.

But it’s in the arena of lifestyle services within residential communities that American Leisure has perhaps the greatest claim to be a pioneer. While property developers have been incorporating pools and fitness centres into their offerings for decades, American Leisure was one of the first companies to take the idea of ‘recreation at home’ and run with it, delivering a complete lifestyle concept. In addition to gyms, pools and spas, the company equips its communities with cinemas, libraries, communal saunas and demonstration kitchens, as well as extensive social programmes – covering everything from dance classes and sporting events to parties – and the people to run them.

In New York, the concept has been so successful that no self-respecting luxury development is now complete without some kind of lifestyle offering, but American Leisure remains at the vanguard of the trend. “I don’t want to be immodest, but we did start it,” says Kass. “And we’ve come up with many innovative ideas that have gone on to become across-the-board offerings. For example, in one rental building aimed at young professionals, we created a breakfast club where people could stop off and get a healthy breakfast on their way to work.”

While healthy living is central to the American Leisure philosophy, the emphasis is always on fun and participation, says Johnston. “We recognise that fitness is one of the cornerstones of a healthy lifestyle, but we know that [working out] isn’t for everybody. So instead we’re creating a different kind of model that allows us to meet people wherever they’re at on the wellness continuum, through social programming that encourages individuals to adopt a more active lifestyle while getting to know their neighbours. “

Giving the company another edge is the fact that it has its own, modest property management arm, comprising 15 residential communities in the New York suburbs, all of which have a significant lifestyle offering. “It’s a small operation,” says Johnston, “but it gives us an additional perspective on what’s going on with the end user.”

HEALTHY COMMUNITIES

Johnston started his career as a gym instructor in the early 80s before moving first into sales and then into management. In 1990 he became general manager of the Weymouth Club, one of the best-known fitness clubs on the east coast of the US, before joining the Saw Mill Sports Management chain – whose owner Curt Beusman was a founding member of IHRSA – as vice president of operations in 1997.

By the time he left that company to join American Leisure 18 months ago, he had amassed a huge wealth of experience in fitness industry operations – but, by his own admission, his knowledge of running lifestyle amenities in residential buildings was scant. “The opportunity to move into the lifestyle segment really intrigued me, but it was all new,” he says. “So I really had to jump into the trenches, look around me and get to understand the business as best I could.”

Having come on board just as the recession really began to bite, his first task was to assess the business from the ground up; make staffing changes, including cuts, where needed; and implement some new best practices. It’s partly as a result of those measures, he says, that the company has “not only survived but is going to flourish as it comes out of this recession; we’ve actually taken this opportunity to strengthen our core competencies and we’re now poised to really grow the brand.”

Johnston hadn’t been with American Leisure six months, however, before he had another very specific focus: the KAUST project. The opportunity was, he admits, more the result of serendipity than strategy. “One of our residents in New York recommended us to Saudi Oger,” he says.” “He’d had such a wonderful experience with American Leisure that, when they were looking for a company to develop a lifestyle offering at KAUST, they called us.”

The goal is simple yet ambitious: to create the healthiest community in Saudi Arabia. Facilities include two large multi-sports clubs with segregated male and female fitness centres, as well as a climbing wall and a 16-lane bowling alley; a racquets club for tennis, squash, badminton and racquetball; a university fitness centre; and a recreational facility offering billiards, table tennis and Wii games. There are also 14 parks, open-air swimming pools, outdoor tennis courts, a 5,000-seat sports stadium, a public library, a cinema and a theatre. In addition to overseeing all these facilities, recreation manager Jay Francis leads a team generating events and activities to bring them to life – recent examples include World Health Day, Earth Day, a gift bazaar, kite-flying, go-kart racing, youth football, swimming lessons and a summer camp for kids.

Since the university opened last September, 2,000 people have moved in, but with numbers expected to reach 15,000 over time, American Leisure is signed up for the long haul. “The project has been a massive undertaking and it has tested us, frankly,” admits Johnston. “But we’re proud of the accomplishment and we recognise [as a result] that we’re certainly capable of taking on some big challenges.”

EXPLORING OPPORTUNITIES

Inspired by the success of the KAUST project, American Leisure has forged a strategic alliance with Saudi Oger, with a view to offering similar services in real estate and academic developments across the Middle East – especially in Saudi Arabia, the UAE and Lebanon. As the global economy recovers, Johnston also anticipates that American Leisure’s international consulting business, which all but disappeared during the recession, will start to come back.

Stateside, American Leisure already has several projects underway on both the east and west coasts. Although funding continues to be a big challenge, says Kass, “we are seeing some signs of life.” But while he believes both the hotel/resort and real estate sectors will recover well, he is less sanguine about standalone fitness clubs. “That’s been one of the most affected areas; we don’t see that coming back for at least another three years. Unfortunately the financial institutions don’t understand that business as well as businesses [such as the hotel sector] that have been around longer. Also, businesses that address current trends and have an easy point of entry, such as fitness clubs, are often over-built and the banks have become very sensitive to that.”

Fitness within a real estate or hospitality setting, however, remains a primary focus for American Leisure, as does the spa sector. In February, the company opened a spa at The Setai, a luxury condo development in New York’s financial district, which it’s also managing. It’s since consulted on the concept and design for a second Setai Spa in New York – at The Setai Fifth Avenue, a condo/hotel development set to open in November – and also worked on the new spa at Manhattan’s Hotel Plaza Athenee, which opened in May. “We’re moving very strongly into the spa field because it’s an area where we’ve developed a great deal of expertise,” says Kass. “We’re able to run spas profitably, which is something many [real-estate and hotel] operators find challenging.”

ONLY CONNECT

One of Johnston’s own areas of expertise, of course, remains the world of fitness. A registered yoga teacher, he is passionate about exercise and keeps abreast of what’s going on through industry contacts, events and journals, as well as the general buzz in New York City, where he lives.

In line with the American Leisure philosophy of fun and participation, he believes there’s a growing demand for activities that bring people together: yoga, group exercise and small group personal training. “You need staff who understand that part of their job is to build relationships with people, and to connect those people with other people,” he adds. “It’s all about connecting.”

This emphasis on people is also the driving force in how the company chooses suppliers. “We look at the quality of the equipment, but it’s also about the quality of the relationships,” says Johnston, who names Precor, Life Fitness and Star Trac as current partners. “We’re all about the relationships.”

When it comes to building relationships with his own staff, Johnston looks to his yoga practice for inspiration. “I’m really interested in seeing how I can take what I learn on the mat and apply it to business,” he says. “Yoga is all about alignment, and one of my personal leadership philosophies is that my job is to create alignment within my team.

“We’re always going back and checking that alignment, and making adjustments to ensure we’re all on the same page internally. [As a result] we’re decisive about where we want to go and also, frankly, where we don’t want to go.”

From a Coney Island beach to a small regional operation to a global business to a partnership with one of the most influential companies in the Middle East, one thing’s for certain: American Leisure has already come a long way.