Cryotherapy as a Profit Center: Deep Dive into ROI

CryoBuilt answers the question, “Do we really need cryotherapy at the gym?” Additionally, learn why it’s a good profit center, how much operations costs and more.

Cryotherapy is becoming a must-have at every gym, and members are actively seeking it out as the leading form of recovery. If you don’t have cryotherapy, you may miss out on new members or lose existing members. Moreover, you may leave money on the table, as members are willing to pay for these services. 

How Profitable is Cryotherapy?

Aside from the opportunity costs of gaining or retaining members by having services such as cryotherapy, there are real revenue dollars and costs that need to be considered. It’s important to note not all cryotherapy is created equal and members will be willing to pay more or less for specific types of cryotherapy. For the purpose of this article, we will look at electric cryotherapy systems, which are by far the most in demand by members. Electric cryotherapy chambers are more expensive but have much lower operating costs, can be ran without dedicated staff supervision, and demand a higher price of admission, enjoyment and effectiveness. 

The Costs

• Electric Cryotherapy System: $125,000, including delivery, installation, training and warranty. 
• Average Daily Expense: $5 to $10 per day in electricity.
• Staffing Required: $0 — no dedicated staff is needed, but let’s assign $250 per day for the sake of argument. 
• Gas Used: $0 — no nitrogen or depletable gas is used. 
• Total Costs: $5 to $10 per day, or ~$2500 per year. 
• 5 Year Amortization: $27,500 per year. 

The Revenue

• Average Sessions Per Day: 30.
• Max Sessions Per Day: 120-plus, depending on hours open.
• Average Sessions Per Month: 1,200.
• Session Time: 3 minutes — assume five to 10 minutes to allow for clothing change. 
• Average Dollars Per Session: $30.
• Average Membership Add-On: $99 per month.
• A La Carte Versus Membership: 50/50.  
• A La Carte Session Revenue: ~$10,000 per month. 
• Membership Revenue: ~$10,000 per month — assumes 100 members. 
• Total Revenue: $20,000 per month, or $240,000 per year.

The ROI

• Investment: $125,000.
• Annual Costs: $2,500 plus $25,000 amortized investment equals $27,500 per year.
• Annual Revenue: $240,000.
• Return On Investment: 88.24% or ~8 months.
• Please note, results may vary. This is for example purposes only and actual results will come down to an individual club’s ability to market services and garner interest.

How Much Space is Needed?

A fully outfitted recovery area can fit into relatively small areas. It’s very easy to repurpose an existing room or corner to create a unique and highly desirable recovery space in as little as 100 to 250 square feet. The space requirements depend on how many services and quantities of each you want to add, but typically, all you need is one cryotherapy chamber, a handful of leg compression boots and one to five percussion massage devices. A great upgrade is adding lounge or massage chairs that can function as dual usage with compression boots or percussion massagers before or after members use the cryotherapy chamber.