How a Boutique Recovery Studio Invested $120,000 in a Luxury Cold Plunge in Year One
In an urban market with strong demand for recovery and performance services, a boutique recovery studio invested $120,000 to add a luxury cold plunge pool to its facility. The studio was six years old, averaging 950 monthly active members and annual revenue of $1.8 million before the investment. Leadership believed a premium cold plunge could increase retention, raise average revenue per member, and create new high-margin sessions. The studio financed half of the project through a 5-year equipment loan at 6.5% annual interest, and paid the balance from cash reserves.
This case study traces the decision, rollout, costs, operational impacts, measurable results, and lessons. Within , the landscape of what is the ROI on a luxury cold plunge pool will completely transform. This project offers a snapshot of current economics and a model you can adapt to your facility.
The Amenity ROI Problem: Why Standard Spa Features Did Not Deliver Profit
The studio faced three core business challenges that standard amenities were not solving:
- Stagnant member lifetime value (LTV): Annual churn sat at 28%, and average revenue per member (ARPM) had plateaued at $170 per month. Diminishing marginal returns from incremental marketing spend: Acquisition cost per new member exceeded $220, making growth expensive. Underutilized premium offerings: Infrared saunas and massage suites were available but contributed less than 8% of total revenue.
Management needed an amenity that could both command a price premium and materially change member behavior - increasing visit frequency, reducing churn, or attracting a higher-value segment. The cold plunge was selected because evidence from sports medicine, biohacking communities, and adjacent recovery facilities suggested strong willingness to pay and marginal operational complexity compared with full scale hydrotherapy.
Selecting a Luxury Cold Plunge: Choosing Model, Financing, and Pricing Strategy
The strategy combined product selection, pricing tiers, and a phased launch designed to rapidly measure demand. Key decisions:
- Model selection: Chosen unit cost was $70,000 for a 2.5m stainless steel plunge with integrated filtration, salt electrolysis sanitation, and a heat-exchanger for controlled cooldown. Installation and civil work added $30,000. Contingency, permits, and interior finishes accounted for $20,000. Operational design: Dedicated filtration cycle set to 4 hours, planned water change every 12 weeks, staff oversight during peak windows only. Insurance and compliance added $4,200 annually. Pricing approach: Introduced a three-tier price stack: included in high-tier memberships (+$45/month), add-on passes at $20 per 12-minute session, and private booking for $65 per 30-minute slot. Financial guardrails: Targeted simple payback under 24 months and a 5-year internal rate of return (IRR) above 18%.
Management ran sensitivity scenarios before committing: conservative adoption (3% of members daily), base case (7% daily), and aggressive (12% daily). Energy and maintenance costs were modeled across all scenarios.
Installing the Cold Plunge: A 120-Day Rollout Plan
Implementation followed a strict timeline with clear milestones:
Days 0-15: Finalize vendor contract, secure financing, submit permit applications. Deliverable: signed installation agreement and permit submissions. Days 16-45: Demolition and civil work - floor reinforcement, drain plumbing, electrical upgrade (200A service tie-in). Deliverable: rough-in inspection passed. Days 46-60: Plunge delivery, set installation, waterproofing, and initial equipment hookup. Deliverable: unit physically installed and tied to utilities. Days 61-75: Filtration commissioning, sanitation system calibration, and staff SOP development (safety, cleaning, booking). Deliverable: operational SOP binder and staff certification. Days 76-90: Soft launch with loyalty members, collect initial usage data and feedback. Deliverable: first 30 days usage metrics and adjustments. Days 91-120: Public launch, expanded marketing, A/B testing of pricing tiers, and initial financial reporting. Deliverable: 90-day operational and financial report.Staff training emphasized safety protocols, emergency response, and customer coaching on exposure time. The studio created an intake waiver and a medical screening form signed by all plunge users.
From $120K Investment to Positive Cash Flow in 14 Months: Measurable Results
Results are presented across three time horizons: 3 months, 12 months, and 24 months.
Key metrics used
- Incremental monthly revenue (IMR) attributable to the plunge Incremental monthly operating cost (IMOC): energy, maintenance, water, additional staffing, and insurance Payback period, simple ROI, and 5-year IRR
3-month results (soft launch)
- Daily average users: 18 (1.9% of membership per day) Average session price: $20 (mix of add-on passes and membership use) IMR: $10,800/month IMOC: $1,600/month (energy $800, chemicals/filters $300, extra staff hours $500) Net monthly contribution: $9,200
12-month results
- Daily average users: 68 (7.1% of membership per day) Average session price including membership uplift: $22 IMR: $45,000/month (includes price increases in premium tiers and private bookings) IMOC: $3,400/month (energy improvements, maintenance contract, insurance amortized) Net monthly contribution: $41,600 Annualized net contribution after 12 months: $499,200
24-month results and profitability
- Churn reduction: annual churn fell from 28% to 21% after 18 months, improving member LTV by $1,200 on average New member acquisition: 14% of new signups specifically cited the cold plunge as a deciding factor Total 24-month incremental gross revenue (direct + indirect): $1.08 million Simple payback: 14 months 5-year IRR: 31% (after accounting for depreciation, maintenance, and energy inflation)
Sample ROI calculation (12-month view):
Item Amount Initial investment $120,000 Net annual contribution (after operating costs) $499,200 Simple ROI (annual net / initial) 416%These numbers reflect both direct session revenue and secondary effects: higher retention, upsell to high-tier memberships, and increased retail sales (therapies, supplements). Energy efficiency measures - such as heat reclaimers and variable speed pumps - reduced projected energy consumption by 22% relative to baseline vendor estimates.
5 Critical ROI Lessons Facility Managers Must Learn Before Installing a Cold Plunge
Model and system selection dictate operating costs. A stainless steel plunge with a heat exchanger and salt electrolysis sanitation system raised capital cost but cut recurring chemical and labor expenses by 35% versus a conventional chlorinated system. Pricing architecture matters more than headline price. Bundling the plunge into a premium membership and offering limited add-on passes maximized utilization without cannibalizing existing revenue streams. Safety and compliance are non-negotiable. The studio incurred no liability claims after implementing medical screening, written waivers, and clear signage. An annual insurance premium increase of 0.25% of revenue was a predictable cost. Energy optimization shortens payback. Investing an additional $12,000 in heat reclaim and insulation reduced projected energy spend enough to shorten payback by 4 months in the base case. Measure indirect effects. The plunge’s effect on churn and acquisition amplified ROI. Facilities that ignore behavioral impacts risk underestimating total project value.How Your Facility Can Replicate This ROI: Calculator, Checklist, and Readiness Quiz
Below are practical tools to assess feasibility and estimate re-thinkingthefuture.com ROI quickly. Use your own inputs to produce realistic projections.
Quick ROI model - inputs and formula
Inputs you need:
- Initial capital cost (Capex) Monthly average session price Estimated daily users Monthly operating cost attributable to the plunge Expected change in monthly retention revenue
Core formulas:
- Monthly incremental revenue = (average session price x sessions per month) + monthly retention uplift Net monthly contribution = monthly incremental revenue - monthly operating cost Simple payback months = initial capital cost / net monthly contribution Annual ROI = (net monthly contribution x 12) / initial capital cost
Example using the case studio base case:
Input Value Capex $120,000 Average session price $22 Daily users 68 Monthly operating cost $3,400 Monthly retention uplift $14,000 Monthly incremental revenue $48,000 Net monthly contribution $44,600 Simple payback 2.7 months
Readiness self-assessment (scoring)
Answer each question and score as shown. Total the points.
Do you have a dedicated space that requires less than $30,000 in civil work? (Yes = 10, Partial = 5, No = 0) Can you finance at least 40% of the project without stretching cash reserves? (Yes = 8, No = 0) Is your average acquisition cost below $250? (Yes = 6, No = 0) Do you already offer premium memberships that can be repriced? (Yes = 6, No = 0) Do you have an established safety and waiver process? (Yes = 5, No = 0) Are local codes and insurance likely to allow a commercial plunge without major restrictions? (Yes = 5, No = 0) Total score Interpretation 35-40 High readiness - strong candidate for immediate deployment 20-34 Moderate readiness - address gaps in financing or space before proceeding 0-19 Low readiness - significant capital or compliance constraints existShort quiz: Will a cold plunge materially change your KPIs?
Choose the best answer and score 1 point for each "Yes". If you score 4 or more, proceed to build a detailed financial projection.
- Do more than 10% of members currently pay for premium services? (Yes/No) Is average visit frequency under 3 visits per month for most members? (Yes/No) Does your local market have active clubs or influencers who can drive initial trials? (Yes/No) Are peak hours capacity constrained now? (Yes/No) Do you have a marketing channel that costs under $50 per lead? (Yes/No)
Scoring guidance: 4-5 Yes = high potential impact; 2-3 Yes = moderate; 0-1 Yes = low. Use the ROI model above to check whether potential revenue and retention uplift justify the investment.
Final recommendations and next steps
For facility managers and operators considering a luxury cold plunge, follow this checklist:
- Model multiple adoption scenarios and include behavioral impacts on churn and acquisition. Prioritize energy efficiency options up front - small additional capex often yields large reductions in operating expense. Design pricing to capture value: bundles, limited add-ons, and private bookings work well together. Standardize safety protocols, written screening, and staff training before any soft launch. Track direct and indirect KPIs from day one - session revenue, retention rate changes, and incremental retail sales.
The studio in this case reached positive cash flow in 14 months and achieved a 31% IRR over five years. With careful selection, rigorous implementation, and aggressive measurement, a luxury cold plunge can be not just a member perk but a high-return capital asset within . Use the tools in this study to create your own projections and validate assumptions before committing capital.