Originally Posted by
james318
I don't understand how outsourcing led to higher labor costs, that part doesn't really sit well with me.
Here's the version I heard...when DL outsourced the labor to run the SCs, the contract, supposedly, detailed how many people would be employed per location based upon number of daily patrons. That contract then also allows for a certain increase in employee numbers and raises of the salary/hourly wage of the employees over the life of the contract based upon the number of SC admissions. As clubs have become more crowded (and they seem more crowded to me today than a year ago even), the outsourced labor provider has cranked up their employee numbers and given raises in line with the contract which is actually making the SC more expensive to run then when DL was managing them directly. So, my interpretation is that all of these AmEx day passes may actually be bad for the cost of running the clubs, not just for overcrowding!