Planet Fitness, a prominent national gym chain, announced a significant price adjustment to its basic membership during its first quarter earnings call on Thursday. For the first time since 1998, the cost of its “classic” membership for new customers will rise from $10 to $15 per month starting this summer. This adjustment marks a 50% increase in the monthly fee for access to a single gym location. However, existing members will continue to pay the original $10 rate until their current membership expires.
Tom Fitzgerald, the CFO of Planet Fitness who is set to retire in August, highlighted on the earnings call that the impact of this price increase on store-level margins would be gradual. The increase applies solely to new classic card memberships, and Fitzgerald indicated a careful approach to implementing this change.
The decision to raise prices arrives amidst various challenges for the company, including economic pressures influencing consumer spending, ongoing COVID-19 concerns, and a recently unsuccessful advertising campaign. Despite these hurdles, the price for the “Black Card” membership, which allows access to multiple gym locations, remains unchanged at $25 a month. Over 60% of the chain’s clientele opt for this premium tier.
CEO Craig Benson explained that the new pricing strategy was based on extensive market testing and a data-driven evaluation designed to find a balance between higher fees and maintaining membership levels. “Based on our learnings, we decided to change the price of the classic card to $15,” Benson stated.
Further, Planet Fitness is planning to conduct price testing for the Black Card membership to potentially adjust those rates as well.
In contrast to Planet Fitness’s pricing strategy, the luxury gym chain Equinox has launched an ultra-premium fitness program this week with an annual membership fee of $40,000, catering to the most affluent and fitness-focused members.