Planet Fitness Hikes Classic Membership Price to $15 Amid Struggles

Planet Fitness is increasing its classic membership price from $10 to $15 for new members starting this summer, the first price hike in over 20 years. Current classic members will continue to pay $10 per month, as the company aims to adapt to changing consumer behavior and economic conditions.

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Aqsa Younas Rana
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Planet Fitness Hikes Classic Membership Price to $15 Amid Struggles

Planet Fitness Hikes Classic Membership Price to $15 Amid Struggles

Planet Fitness, the largest gym chain in the United States, is increasing the price of its classic membership from $10 a month to $15 for new members starting this summer. This marks the first price hike in over two decades for the company's most basic membership tier. Current classic members will continue to pay $10 per month.

The decision comes as Planet Fitness has struggled to gain new members in recent months. In its Q1 2024 earnings report, the company acknowledged that the increase of approximately 900,000 net new members fell below expectations. Interim CEO Craig Benson cited ineffective advertising and rising cases of COVID-19 and RSV as contributing factors.

Why this matters: The price hike reflects the challenges faced by businesses in the fitness industry to adapt to changing consumer behavior and economic conditions. As companies respond to inflationary pressures, this move may have broader implications for the pricing strategies of other service-based industries.

"The increase of approximately 900,000 net new members in the first quarter was below our expectations for what has historically been our highest net growth quarter pre-pandemic,"Benson said. "We believe that this was due in part to the messaging not resonating as broadly as we anticipated, as well as our strategic decision to not include price-pointed offers as part of our nationally funded portion of the advertising."

Prior to settling on the $15 price point, Planet Fitness tested two different price options in several markets: $15 and $12.99. CFO Thomas Fitzgerald said the company determined that the $15 price drove the most significant increase to average unit volumes. He noted that the classic $10 membership, which has been in place since 1998, would be equivalent to around $20 today when accounting for inflation.

"It is not going to come as a shock to anybody that we are moving a price that's been in effect for a long, long time... 25 years," Benson said. "We think it is the right time to do it. We also think it's the right time to look at different options on the Black Card, which may or may not change." The Black Card membership, which offers additional perks and access to all Planet Fitness locations, is currently priced at $24.99 per month. Over 60% of Planet Fitness members join as Black Card members.

Planet Fitness reported first-quarter revenue of $248 million, meeting analyst expectations. However, the company lowered its full-year revenue growth outlook to a range of 4% to 6%, down from the previous projection of 6.7%. The price increase announcement comes as businesses across various industries have raised prices in response to inflationary pressures.

Planet Fitness, known for its "Judgement Free Zone" slogan and affordable memberships, has long used the $10 basic membership as a key selling point to attract new members. Roughly 40% of the gym's new members have never belonged to a gym before joining Planet Fitness. Despite the price hike, Planet Fitness executives believe that consumers have grown accustomed to price increases and that the move will not have a significant negative impact on membership growth.