Planet Fitness to raise new basic membership fee 50% this summer
New members of Planet Fitness will have a heavier lift this summer – the fitness chain is raising its basic membership price for the first time since 1998.One of the nation's largest gym chains, Planet Fitness will raise the price of its Classic Card membership from $10 monthly to $15 this summer, the New Hampshire-headquartered company says.
Planet Fitness will also do price testing for its Black Card, currently priced at $24.99 monthly. Black Card members can bring a guest, use any Planet Fitness location and get other perks.
"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," interim CEO Craig Benson said Thursday during a call with analysts about the company's financial results in the first quarter of 2024 (Jan.-March).
"We think it is the right time to do it," he said. "We also think it's the right time to look at different options on the Black Card, which may or may not change."
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How much is the monthly membership price going up at Planet Fitness?
Current members paying $10 per month will not see a price change "for the duration of their membership," chief financial officer Thomas Fitzgerald said.
But new members will eventually pay a $15 monthly membership fee.
When does the new membership price at Planet Fitness go into effect?
The price change for the classic monthly membership goes into effect this summer, Fitzgerald said. The company executives did not state a specific date for its adoption. But after the price change goes into effect this summer newcomers will pay a $15 monthly membership fee.
How long has the $10-a-month rate been in effect at Planet Fitness?
The gym chain's classic card membership has been priced $10 since 1998, six years after the company was founded in Dover, New Hampshire.
Is the Black Club membership also being raised?
Planet Fitness will do tests on increased prices for the Black Card membership at about the same time this summer when the classic card membership price increases from $10 to $15 for new members.
The company expects to offer "a few different iterations" of Black Card membership, Benson said, perhaps swapping in and out of perks at different price levels.
Why does Planet Fitness need to raise prices?
As with most corporate decisions, the bottom line is the reason for a price increase. For starters, it's costing Planet Fitness more to provide the facilities for its members than in the past. Based on inflation, the $10 monthly membership would be about $20 today, Fitzgerald said.
Planet Fitness added 900,000 members in the first three months of 2024, below what investors expected – typically, New Year's resolutions lead to new members. A rise in respiratory diseases including RSV and COVID during January may have hindered new members, Benson said.
The company's January advertising campaign was also not as successful as hoped. "The lack of a price point in our national funded January sale ads may have created less urgency for consumers to get off the couch and join," Benson said. He will step down as interim CEO next month when new CEO Colleen Keating, a hospitality and property management executive, joins the company.
Also affecting the chain: Attention from media and social networks after Planet Fitness terminated the membership of an Alaska woman who posted a complaint online about “a man shaving in a women’s bathroom," as reported by The Washington Post.
Benson said the company's nondiscrimination policy – it allows members to use the fitness center's facilities they choose based on their self-reported gender identity – has been in place for more than a decade and is similar to other fitness centers including the YMCA.
Planet Fitness – with 2,599 stores in the U.S., Puerto Rico, Canada, Panama, Mexico and Australia – reported first-quarter revenue of $248 million, about what analysts expected. But the company lowered its full-year revenue to a 4%-6% increase, down from 6%-7%.
Shares of Planet Fitness are up more than 9% for the week, after being down about 11% so far this year.
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