National fitness chain Planet Fitness is increasing the price of its basic membership for the first time in 26 years. The new cost for a no-frills membership for new customers will be $15 per month, up from the long-standing $10 rate that had been in place since 1998. This change will take effect during the summer.
The decision comes as Planet Fitness faces several challenges
Current members who joined at the $10 rate will continue paying that amount until their membership expires, according to the company’s announcement during its first-quarter earnings call. Planet Fitness is specifically raising the price of its lowest tier or “classic” membership, which allows members to use a single gym location.
Tom Fitzgerald, the current CFO who is set to retire in August, noted during the earnings call that “it will take some time for the benefit of the price change to expand our store level margins as the price increase will only be on new classic card memberships.”
The membership price hike comes amid “several headwinds” affecting the company’s results. Executives acknowledged consumers’ focus on saving money, COVID-related concerns, as well as a failed advertising campaign.
The company plans to conduct similar price tests for the Black Card membership
For an unchanged fee of $25 per month, members with Planet Fitness’ “Black Card” membership can access multiple facilities. More than 60% of the company’s members join at the “Black Card” tier.
This 50% price increase follows thorough cost-testing in various markets. Planet Fitness CEO Craig Benson stated during the earnings call, “We use a disciplined data-driven approach to determine the best balance between the higher dues while minimizing the loss of membership. Based on our learnings, we decided to change the price of the classic card to $15.”
The company plans to conduct similar price tests for the Black Card membership in the future. Meanwhile, luxury fitness chain Equinox has recently introduced an ultra-premium program targeting fitness enthusiasts, with an annual cost starting at $40,000.