For the first time in more than two decades, Planet Fitness is raising the cost of its basic membership.
Planet Fitness' basic gym membership will increase from $10 per month to $15 per month starting this summer, the company said during a call with investors on Thursday. The price increase will only apply to new members, and existing members will continue paying $10 a month, the company said.
Company CFO Tom Fitzgerald said Planet Fitness has been testing different promotions for customers and said its approach is the best way to balance adding revenue against losing customers.
"The price increase will go into effect this summer, only new members who joined after it goes into effect will pay $15 for a monthly membership fee," Fitzgerald said. "Current Classic Card members will continue to pay $10 for the duration of their membership. 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. Additionally, more than 60% of our members join as Black Card members."
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Planet Fitness said that compared to its last price increase in 1998, the $15 price point is still a value when adjusted for inflation. According to the consumer price index, $10 in 1998 equals over $19 in 2024 dollars.
"We've seen in every industry people moving price," said interim CEO Craig Benson. "So 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. And so we, again, tested it pretty rigorously in multiple markets with good control groups and again saw positive results. We think that this is the right time to do it."
Benson added that it is looking at adjusting the price of its Black Card membership.
The company said it added nearly 1 million new memberships in the first quarter of 2024. The company acknowledged how news about its policy allowing transgender people to use the locker room of their self-reported gender identity affected memberships.
"Once social media sort of blew up over our policy issue, we definitely saw a change in the results in the back half of March. Joins and cancels were fairly significantly affected," Fitzgerald said, adding that joins have rebounded, but membership cancellations remain "elevated."
