Planet Health is climbing the value of its fundamental membership plan by 50% after holding it at $10 a month for 26 years.
The brand new $15 cost will come into impact in the summertime and can solely apply to new members, interim CEO Craig Benson informed traders Thursday. Present members on $10-a-month plans will not be affected by the change, CFO Thomas Fitzgerald mentioned.
The value is for Planet Health’s Basic Card, which provides customers limitless entry to at least one fitness center.
Benson mentioned that Planet Health had began testing $12.99 and $15 worth factors within the fall. The $15 price drove the largest enhance in common revenues per fitness center “with the least affect to the speed of joins,” he mentioned.
Planet Health is not the one firm to ditch its trademark worth level as inflation pushes up how a lot companies pay for workers, items, and overheads. Greenback shops have been dropping their $1 worth level and fast-food chains have been charging prospects extra.
“Our Basic Card membership has been priced at $10 since 1998, which primarily based on inflation can be about $20 in immediately’s {dollars},” Fitzgerald mentioned. In line with the Bureau of Labor Statistics’ inflation calculator, $10 in January 1998 would have the identical shopping for energy as $19.33 in March 2024.
However it’ll take some time for the advantages of the value change to trickle by way of and increase fitness center margins as a result of it solely applies to new members, Fitzgerald mentioned.
He additionally famous that almost all of Planet Health’s members — about 62% — had its Black Card membership, which is costlier and permits them to carry a visitor, use any of its gyms, and entry another services like tanning and therapeutic massage chairs.
Across the time that the brand new Basic Card worth is launched, Planet Health will begin testing new costs for the Black Card, Benson mentioned. The final time its worth was elevated was in Might 2022, Fitzgerald mentioned.
As a part of the Basic Card worth change, Planet Health plans to focus extra closely on its “worth for all times” coverage, Benson mentioned.
“We must get the good thing about a subscription-based enterprise that does not change pricing on individuals in the course of their utilization of these providers,” he mentioned.
Former CEO Chris Rondeau was abruptly fired in September.
Planet Health mentioned that on the finish of March it had about 19.6 million members and greater than 2,500 gyms worldwide. It reported an 11.6% enhance in first-quarter complete income to $248 million and a 6.2% enhance in system-wide same-store gross sales.
However outcomes had been hit by plenty of headwinds, together with shoppers specializing in saving cash, issues about COVID-19 infections and different sicknesses, and an promoting marketing campaign that Benson mentioned “could not have resonated as broadly as we had anticipated.”
