Planet Fitness’s Controversial Decision: Will It Drive Away Members?
Planet Fitness (PLNT) is set to implement its first membership price increase in 26 years, a move that may not sit well with all customers. During a recent earnings call, the company announced plans to raise the price of its cheapest membership option by $5, following a successful pilot program in various markets. CFO Tom Fitzgerald shared insights about the decision, stating, “For the past several months, we have had three different groups of stores testing three different prices for our Classic Card membership. Based on those test results, we have decided to increase the price from $10 to $15 to further enhance the average unit volumes for our stores.”
This price increase will take effect this summer, but only for new members who join after the change is implemented. Current Classic Card members will continue to pay the existing $10 monthly rate for the duration of their membership.
Additionally, Planet Fitness hinted that its Black Card membership, currently priced at $24.99 per month, may also face an increase in the near future. Interim CEO Craig Benson mentioned, “We continue to test different promotional strategies, as I believe a good portion of our focus on innovation includes exploring pricing and amenities. To that end, we’ll be starting Black Card price tests around the time the system migrates to the new Classic Card price.”
The company believes that these price hikes will have minimal impact on membership cancellations since the increase only affects new members. Benson noted that such changes in pricing should not come as a surprise. “We’ve seen in every industry, people moving price,” he stated. “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.”
Despite the price adjustments, Planet Fitness has shown strong financial performance, with total revenue rising by 11.6% year-over-year according to its first-quarter earnings report for 2024. However, the company is also grappling with $600 million in debt, which it needs to address by September 2025.
Planet Fitness is also recovering from the fallout of an incident that occurred on March 11 at one of its gyms in Alaska. A woman posted on social media about encountering a transgender woman in the women’s locker room, claiming the individual was shaving. After sharing a photo of the incident, the woman was banned from the gym. Planet Fitness stated, “Our gender identity non-discrimination policy allows members and guests to use the facilities that best align with their sincere, self-reported gender identity.” They also emphasized that the individual who posted the photo violated their policy against taking pictures in locker rooms, which led to her membership termination.
The company acknowledged that this incident has negatively affected membership joins and cancellations, with Benson noting, “Media mentions relating to the incident peaked in the middle of March, which we believe contributed to some softness in joins for the balance of the month, as well as an increase in cancellations.” He reiterated that the nondiscrimination policy has been in place for over a decade and aligns with practices at other organizations, such as the YMCA.
