Bannatyne Group chair Duncan Bannatyne has sparked a lively debate among industry leaders over the issue of membership discounts.

In his recent book, Riding the Storm, the entrepreneur - famous for his role on hit TV show Dragons’ Den - claimed discounting at some of his clubs had attracted “problem members.”

Bannatyne said dropping monthly fees from £42 to £29 had devalued the brand and changed the atmosphere at the clubs.

“More and more, people are trying it on, trying to sneak in a friend without paying, or making complaints in the hope of getting money back,” he said.

The headline-grabbing comments have drawn a wide range of views from industry leaders, which are featured in the January edition of Health Club Management magazine.

Tim Baker, from market research company Touchstone Partners, disagrees with the 64-year-old Scotsman, saying he had never heard of discounting attracting the ‘wrong sort of member.’ To the contrary, he suggested members paying higher prices are more likely to complain.

He added: “If gyms are finding they have to discount in order to attract members, it’s probably because they’re not offering the right product for the catchment.

“The maturation of the market into no frills low-cost gyms versus full-service premium clubs means there’s now less need to discount.”

Bannatyne himself accepted that dropping prices had led to thousands of extra members, but voiced concern that the discount is devaluing the brand.

His view was backed by Dr Paul Bedford, research director at Retention Guru, who said dropping membership prices had “destroyed the business” of one of his clients. The influx of new members led to drug dealing, violence towards staff and a lack of respect for the facilities, he said, adding that in the cases where discounts are successful, gyms must ensure existing customers are also rewarded.

For Neil Harmsworth, co-founder of payasUgym, health clubs need to focus on setting more realistic price points to begin with, as well as making costs more transparent on their websites.

“People no longer want to negotiate membership on an old fashioned gym tour,” he said. “Our research highlights an 80 per cent decline in walk-in custom in the last 18 months, while online searches for gym membership increased by 70 per cent.”

Is Duncan the Dragon blowing smoke or are bargain-hunters bringing down gyms? Join the debate and have your say on our blog.