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Insiders confirm US health club market softened in January but quickly stabilised

Placer.ai said footfall to gyms was flat in January, following two years of strong growth
Bloomberg postulated that the market could be in for a tough year as a result, however, industry insiders have told HCM that demand returned to expected levels by the end of January
Extremely bad weather across the US has been blamed for the impact
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Industry insiders have confirmed to HCM that parts of the US health and fitness sector saw a softening of demand in early 2024, but that the market quickly righted and was back on-track by the end of January.

The comments come in response to numbers published by mobile phone tracking service Placer.ai and reported by Bloomberg indicating that foot traffic to gyms was flat in January 2024, versus growth of 40 per cent in both January 2022 and January 2023.

Placer.ai tracks 10 health and fitness chains, including Equinox, Planet Fitness and Xponential Fitness.

Bloomberg postulated that any levelling off of demand could mean the US sector is facing a tough year, but these comments were not validated by industry sources who classed the softening of demand as a temporary blip caused by bad weather.

Following an unseasonably warm December, meteorological turmoil hit much of the US from 8 January onwards, bringing a rapid succession of blizzards, winter storm, floods, high winds, tornado and thunderstorms to everywhere from California to Texas, Maine to Oregon and New York to New Mexico, keeping people at home.

US media reported that this disruption scuppered plans by Planet Fitness to raise its prices, leading to a reversal of increases, however, the company told HCM that price increases are being market-tested via time-limited special offers in a sample of locations.

Interim CEO, Craig Benson, said: “Consumer expectations on price have changed in a highly inflationary world. We are exploring whether we have an opportunity to take price on our classic [membership package] without sacrificing member growth.

“To that end, we've been testing different price structures, messaging and price points in several markets around the country for more than a couple of months now. As we are a recurring revenue model, we plan to continue running these tests to understand the impact an increasing price has on membership growth.”

Planet Fitness has not yet commented on the results of these price trials.

HCM editor, Liz Terry, said: "When prices have remained the same for 30 years and been fundamental to the company's philosophy, implementing a highly-visible 50 per cent price increase at the most important time of year for new sign-ups was a high-risk strategy for Planet Fitness.

"There are more nuanced ways to restructure pricing and we expect to see Planet Fitness addressing this challenge through 2024, looking for creative solutions, such as value-added and new-style packages and micropayments."

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Industry insiders have confirmed to HCM that parts of the US health and fitness sector saw a softening of demand in early 2024, but that the market quickly righted and was back on- track by the end of January.
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