How to price membership during rapid inflation

More than 60% of fitness studio owners are feeling the burden of a complicated economy, with 50% seeing membership turnover at 30% or more. Inflation is driving people to prioritize essentials, and unfortunately, gym memberships don’t always make the cut.

One studio manager in Maryland echoed this sentiment: “I believe inflation will play a big role in whether people will actually show up anymore. I feel like over the years people won’t be able to pay attention to their health because they will be too busy trying to survive in the real world.”

Yet, pricing models can remain surprisingly stagnant compared to other industries. Pricing is overlooked as a selling point, but put yourself in the shoes of your members: pricing is their most important consideration. More than the modernity of the facilities, more than the robustness of community, more than the diversity of modalities on offer.  

HVLP (high value, low price) gyms know this - and that’s why they’re sweeping the competition. 

High-end gyms know this, and that’s why franchises like Equinox remain competitive during economic turmoil. 

Here’s the thing about pricing. ‍

Price indicates the value of your service to clients. It’s not necessarily the case that your client’s perception of the product justifies the price; rather, the price itself signals the quality to your members.

Consider the case of a particular New Zealand luxury wine. It was insanely popular in an already dominated market, despite the high price. 

After unbelievable success, the company decided to lower the price to make it even more popular.

Purchases crashed.

No one was interested in the wine once it was cheaper. It was the price that implied the quality, not the other way around. It was the cost of the wine that determined whether it was worth buying. (Interestingly, studies show that cheap wine tastes much better if you think it’s expensive.)

Products where the price IS the selling point are called Veblen Goods. Think clothes which are priced in the hundreds, simply because of the logo stitched onto it - but their quality is exactly the same as any other store. 

Veblen Goods are named after the writer of “The Theory of The Leisure Class”, Thorstein Veblen. 

He made the case that high prices have two main functions:

1. To signal that the product is quality (ie, marketing)
2. For the buyers themselves to signal their status to others

And for a long time, gyms have followed either a low end model - cheap prices for a cheap experience - or a high end model, with outrageous prices for luxury experiences.

HVLP gyms broke this mold. Like with EoS Fitness, which packs a luxury experience into a $9.99 price tag. 

And on the high end, gyms like Equinox started creating tier lists. Luxury packages at the top end, and basic equipment access at the low end. Equinox also price memberships by access to the amount of gyms - with a single gym at the low end, and, at the top end, every gym worldwide. 

Just this week Equinox released the debut of their newest tier: health optimization. For 3k a month, members have access to health panels, nutritionists, massages, sleep coaches, and more.

Rather than stay on the parallel tracks of low cost, low amenities vs high cost, luxury amenities, modern gyms are switching up their pricing across categories.

Value-based pricing 

Both HVLP and Equinox are betting on value-based pricing. The worst response to inflation is to simply raise prices; value-based pricing, on the other hand, sets your price based on what your members are willing to pay, tied to the value they perceive. 

You want them to see your studio as a vital part of their routine – something they can’t easily replace. 

Tiered memberships

Tiered memberships are one example of value-based pricing, and  increasingly becoming popular in fitness franchises. Think of it as a “pay what you need” model. Basic members get access to core services, while premium members unlock extras like personal training or exclusive classes. This gives everyone options, whether they’re tightening their belt or looking for luxury.

For example, you could offer:

• Basic tier: Access to the gym and group classes at a competitive rate.

• Mid-tier: Add in a monthly one-on-one session with a trainer or nutrition guidance.

• Premium tier: Full access to every amenity, including VIP perks like priority booking or access to exclusive classes.

And consider those members which may only want to come for one feature. Many people only want access to the sauna; others, only the equipment; and still more may only want the group classes. 

By giving people options, you retain those who may otherwise leave, while still serving those who are happy to pay for premium experiences.

Having a low budget option (even one that loses you money) is famously effective at retaining customers in other industries. Costco sells a rotisserie chicken at a loss to get people into their stores. Similarly, IKEA’s famously cheap hotdogs keep people coming back,  even though they’re losing money on it. 

The principle is the same for fitness studios: if you offer a standout deal (like a low-cost intro membership), people are more likely to stay for the long haul and spend more on other services. Just remember to keep it balanced – a low budget option requires a high budget option to balance cash flow. Or, in the case of HVLP gyms, an appealing enough round up of amenities combined with a low enough price to ensure that: 

1. The cost-value ratio appeals to an enormous amount of people
2. The majority of those people do not show up 
3. The cost-value ratio convinces everyone to keep their memberships, even if they never go

Building in flexibility to pricing models

McKinsey suggests creating a dedicated team to monitor pricing and customer responses. Fitness franchises could establish a similar system to quickly react to market conditions, competitor moves, or customer feedback, ensuring any price changes are quickly well-communicated.

McKinsey also suggests segmenting customers by their price sensitivity and adjusting prices based on their willingness to pay. Studios can apply this by raising prices on less price-sensitive services (like personal training) while keeping core offerings (like basic gym access) more affordable. 

This is a value-based pricing strategy—ensuring price changes reflect the perceived value of the services offered, without alienating budget-conscious members.

Inflation may change month to month, so your pricing shouldn’t be static. Sans a pricing team, a classic option is to introduce flexible membership models that adapt to your members’ changing needs. This could mean offering pay-per-class or shorter-term memberships. People feel safer committing to shorter terms during uncertain economic times.

Gyms have often led with a one year contract model. However, this is very likely to scare off renewals in times of change. One way around this is to advertise an easy “freeze request” feature, à la One Playground. 

Loyalty options - tried and true

The economic environment is influencing membership affordability. Make it a no-brainer for long-term members to stay. Loyalty programs – offering discounts or extra perks for those who stick around – help members see the value in staying with you. Offer discounts on future memberships or reward them with extra perks like free guest passes or discounted personal training.

Price increases should be thoughtful and tailored. Instead of blanket price hikes, consider adjusting discounting strategies and using non-price levers (like adding value in other ways) to soften the impact on customers. For fitness studios, this could mean offering promotions on long-term memberships or bundled services, without immediately raising monthly prices across the board. 

“People do not have as much disposable income anymore. There are many more at-home fitness options available now. It is a challenge to keep some people interested in fitness after a certain period.” - Fitness studio manager, 39, Illinois

The history of pricing for gyms and fitness studios

Traditionally, gyms operated on long-term membership contracts, often requiring a commitment of one year or more. This provided steady revenue but could be a barrier for potential members wary of long-term obligations. Fitness studios were actually ahead of the trend here, using subscription models even before media and software companies shifted to subscriptions in the late 2000s. 

To attract more customers, many gyms began offering month-to-month memberships without long-term commitments. Some fitness studios introduced drop-in rates or class passes, allowing customers to pay per visit or purchase bundles of classes. Boutique studios specializing in activities like yoga, cycling, or Pilates started offering class packages at varying price points. Unlimited class subscriptions became popular.

This mirrored a trend in pricing across the board - telecommunications started offering no-contract plans, upstarts like Airbnb brought flexibility in bookings to the table. 

At this point, fitness studios began to lag behind in terms of pricing innovation. Airlines and streaming services had been using tiered memberships as standard practice for a while before gyms introduced tiered pricing, offering basic memberships for equipment access and premium tiers that include classes, personal training, or amenities like pools and saunas. 

Chains like Planet Fitness (another HVLP gym) took the cue from retail and offered low monthly fees with the aim of attracting a large membership base, banking on the assumption that not all members would use the facilities regularly. Gyms trailed behind retail on this pricing model, but were eventually able to adapt it successfully. 

More recently, platforms like ClassPass emerged, allowing users to access multiple gyms and studios under one membership, changing how individual gyms priced their offerings to remain competitive. Aggregated membership options were already common in hospitality and travel (Expedia) and food delivery (Uber Eats). 

How Hapana can help keep fitness studios competitive

Inflation challenges every business, but fitness studios can come out stronger by adjusting pricing strategies. Focus on what your members value, offer flexibility, and reward their loyalty. Inflation may be driving turnover, but with the right approach, you can keep growing and stay profitable. Think about the core of your offering – your community – and what will keep them engaged and coming back, no matter the economic climate.

Let’s make those membership prices work for everyone, including you. 

Get in touch with our team to see how Hapana’s platform can be tailored to your fitness business.