Is now the right time for price increases?

The significant rise in utility bills faced by operators means the cost of running facilities is at crisis point, particularly where swimming pools are in place. Investigations by ukactive estimates that costs could rise by as much as 100-150%, an additional £500m – £750m annually, impacting not only the survival of facilities but also the potential for “Levelling Up” ambitions.

So, is this a time operators need to increase prices to cover increasing operational costs? This approach has been taken by many other sectors, product and service providers but what would this mean for an industry where retention has always been its greatest challenge?

Sales have appeared to remain strong through recent months however, with the cost-of-living crisis putting increasing stress on our communities, people are reviewing where they can cut costs and reduce outgoings. Another increase in utilities in October may prompt action.

With leisure being a discretionary service, this immediately means a risk to our membership and revenue growth after a 2 year period of reduced openings due to COVID.  A way to counteract this impact and increase revenue is to increase prices, but what are the risks and benefits?

There are two key factors to consider when deliberating pricing strategies.

  1. Current Pricing

    There is generally a tipping point for pricing and a ceiling that customers will tolerate. This will depend on your location and target audience.

    We recommend you conduct a thorough competitor analysis to see how your current pricing compares to other facilities in your area and compare the offering. According to a recent study The Expectations and Demands of Leisure Centre Customers – Legend by Xplor’, 28% of members put Competitive Pricing in their top 2 priorities when choosing a membership. It is important that you remain competitive relative to your offering.

    It is also important to understand your average membership yield, pricing may be at an appropriate level or near the tipping point, but is this what you actually receive from the majority of members? If discounts, offers and concessions have significantly impacted on-going revenue and reduced the average yield, consider ways to reduce this.

    Review casual payments versus memberships. It may be possible for a price rise in pay-as-you-go visits to be a better option, this could also drive people towards the better value of recurring memberships instead.

    The recent Price Sensitivity Survey conducted by Leisure-Net showed that 55-65% of members would tolerate a price increase of between 5 and 20%. This varied between public (58.5%) and private (68%) sectors and across regions and age groups but, after analysing how your price and service compares in your area, a small price rise could be accepted by much of your membership base.

  2. Understand Your Market and Your Offering

    Knowing your audience will ensure you position the pricing correctly. Potentially surprisingly, the Price Sensitivity Report suggests that younger people are more accepting of price rises than older people, however historically older members tend to show more loyalty and less tendency to move from membership to membership.

    Price is different to value so assess who your audiences are, how engaged they are with your services and how high the risk of cancellation might be. Your average visit frequency, or ideally the number of members attending twice or more per week, will help determine the risk of cancellation. Those attending less than 5 times per month are most likely to be pushed into a decision to cancel by a price rise. Those attending regularly and/or accessing multiple services are most likely to see value and remain.

    For a leisure provider offering a wide range of services such as swimming, gym, group exercise, children’s activities, cafes and health services, the value of membership may be higher than a gym-only facility where members may be able to look for alternative facilities elsewhere. You therefore can withstand a slightly higher membership price against competition with less options. However, members of private facilities report to be more tolerant of price increases than in the public sector while often having lower running costs so the right balance is important for your message.

    If your mission is to address health inequalities and provide opportunities to increase activity within your local communities, there is a commitment to ensure exercise is accessible for all so this must also be factored into the price decision.

    A small price rise, or a no price rise promise for six months, with positive communications and campaigns around supporting them through the tough winter period will provide confidence and potentially reduce cancellation risk.


1. Understand your Current Position.

Review who your members are, how engaged or at risk they are and factor in your position and brand – what is the expectation for providing accessible opportunities to be active? Compare your pricing structure to competitors in the area to understand where prices could be increased while remaining competitive relevant to your offering. An option to retain a current price for existing members and an increase for new joiners may provide a positive message to your current membership base while generating increased revenue from new sales.

2. Consider Alternative Revenue Streams.

Is there an opportunity to increase casual payments, secondary spend or offer flexible memberships such as gym only, off-peak or single site access.

The study from Legend also found that 77% of members felt operators should provide more flexible membership options. This allows them to choose what is relevant and affordable for them.

3. Identify your Loyal Members

Whether tracking promoters through NPS, monitoring customer feedback or identifying your longest standing or highest attending members you can maximise your referral opportunities.

We estimate that word-of-mouth marketing is directly responsible for up to 20% of new membership sales each month and influences another 30% of buying decisions.  Over 90% of consumers trust peer-to-peer recommendations than any other form of advertising (Nielson Advertising Report).

Ensure there is a relevant and manageable incentive as well as clear process to ensure the referred new member stays for a minimal period.

4. Communicate Positively

If a price rise is considered the appropriate action, or if you decide to honour existing prices for members, effective communication is essential.

Keep customers informed early, be clear and honest and outline the reasons for the decision as well as the positive values of remaining active and maintaining physical and mental wellbeing during a difficult period.

Highlight the overall value of your membership and facilities, the full service and support on offer and use existing customer testimonials in your campaigns to showcase the impact activity has had on your customers.

If you need any support in your competitor analysis, pricing review or marketing and communications campaigns, please reach out to the team. We are here to support you.

Click here to download the Price Sensitivity Report from Leisure-Net

Get in Touch