Town Sports International Holdings Inc. (TSI), New York, will spend $5 million in advertising and marketing to promote the move of 84 percent of its health clubs to its premier membership high-value, low-price (HVLP) model, the company announced today. By comparison, TSI spent
The large promotional effort will include a four-week
At the end of 2014, TSI had 71 clubs operating under its HVLP model. As of late February when the company released its 2014 financial report, 98 clubs had been converted to HVLP and another 19 clubs were operating as passport-only membership clubs. By the end of May, the company plans to have converted 84 percent of its 158 clubs to the HVLP model.
Approximately 25 of TSI's clubs will operate under the higher-priced passport membership model. Memberships under the HVLP model begin at
The increased marketing campaign occurs as the company announced in late February a $16.4 million (3.5 percent) revenue decrease in 2014 compared to 2013. At that time, TSI also announced that its board of directors was evaluating strategic alternatives, including a possible sale of the company, and had retained
"We believe the services and amenities in our clubs represent a compelling value for our members," says
Gallagher says that the HVLP model gives TSI an advantage over other health clubs because TSI's facilities and services provide members with a better quality experience at an affordable price point than other chains offer.
"Our top of the line equipment, exciting group exercise classes, and our UXF cross training zones are all examples of some of the elements we provide that many others do not," he says.