Life Time Group Holdings Rides the Pickleball Wave to New Heights
The explosive popularity of pickleball is proving to be a major boon for Life Time Group Holdings, an upscale fitness and lifestyle company. With pickleball’s continued surge in popularity, fueled by its accessibility and social appeal, Life Time is poised to capitalize on the momentum. This has translated into strong financial results for the company, leading to increased investor optimism and a soaring stock price.
Key Takeaways
- Pickleball’s popularity continues to skyrocket, with a 53% increase in players in 2023 to reach 13.6 million.
- Life Time, the largest provider of pickleball in the US, is strategically positioned to benefit from this boom.
- The company has expanded its pickleball offerings, increasing the number of courts by 43% and sessions by 71% since the first quarter of 2023.
- Life Time plans to invest further, aiming to reach 1,000 courts by the end of 2025.
- Pickleball has already contributed up to 7% of Life Time’s membership dues, demonstrating its significant impact on the company’s revenue.
- The company’s strong financial performance and strategic pickleball focus have led to a 56% increase in its stock price this year.
The Rise of a Sport
Pickleball emerged in the early 1960s, but its popularity really took off during the COVID-19 pandemic. The sport’s ease of learning, social aspect, and ability to be enjoyed by players of all ages and skill levels resonated with people seeking outdoor activities during lockdown. This surge in popularity has continued in the post-pandemic era, with pickleball becoming one of the fastest-growing sports in the United States.
Pickleball’s Appeal
Pickleball’s popularity can be attributed to several factors:
- Accessibility: The sport is relatively easy to learn and play, requiring minimal equipment and space.
- Social aspect: Pickleball is often described as a "social sport," played in a fun and friendly atmosphere.
- Low-impact: Pickleball is a low-impact sport, suitable for people of all ages and fitness levels.
- Competitive nature: While pickleball is known for its social aspect, it also offers a competitive element, with a growing number of leagues and tournaments.
Life Time Embraces the Pickleball Wave
As the pickleball boom gained momentum, Life Time recognized the opportunity and strategically positioned itself as a leader in the burgeoning market. The company has made significant investments in pickleball, developing a comprehensive strategy to cater to the growing demand.
Expanding the Pickleball Footprint
Life Time’s commitment to pickleball is evident in its expansion strategy. The company has increased its number of pickleball courts by 43% since the first quarter of 2023, and its pickleball sessions by 71% during the same period. This expansion has transformed Life Time into the largest provider of pickleball in the United States.
Investment in Pickleball
Life Time’s dedication to pickleball goes beyond simply increasing its court availability. The company has invested heavily in all aspects of the sport, including:
- Developing a specialized ball: Life Time has designed and manufactured a pickleball ball that is specifically engineered for speed and durability.
- Hosting professional tournaments: Life Time hosts pickleball tournaments at its clubs for both the Major League Pickleball and the Professional Pickleball Association.
Financial Impact
The company’s pickleball investments are already paying off. Life Time CEO Bahram Akradi, in a CNBC interview, stated that pickleball has already contributed up to 7% of Life Time’s membership dues. This demonstrates the sport’s significant impact on the company’s revenue.
"We believe LTH, the largest provider of pickleball in the U.S., is best positioned in our leisure coverage to take advantage of the significant rise in popularity of the sport, which continues to be fastest growing in the U.S.," said Alexander Perry, a Bank of America analyst. "[M]embership demand continues to exceed desired club capacity, which we believe provides LTH with the ability to increase prices further and should help reduce membership churn."
A Promising Future
Life Time’s commitment to pickleball is not only driving growth but also positioning the company for future success. The continued rise of pickleball, combined with Life Time’s strategic investments and its strategic position as the leading provider, suggests that pickleball will remain a significant force in the company’s continued growth trajectory.
