Operator: Thank you. Our next question comes from the line of Robby Ohmes from Bank of America. Please go ahead.
Robby Ohmes : Hey, Bahram. Hey, Bob. Two questions. Just the center memberships fell less than we were expecting in the fourth quarter. Is that the departure rates just being a lot less as Bob said, and based on that, like was it — can you kind of talk about the initiatives and if that played a role in that? Was it pickleball versus personal group training in ARORA? And maybe more color we would want to know, like can you give us any examples like clubs that don’t have pickleball versus clubs that do? Is there a significant difference in performance of memberships and departures and things like that?
Bahram Akradi : Yeah. It’s not just pickleball, though. So I think to be clear, we — all the programs I mentioned, area, small group training, personal training is having an amazing come back and recovery for us under new programming DPT, and that obviously generates more customers the sort of revenue margins are up and the number of people doing personal training has increased. Small group training is more than tripled since the beginning of last year. So basically, it’s simple. Our business in our company, in our particular business, on average, about 10 swipes generates on memberships. So we focused on what we called SSR, which is basically creating swipes doing people reasons to have to be in our large athletic facilities, and then that swipe would generate subscription and the subscription generates the revenue.
So that was the full strategy last year. And that’s what we’re continuing to execute. We expect to grow ARORA, our active aging program significantly this year. We expect to — it grew massively in the first quarter. So far, we are growing small group training significantly. We have, again steady growth in pickleball. We’re continuing to convert opportunities to pickleball and running the programs. So and VPC as I mentioned, is working. So all the programs are working. And then we usually gain membership, substantial membership in the first quarter there, seasonally, and we’re doing better than our own expectation this quarter. It’s going fantastic. And so we’re very, very optimistic about the year as we’re seeing the programs that we have initiated, they really are catching momentum and getting into that leap stage that I really like to see with the programs.
Robby Ohmes : That’s helpful. And just a follow-up. The in-center revenue growth? What is the sort of expectation on in-center growth in the guidance for 2023? And is there — do you guys disclose sort of the frequency driver to in-center revenue growth versus spend per visit?
Bahram Akradi : Yeah. So let’s go through this. The in-center is broken into a number of things. The personal training, which is the biggest factor. And we reinvented our approach to training and wiring from the corporate office on the clubs up and down, back and forth. And it’s just — it’s really working. It’s working significantly better than it ever has and I expect that to continue to grow. The second one is kids and aquatics. Our programming is very strong right now. We are getting more sign-ups for like summer camps, selling them much earlier. So we have full capability of seeing where we have the opportunity to expand the capacity because we’re going to get sold out in many clubs on that to the capacity we have. So we’re just sort of laying that out.
The Cafe, we’re making improvements and that on aggregate, we’re way ahead of the past revenue for our cafe business in the same store, I think we’re close, but we’re making progress on that, and I expect that to get past — so all of our in centers are growing. In the past, it used to be one third in-center, two thirds revenue, once we got into the pandemic period, that number shrank some and it was more like 70% dues. But now we gradually as we go back and we kind of readjust the programing that we need. I expect that number to come back up as well. So — and we’re seeing it that is happening.
Robby Ohmes : That sounds great. Thanks so much.
Bahram Akradi : Yeah.
Operator: Thank you. Our next question comes from the line of John Baumgartner from Mizu Securities. Please go ahead.
John Baumgartner : Good morning, thanks for the question. I guess first off, I want to come back to pricing. And I think conceptually, Bahram, you’ve been clear about the lack of resistance to price increases on the part of your members thus far. But from your perspective, for the memberships that have seen pricing already increased, how consistent are these new prices with your objective relative to what you perceive the lifetime experience to be worth? I’m sort of more curious about how you think about price versus value from an operator’s perspective.
Bahram Akradi : Yeah. So the reality is that I have repeatedly admitted my mistake when we started the business, is that building these massive big athletic clubs and just pricing them extremely low. And that really was a challenge. We saw the problems with that was, a, we couldn’t run the clubs with a level of excellence that I want to support season Ritz-Carlton level of quality, a real athletic country club quality. We just couldn’t do it. There was too many people beating down on the club, number one. And number two, we just were stuck there because of the system we have with the salespeople in the company, they just could not — they could not react to price changes. And it was just really, really clunky. So the most critical piece we did was eliminate the middleman, the sales person in here and go to a system where the customer just goes online looks at the product or goes to the club look of the product, we have member concierge, both in the corporate office that they do this via chat room, calls, et cetera, or in the clubs that they can show people what the facilities and people would just choose to buy or not buy.
Nobody will call you back and harass you to buy a membership. I mean, is this really a different approach than I took the first 30-some years that was in this business. And we really love what’s happening because there’s no fear that you’re making a mistake on the price. Let’s say, we took a club from 179 to 199 and then the management says, that’s not enough, we want to take it to 229. This has just happened. We take the price of 229 assume it didn’t work. If it doesn’t work, it takes us 24 hours to change that price on the computer back to 219 or $209. We — it’s just — it’s not one that anybody should get some sort of a fear, god, this is not a big mistake. It’s just basically you test and you run works, you keep it, it doesn’t. So we have had zero friction with this.
What’s happening, though, is we have clubs that they were saturated. And I’ll give you like one example, South Austin. That club was saturated with membership pre-pandemic at dose levels were just maybe $1 million a month or something. And now is $1 million, $3 million, $4 million. So it’s just — it really has took the lid off of the potential of our facilities. I mean these clubs are not — as I’ve mentioned, they’re not easy to replicate. They are $60 million, $70 million, $80 million today, cost of new construction, $60 million, $70 million, $80 million facilities, you can’t replicate these but you also don’t have to give them away. So we just have a system now that naturally and intuitively helps us find that right equilibrium for the price should be for the club.
