Pickleball's explosive growth isn't slowing down. But as clubs face mounting financial pressure, the difference between thriving and surviving may come down to location, community and a defensible business model.
It’s been a tough press month for pickleball. A casual reader of headlines might fairly assume the bloom is off the pickleball rose.
The reality: the sport has never been stronger and remains poised for continued growth. Another truth: not all business models make sense.
Like all industries, economic basics like supply and demand and barriers to entry can’t be ignored in pickleball.
The beauty of pickleball and the reason for its explosive growth over the past five years is its accessibility. Both lifelong athletes and previous couch potatoes flock to our sport. Few age out of pickleball, and the youth market is booming.
CityPickle’s kids’ summer camps and after school academy continue to outpace our sunny projections. According to Claude, there are approximately 300 colleges with pickleball clubs. CityPickle is currently scheduling court time with a New York City high school for their inaugural spring varsity season.
Our sport appeals to all types, all genders, and all ages. 25 million+ U.S. players later, pickleball is here to stay. Demand is strong.
Strong Demand Doesn't Guarantee a Strong Business
Let’s talk supply. Pickleball’s accessibility extends to supply.
For about $100 on Amazon, you can buy everything you need to tape down a court in your suburban cul-de-sac and have a blast.
Municipal tennis courts are converting to pickleball courts daily, and most country clubs now offer a handful of pickleball courts. Converting a suburban warehouse to indoor courts, even climate-controlled ones, is neither overly complicated nor expensive, but it is an investment.
What protects your investment when a newer facility opens a few miles away and charges 30% less?
West Shaw
The Importance of a Competitive Moat
At CityPickle, we think about moats…and Warren Buffet.
Buffet espoused businesses with “wide, sustainable moats” to maximize shareholder value. CityPickle’s competitive advantage is reflected in our name.
When my co-founder Erica Desai and I devised our business plan in 2021, we were intentional with our name and continue to only pursue opportunities in urban settings where real estate is scarce and in high demand.
Cul-de-sacs don’t exist in our target markets. Millions of busy urbanites with disposable income want to pickle, but supply is exceedingly limited. The few public parks with courts feature long waits for unleveled open play.
Yes, negotiating a lease and then building a seven-court club on the 8th floor, above a law firm, of a Class A Office tower in the middle of Times Square was not for the faint of heart.
Multiple sound engineers later, we take comfort that it is not easily replicable. Similarly, researching and winning competitive RFP processes issued by cities to establish public-private partnerships in iconic locations like Central Park, Brooklyn Bridge in DUMBO, and Boca Raton offer CityPickle moats against local competition.
Our urban locations are also ideal for private events, a key revenue driver for us. The most profitable events are corporate events. New York City boasts over 200,000 businesses with employees. Similarly, we target locations, like South Florida, with a growing list of corporate headquarters.
Why Local Management Matters More Than Ever
Can a suburban pickleball club be successful? Of course.
There are countless thriving clubs with outstanding operators from whom CityPickle can learn. These savvy managers recruit and train local talent, curate their court sheets with programming that appeals to their specific audience to drive utilization, and optimize ancillary revenue streams like food & beverage and pro shops.
These combined efforts ultimately lead to a palpable sense of community which precludes a player from driving 10 minutes longer to save $10 an hour.
Since a suburban pickleball facility is a hyper-local business whose success depends on its direct local management, it begs the question: does the pickleball club franchise model make sense?
Ben Borton
Does a National Brand Really Add Value?
A club’s largest expenses are real estate costs and labor, both driven by the local market.
There are no significant ongoing procurement needs whereby a franchisee benefits from the franchisor’s supply chain buying power; no McDonald’s ground beef deals here.
Then there is the question of brand. At CityPickle, we are obsessed with our brand. We constantly ask, “Is this on brand?”
CityPickle’s look, voice, and consistency of player experience across venues consume us. Why? Our elevated branding and the 24 billion in earned media impressions we have amassed since 2022 make other brands want to partner with us.
Sponsorships are a key revenue source for us. Interrelated, our iconic urban locations like Central Park, Hudson Yards, Philadelphia City Hall, and our soon to open Brooklyn Bridge drive brand awareness for our partners since millions of pedestrians pass our courts.
In contrast, does a suburban player, whose options are limited to a 30-minute driving radius care if there is a national brand on the front of their club?
I bet they opt for the club in their geography that is the best managed. That seems to have little correlation with the name on the door.
CityPickle has never been more bullish on the future of pickleball, an industry still quite young. As we all find our way, CityPickle is cheering on our fellow club managers, particularly at this uncertain moment for many.
As George Bernard Shaw reflected, “We don’t stop playing because we grow old; we grow old because we stop playing.” This feels particularly apt for our all-ages-sport. Let’s keep our country on the courts and playing.
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