US spa visits, employment and industry confidence are at an all-time high according ISPA’s 2015 US Spa Industry Study. Research author Colin McIlheney outlines the findings
By Colin McIlheney | Published in Spa Business 2015 issue 4
The number of self-employed therapists has been in decline since 2010 / Monkey Business Images/SHUTTERSTOCK
Last year the International Spa Association (ISPA) reported that the US spa industry was back on track after the recession (see SBH15, p96). And now its 16th annual US Spa Industry Study shows that in 2014 the sector continued to perform strongly across key areas including overall revenue, spa visits, spa locations and employment. This is almost a mirror image of topline indicators in the US economy, with increases in GDP, employment and personal consumption expenditure.
The big five Four out of the ‘big five’ key statistics show impressive increases on 2013 figures, with revenue now estimated at US$15.5bn (€13.8bn, £10bn), employees at 360,000, 20,660 locations and visits hitting a record high of 176 million (see Table 1).
Total revenue has gone up by approximately 5.3 per cent from US$14.7bn (€13bn, £9.5bn) in 2013. This was driven by strong growth in the number of spa visits, which rose to around 176 million in 2014, up from 164 million in 2013 (+6.7 per cent) and representing an all time industry high.
Almost 500 new spas opened in 2014, bringing the total number of facilities to 20,660, up 2.4 per cent from 20,180 in 2013. These new sites have assisted in boosting spa revenues and visits.
Once again the survey results show that day spas are the backbone of the sector, accounting for 79.5 per cent of all spa locations. Resort/hotel spas and medical spas both account for around 8 per cent and club spas for around 3 per cent.
Despite the rise in income overall, the average revenue per visit declined slightly, by US$1, or 1.3 per cent, to US$88 (€78, £57) in 2014. It’s likely that there are several reasons behind this and the survey data alone cannot explain precisely why this is the case. Clients visiting more often, but experiencing fewer or shorter treatments likely played a role. In addition, the increasing use of incentives and discounting are also likely to be contributing factors.
National employment in the US overall has grown by 2.3 per cent and this is also reflected in spa industry numbers with an estimated total of 360,000 employees – a record high for the sector. Both full-time and part-time positions have been created by spas, with full-time jobs increasing by 5,500 and a total of 7,500 part-time positions being added to the workforce. This is in line with ISPA’s previous study findings where part-time employment has seen greater growth than full-time. Positions which are filled by independent contractors in spas continues to decline, as has been the case since 2010.
Turning a profit The positive trend carries on when looking at spa profits. When considering all spas except for hotel/resort spas, almost three-quarters (73 per cent) report a 10 per cent profit or more, a sharp increase from 57 per cent in 2013. Two in three resort/hotel spas reported a profit in excess of 10 per cent, but this was slightly down on 2013 (71 per cent). Net losses in day, medical and club spas fell to 7 per cent from 13 per cent in 2013, and remained largely unchanged in resort/hotel spas at 6 per cent.
Recent trends While the ISPA research mainly looks at the key statistics from the previous 12 months (in this case, 2014), spa operators were also asked about their more recent experiences between September 2014 to March 2015. Around six in 10 spas said that in this time frame profitability had improved compared to the same period a year ago (see Graph 1) and this was consistent across different spa types, providing more evidence that the industry continues to grow.
Continuing the positive tone, seven out of 10 spas reported an increase in revenue, visits and client spend per visit in the six months. Each of these key indicators are at their highest since ISPA first asked spas these questions for its research in 2010. It’s clear to see that spas have recovered from the recession and are going from strength to strength.
The big five statistics have shown that employment in the spa industry is at its highest level and facilities are persistently hiring new staff in response to demand. Almost one in two spas (46 per cent) said they had increased staffing levels in the last six months compared to the same period in the previous year. However, demand for more service providers in the industry is evident, with an estimated 37,780 unfilled positions of which 41 per cent are full-time and 59 per cent are part-time. Massage therapists are particularly sought after, representing half of all the unfilled positions. While this is a challenging position for many spas to find themselves in, it’s another indicator of the rise in demand for spa services.
Looking ahead Spas are well aware of industry growth and are planning to take advantage of this in the future. Almost three in four spa businesses (74 per cent) said they’ll add or create new treatment offerings, 60 per cent said they’ll introduce new product lines and 55 per cent have plans to create a new spa menu in 2015.
On the theme of employment in the spa industry, almost two-thirds (65 per cent) of spas said they intend to add or create new employee training opportunities along with 57 per cent saying they plan to create new job opportunities. Competition to fill vacancies in the workforce may have led to this heightened focus on employees and their key role in the spa experience.
More than one-third of spas are concentrating on community engagement, such as seeking out local suppliers for ingredients for skincare and meals. Thirty-five per cent of spas say that they plan to add or create new community partnerships in the near future.
Yet the overwhelming next big trend was, perhaps unsurprisingly, found to be related to wellness, health and fitness and projecting spa visits as part of a healthy lifestyle. Many spas are proposing to offer a wider range of services aimed at health and fitness including stress management, integration of medical treatments, therapeutic treatments and healthy ageing.
Confidence at all-time high The positive outlook continues with an overwhelming majority of spas stating that they’re confident that revenues will continue to increase in 2015. Close to nine in 10 spas (89 per cent) said they were ‘very confident’ (53 per cent) or ‘confident’ (36 per cent) of an increase in revenues in the next six months. Confidence levels are therefore at their highest since tracking began in the 2012 industry study.
Read more from this issue of Attractions Management magazine
View contents of Attractions Management 2015 issue 4
Letters:
Concerns raised over massage-on-demand vetting systems
Interview: Michael Tompkins
What’s next for Michael Tompkins as he takes a step back at Hilton Head Health? Rhianon Howells finds out
Promotional feature: Dr Burgener Switzerland
Leading skincare brand Dr Burgener Switzerland combines natural ingredients with advanced technology to produce exceptional results – and the company sees customisation as the way forward for each of its spa clients
Trends: Workplace wellness
Neena Dhillon looks at two award-winning employee wellness programmes and asks how spas can get involved in this burgeoning market
Promotional feature: ESPA
ESPA International has always been a leader in the global spa business but has never been averse to change. The CEO and son of its founder explains how the company he joined 22 years ago is adapting to meet the challenges facing the industry today
Research: Onwards & upwards
ISPA research shows the US spa sector has reached new heights. Colin McIlheney analyses the findings
Promotional feature: Phytomer
Director of international development, Tristan Lagarde, explains how PHYTOMER has become a leader in the field of technological skincare development, and how spas can benefit from the brand’s success
Spa concept: Eforea 2.0
Hilton has refreshed its spa concept to make it more appealing to hoteliers. But what’s changed? Jane Kitchen finds out
Promotional feature: Living Earth Crafts
Brian Paris, spa designer and VP of sales for Living Earth Crafts, explains how the company is helping spa operators become more efficient with space-saving but stylish spa equipment and accessories
Table 1: 2015 US Spa Industry Study – The Big Five Statistics
Table 1
GRAPH 1: Change in Demand Over Past Six Months
GRAPH 1
About the research and ISPA
The 2015 ISPA Spa Industry Study, which takes in a detailed performance of spas in 2014, was based on 1,592 spa surveys and a database of more than 17,000 spas. Facilities also gave an account of their business performance in the six months from September 2014 to March 2015 to provide a more recent perspective.
This year’s full report with a technical appendix is available at experienceispa.com. ISPA members can download a copy for free.
Based in the US, ISPA represents operators and suppliers in over 70 countries, covering all aspects of the spa experience. Its first national study launched in 2000, followed by updates and other surveys ever since.
Colin McIlheney is the global research director at PwC and has headed up a number of studies for ISPA.
An opportunity to reimagine one of the UK’s most recognisable towers has been formally
opened by Rivington Hark, as St Johns Beacon invites operators and partners to shape its
next phase. [more...]
US spa visits, employment and industry confidence are at an all-time high according ISPA’s 2015 US Spa Industry Study. Research author Colin McIlheney outlines the findings
By Colin McIlheney | Published in Spa Business 2015 issue 4
The number of self-employed therapists has been in decline since 2010 / Monkey Business Images/SHUTTERSTOCK
Last year the International Spa Association (ISPA) reported that the US spa industry was back on track after the recession (see SBH15, p96). And now its 16th annual US Spa Industry Study shows that in 2014 the sector continued to perform strongly across key areas including overall revenue, spa visits, spa locations and employment. This is almost a mirror image of topline indicators in the US economy, with increases in GDP, employment and personal consumption expenditure.
The big five Four out of the ‘big five’ key statistics show impressive increases on 2013 figures, with revenue now estimated at US$15.5bn (€13.8bn, £10bn), employees at 360,000, 20,660 locations and visits hitting a record high of 176 million (see Table 1).
Total revenue has gone up by approximately 5.3 per cent from US$14.7bn (€13bn, £9.5bn) in 2013. This was driven by strong growth in the number of spa visits, which rose to around 176 million in 2014, up from 164 million in 2013 (+6.7 per cent) and representing an all time industry high.
Almost 500 new spas opened in 2014, bringing the total number of facilities to 20,660, up 2.4 per cent from 20,180 in 2013. These new sites have assisted in boosting spa revenues and visits.
Once again the survey results show that day spas are the backbone of the sector, accounting for 79.5 per cent of all spa locations. Resort/hotel spas and medical spas both account for around 8 per cent and club spas for around 3 per cent.
Despite the rise in income overall, the average revenue per visit declined slightly, by US$1, or 1.3 per cent, to US$88 (€78, £57) in 2014. It’s likely that there are several reasons behind this and the survey data alone cannot explain precisely why this is the case. Clients visiting more often, but experiencing fewer or shorter treatments likely played a role. In addition, the increasing use of incentives and discounting are also likely to be contributing factors.
National employment in the US overall has grown by 2.3 per cent and this is also reflected in spa industry numbers with an estimated total of 360,000 employees – a record high for the sector. Both full-time and part-time positions have been created by spas, with full-time jobs increasing by 5,500 and a total of 7,500 part-time positions being added to the workforce. This is in line with ISPA’s previous study findings where part-time employment has seen greater growth than full-time. Positions which are filled by independent contractors in spas continues to decline, as has been the case since 2010.
Turning a profit The positive trend carries on when looking at spa profits. When considering all spas except for hotel/resort spas, almost three-quarters (73 per cent) report a 10 per cent profit or more, a sharp increase from 57 per cent in 2013. Two in three resort/hotel spas reported a profit in excess of 10 per cent, but this was slightly down on 2013 (71 per cent). Net losses in day, medical and club spas fell to 7 per cent from 13 per cent in 2013, and remained largely unchanged in resort/hotel spas at 6 per cent.
Recent trends While the ISPA research mainly looks at the key statistics from the previous 12 months (in this case, 2014), spa operators were also asked about their more recent experiences between September 2014 to March 2015. Around six in 10 spas said that in this time frame profitability had improved compared to the same period a year ago (see Graph 1) and this was consistent across different spa types, providing more evidence that the industry continues to grow.
Continuing the positive tone, seven out of 10 spas reported an increase in revenue, visits and client spend per visit in the six months. Each of these key indicators are at their highest since ISPA first asked spas these questions for its research in 2010. It’s clear to see that spas have recovered from the recession and are going from strength to strength.
The big five statistics have shown that employment in the spa industry is at its highest level and facilities are persistently hiring new staff in response to demand. Almost one in two spas (46 per cent) said they had increased staffing levels in the last six months compared to the same period in the previous year. However, demand for more service providers in the industry is evident, with an estimated 37,780 unfilled positions of which 41 per cent are full-time and 59 per cent are part-time. Massage therapists are particularly sought after, representing half of all the unfilled positions. While this is a challenging position for many spas to find themselves in, it’s another indicator of the rise in demand for spa services.
Looking ahead Spas are well aware of industry growth and are planning to take advantage of this in the future. Almost three in four spa businesses (74 per cent) said they’ll add or create new treatment offerings, 60 per cent said they’ll introduce new product lines and 55 per cent have plans to create a new spa menu in 2015.
On the theme of employment in the spa industry, almost two-thirds (65 per cent) of spas said they intend to add or create new employee training opportunities along with 57 per cent saying they plan to create new job opportunities. Competition to fill vacancies in the workforce may have led to this heightened focus on employees and their key role in the spa experience.
More than one-third of spas are concentrating on community engagement, such as seeking out local suppliers for ingredients for skincare and meals. Thirty-five per cent of spas say that they plan to add or create new community partnerships in the near future.
Yet the overwhelming next big trend was, perhaps unsurprisingly, found to be related to wellness, health and fitness and projecting spa visits as part of a healthy lifestyle. Many spas are proposing to offer a wider range of services aimed at health and fitness including stress management, integration of medical treatments, therapeutic treatments and healthy ageing.
Confidence at all-time high The positive outlook continues with an overwhelming majority of spas stating that they’re confident that revenues will continue to increase in 2015. Close to nine in 10 spas (89 per cent) said they were ‘very confident’ (53 per cent) or ‘confident’ (36 per cent) of an increase in revenues in the next six months. Confidence levels are therefore at their highest since tracking began in the 2012 industry study.
Read more from this issue of Attractions Management magazine
View contents of Attractions Management 2015 issue 4
Letters:
Concerns raised over massage-on-demand vetting systems
Interview: Michael Tompkins
What’s next for Michael Tompkins as he takes a step back at Hilton Head Health? Rhianon Howells finds out
Promotional feature: Dr Burgener Switzerland
Leading skincare brand Dr Burgener Switzerland combines natural ingredients with advanced technology to produce exceptional results – and the company sees customisation as the way forward for each of its spa clients
Trends: Workplace wellness
Neena Dhillon looks at two award-winning employee wellness programmes and asks how spas can get involved in this burgeoning market
Promotional feature: ESPA
ESPA International has always been a leader in the global spa business but has never been averse to change. The CEO and son of its founder explains how the company he joined 22 years ago is adapting to meet the challenges facing the industry today
Research: Onwards & upwards
ISPA research shows the US spa sector has reached new heights. Colin McIlheney analyses the findings
Promotional feature: Phytomer
Director of international development, Tristan Lagarde, explains how PHYTOMER has become a leader in the field of technological skincare development, and how spas can benefit from the brand’s success
Spa concept: Eforea 2.0
Hilton has refreshed its spa concept to make it more appealing to hoteliers. But what’s changed? Jane Kitchen finds out
Promotional feature: Living Earth Crafts
Brian Paris, spa designer and VP of sales for Living Earth Crafts, explains how the company is helping spa operators become more efficient with space-saving but stylish spa equipment and accessories
Table 1: 2015 US Spa Industry Study – The Big Five Statistics
Table 1
GRAPH 1: Change in Demand Over Past Six Months
GRAPH 1
About the research and ISPA
The 2015 ISPA Spa Industry Study, which takes in a detailed performance of spas in 2014, was based on 1,592 spa surveys and a database of more than 17,000 spas. Facilities also gave an account of their business performance in the six months from September 2014 to March 2015 to provide a more recent perspective.
This year’s full report with a technical appendix is available at experienceispa.com. ISPA members can download a copy for free.
Based in the US, ISPA represents operators and suppliers in over 70 countries, covering all aspects of the spa experience. Its first national study launched in 2000, followed by updates and other surveys ever since.
Colin McIlheney is the global research director at PwC and has headed up a number of studies for ISPA.
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