The US spa industry has had its strongest year since 2007, according to the International Spa Association (ISPA)’s 2013 US Spa Industry Study. The nationwide report clearly demonstrated that the five key statistics – visits, spending per visit, revenues, staffing levels and number of spas – have all grown. The findings were a continuation of the positive news from ISPA’s 2012 report (see SB12/4 p40), in parallel with the upturn of the US economy. The large-scale survey of 14,000 spa operators examined criteria such as financial performance, employment and growth in 2012, as well as ownership structures, number of visits and product and service offerings. Spas also gave an account of the six months from September 2012 to March 2013, across four key business indicators. The results corroborate the overall message of a return to growth which can be seen throughout the study. Looking forward, spas were asked about their confidence for future prospects and about what uncertainties might lie ahead in the industry and the economy as a whole. The big five In this year’s study, all five measures increased, which underscores the industry’s recovery. Total spa revenue is up 4.7 per cent, at US$14bn (€10.1bn, £8.7bn). Compared to the pre-recession peak of US$12.8bn (€9.3bn, £7.9bn), this 9.4 per cent increase highlights the extent of the recovery in revenue terms. Revenue-per-visit figures show customers are spending US$87.20 (€63, £53) on average – an increase of 1.8 per cent on the year before and the first significant rise in four years. The number of total spa locations continues to grow slowly: there are now 19,960 sites across the US – 0.5 per cent more than in 2011. This is positive news when set against the context of 2009-10 when spa closures outpaced new locations for two years. As of May 2013, total indoor floor space stood at an estimated 78 million sq ft, an increase of 1.1 per cent over May 2012. A breakdown of spa-types show that day spas remain the industry’s mainstay, with 78.9 per cent of the total, followed by medical spas (8.8 per cent), resort/hotels (8.7 per cent) and club spas (2.9 per cent). A promising trend in recent years has been the pace at which the total number of annual spa visits has increased each year. This continued, as total visits rose by 2.8 per cent, to 160 million. Overall employment increased by 1.2 per cent – a percentage point more than last year – meaning that 343,500 people now work in the US spa industry. However, there was a marked shift from full-time employment (-7.2 per cent) to part-time employment (+13.2 per cent). This could be an indication of wider changes in American working practices or may reflect the spa industry’s commitment to maintaining a flexible workforce. Adapting to create demand The ability of spas to raise prices and report increased profitability represents an increase in market demand, which is indicative of the bullish consumer sentiment witnessed across the economy. Strategically, spas continue to diversify their services in order to attract greater market share and to cater to a market that has become more price-aware over the past five years. Retail products offer an example of this diversification; on average, spas offer 11 different retail lines. There was variability in this data, with resort/hotels leading the way overall (18 retail lines) and ‘other’ spas (including medical) specialising in such areas as skincare products, where they offer more than double the range presented by day spas or resort/hotel spas. When asked to identify the most popular new product introduced in 2012, the variety on display was testament to the diversity spas have embraced in the wake of the recession. Traditional beauty products remain popular but have been bolstered with home goods, clothing and accessories and more specialised products such as homeopathy and ‘medical/therapeutic’ treatments. Treatment offerings within spas have also continued to diversify; where 28 per cent of those surveyed in 2011 offered shorter treatment times (30 minutes or less), this number has now risen to 61 per cent. Around half of spas now also offer special discounts or promotions to their social media audience (51 per cent), as well as having loyalty programmes (47 per cent), spa party packages (47 per cent) and giving customers the option to book treatments online (45 per cent). Reinforced confidence The positive news reported throughout the study is backed up by a survey of spas’ sentiments going forward; 78 per cent of spa operators said they anticipated an increase in revenues over the next six months. This was across the range of spa types and is the same figure as was reported in last year’s study, indicating an industry showing reinforced confidence.
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