Day Spas and Tanning Salons
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 30,900 day spas and tanning salons in the US provide personal care services to clients, including massages, indoor and sunless tanning, skincare treatments, and nail care treatments. Day spas and tanning salons also sell skincare and body care products, cosmetics, candles, vitamins and nutritional supplements, and other retail products. Some day spas also offer hair care services.
Competition for Services
Day spas face competition from other providers of massages and skin treatments, including hotel and resort spas, medical spas, fitness centers, independent masseuses, nail salons, and dermatology practices.
Indoor Tanning Health Concerns
Concerns over the health risks of using tanning beds threaten to reduce demand for tanning salons.
Industry size & Structure
The average day spa has 16 employees and generates over $842,000 in annual revenue, while the average tanning salon has 6 employees and generates about $275,000 in annual revenue.
- The spa industry in the US has about 21,500 locations, employs 345,000 people, and generates about $18 billion in annual revenue. About 80% of locations are day spas, with the remainder consisting of hotel and resort spas, destination spas, and medical spas.
- Tanning salons in the US have about 9,400 locations, 60,500 employees and generate about $2.6 billion in annual revenue.
- US consumers made 182 million visits to spas in 2023, according to the International SPA Association.
- Most day spas and tanning salons are independently owned and operated. Franchise locations of large chains account for less than 5% of industry revenue.
- Day spa chains include Massage Envy, Woodhouse Day Spa, and Bliss.
- Tanning salon chains include Palm Beach Tan, Planet Beach Tan, Hollywood Tans, and LA Tan.
Industry Forecast
Day Spas and Tanning Salons Industry Growth
Recent Developments
Dec 14, 2024 - Tax Changes Ahead for Beauty Industry
- Day spas and tanning salons may be facing some changes with several tax and tariff proposals from president-elect Donald Trump, according to a recent report in Salon Today. Caroline Moss of Azarvand Tax Law listed key proposals for the industry to monitor such as tax-free tips, overtime pay exemption, import tariffs and equipment costs, and the extension of the Tax Cuts and Jobs Act (TCJA). The proposed exemption of tips from income taxes would be a significant change for employees who earn a base pay plus tips, resulting in thousands more in pay each year. The exemption of overtime pay from income taxes could make overtime shifts more appealing to workers and give salons more flexibility to extend their operating hours or accept bookings during peak times. Proposed tariff increases would likely increase costs across all imported equipment and supplies, including professional beauty products, tools and supplies, and furniture and fixtures. The extension of the TCJA affects a variety of corporate tax provisions including pass-through income deductions and capital expensing.
- Consumer confidence levels increased in November 2024, improving by 2.1 points from the previous month, according to The Conference Board. The Consumer Confidence Index was 111.7 in November 2024 from 109.6 in October 2024. Dana Peterson, chief economist at The Conference Board, noted that those remaining most confident on a six-month moving average basis confidence were those aged under 35 and those in the income category of over $100,000. Per Peterson, “Consumer confidence continued to improve in November and reached the top of the range that has prevailed over the past two years.” Purchasing plans for homes stalled and new cars rose slightly in November 2024 on a six-month average basis.
- The US day spas and tanning salons industry is projected to grow at a CAGR of 5.8% between 2024 and 2028, according to a forecast for the “Other Services Sector” from Inforum and the Interindustry Economic Research Fund, Inc. The expected growth rate is faster than the overall economy‘s anticipated growth. Consumer confidence is expected to improve in the forecast period, which bodes well for the various other services sector. Factors that continue to limit consumer spending are lower consumer sentiment levels, higher interest rate levels, and elevated price levels. On a positive note, inflation is subsiding, which supports a moderate increase of real disposable income by about 1.9% in 2024 and 2.4% in 2025.
- US spa industry revenue saw another solid year in 2023, increasing 6% to $21.3 billion from $20.1 billion in 2022, according to data from the International SPA Association (ISPA) in the latest edition of Pulse magazine. The 2024 ISPA US Spa Industry Study released the “Big Five” statistics from the study: total revenue, spa visits, number of locations, revenue per visit, and industry employment. The study also includes compensation data, service offerings, average prices, and spa location distribution in the US. The number of spa visits grew in 2023, increasing from 181 million to 182 million. According to the study, revenue per visit climbed 5%, reaching $117.50. The average price per spa service grew 5% to an estimated $120, with all spa services seeing upward movement year over year. The average price per facial, for example, increased from $104 in 2019 to $130 in 2023 while the cost per body treatment grew from $114 in 2019 to $163 in 2023. Overall industry employment also increased by 2.6% in 2023 to 370,100.
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