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 181 million visits to spas in 2022, 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
Apr 16, 2024 - Higher Growth Forecast for Industry
- The US day spas and tanning salons industry is projected to grow at a CAGR of 6.2% between 2024 and 2028, according to a forecast from Inforum and the Interindustry Economic Research Fund, Inc. The expected growth rate is faster than the overall economy's anticipated growth. The report noted that consumer confidence levels have improved, which bodes well for the other services industries, which include day spas and tanning salons. Additionally, consumer sentiment has seen a degree of improvement following sustained lower levels. A broad recovery is underway for many in-person services that were affected when consumers were largely limited to their homes in 2020 and 2021. Factors that continue to limit spending are higher price levels and interest rates, though both are expected to improve in 2024. Post-pandemic, consumer spending has shown slower gains of 2.5% in 2022 and 2.2% in 2023, supported in part by savings amassed by households from federal pandemic relief programs.
- Consumer confidence levels were essentially unchanged in March 2024, after a dip in February following three consecutive months of growth, according to data from The Conference Board. The Conference Board’s consumer confidence index was 104.7 in March 2024 from 104.8 in February 2024. According to Dana Peterson, Chief Economist at The Conference Board, “Consumers’ assessment of the present situation improved in March, but they also became more pessimistic about the future.” Peterson added that confidence rose among householders 55 and over but fell for those under 55. Plans to purchase homes, autos, and large appliances decreased slightly on a six-month basis.
- Inflation was reported as the top business problem for small business owners, selected by 23% of owners in a survey by the National Federation of Independent Business (NFIB). The NFIB’s Small Business Optimism Index fell in February 2024 to 89.4, marking the 26th consecutive month below the 50-year average of 98. According to NFIB Chief Economist Bill Dunkelberg, “While inflation pressures have eased since peaking in 2021, small business owners are still managing the elevated costs of higher prices and interest rates. The labor market has also eased slightly as small business owners are having an easier time attracting and retaining employees.” Small business owners are still encountering high job opening levels, with a seasonally adjusted 37% of owners reporting job openings they could not fill in the current period. Nearly 55% of owners reported making capital outlays in the past six months, with 35% spending on new equipment, 23% acquiring vehicles, and 15% improving or expanding facilities.
- According to the 2024 International SPA Association (ISPA) Consumer Study, frequent spa-goers spend more during each spa visit than those who go less often, and they desire clarity and transparency regarding gratuities. The study, which was conducted in partnership with PricewaterhouseCoopers, aims to help spa operators better tailor their offerings to their most engaged customers. The study also looked at the preferences of Gen Z spa goers, who tend to feel uncomfortable with certain aspects of spa visits such as selecting treatments and discussing preferences with therapists. The study found that nearly 70% of active spa goers favor online booking availability, and 66% prefer receiving text reminders. Spa subscription options and the integration of spas with medicine are also growing in popularity at spas. More than two in three spa-goers say medicine-related treatments and services may help them decide on future spa visits.
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