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.

Indoor Tanning Health Concerns

Concerns over the health risks of using tanning beds threaten to reduce demand for tanning salons.

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.

Industry size & Structure

The average day spa has 14 employees and generates over $561,000 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 304,800 people, and generates about $12 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 124 million visits to spas in 2020, 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, Bliss, and Mynd Spa & Salon.
    • Tanning salon chains include Palm Beach Tan, Planet Beach Tan, Hollywood Tans, and LA Tan.
                              Industry Forecast
                              Day Spas and Tanning Salons Industry Growth
                              Source: Vertical IQ and Inforum

                              Recent Developments

                              Mar 10, 2023 - Growth Projected for Global Professional Spa Services Market
                              • The global professional spa services market is projected to grow at a CAGR of 5.4% from 2023 to 2033, reaching $194.3 billion, according to a FACTMR report in HAPPI. The global professional spa services market is expected to be worth $114.8 billion in fiscal year 2023, up from $109 billion the previous year. The massage segment of the spa market is expected to account for a market share of 35%. One major growth driver is wellness tourism, with tourists increasingly choosing “green” concept-based services. Other segments growing in popularity are cruise-based spa services, couple’s packages at destination spas, and convenient services such as those based in airports. North America is expected to have a 24% global market share by the end of 2033. Growth markets include the US and China, projected to expand at a CAGR of 5.5% and 6.8%, respectively, during the forecast period.
                              • Nearly 60% of small business owners reported hiring or trying to hire staff in January 2023, up two points from the previous month, according to the monthly jobs report from the National Federation of Independent Businesses (NFIB). Of those companies hiring or trying to hire, 91% of owners reported few or no qualified applicants for the positions they were trying to fill. About 24% of owners reported labor quality as their top business operating problem, and 10% reported labor costs as a top concern. According to NFIB Chief Economist Bill Dunkelberg, “The labor shortage continues to be a major concern for small businesses in the New Year as nearly all owners trying to hire are reporting no or few qualified applicants. Small businesses’ sales opportunities are limited because of the staffing shortage but owners continue to make changes in business operations to compensate.”
                              • A new bill proposed in the Senate would offer tax credits for tips to beauty service providers, including hair stylists, manicurists, and skincare specialists, according to Accounting Today. The “Small Business Tax Fairness and Compliance Simplification Act” was introduced by Ben Cardin (D-Maryland) and Tim Scott (R-South Carolina) in January 2023. The bill expands the tax tip credit under the Federal Insurance Contribution Act to include beauty businesses. The tax code currently allows food and beverage establishments to claim a credit against the business’ income taxes for FICA taxes paid on tip wages. The bill would amend the tax code to apply to tips for hair care, nail care, esthetics, and body and spa treatments. According to Cardin, “Workers in the beauty services industry are as reliant on tips as food and beverage workers, and it is time for the tax code to catch up.”
                              • Wellness breaks are on the rise for travelers, with a 30% increase in demand in 2022 over 2021, according to a new study called “The No-Normal: Unexpected Travel Trends in 2023,” by the Expedia Group. The study, released in December 2022, contains an analysis of global traveler trend data from Expedia,, and Vrbo. Nearly half of the survey respondents said they are more open to wellness breaks than before, but with a focus on new experiences. The US was the top overall wellness break destination in 2022, while Gen Z looked abroad to more unexpected destinations, including Iceland, Norway, Sri Lanka, Switzerland, and Turkey. New wellness experiences are replacing classic activities such as sports trips, cooking sessions, and meditation. Some popular alternatives include chakra sessions, food boot camps, forest bathing (sylvotherapy), fruit harvesting, laughter therapy, and puppy yoga.
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