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
Jul 17, 2024 - Employment Rises, Labor Costs Down
- Employment in the other personal care services industry, including day spas and tanning salons, increased during the first five months of 2024, according to data from the US Bureau of Labor Statistics (BLS). Average wages for nonsupervisory employees in the industry have decreased during the first five months of the year, totaling $24.68 per hour in May 2024. Spa clients may choose more expensive or additional treatments during periods of higher consumer spending. Consumer spending levels were up 0.2% in May 2024, from the previous month, according to the Bureau of Economic Analysis.
- A new report by CivicScience shows that Gen Z is driving growth in non-surgical cosmetic procedures such as Botox and lip fillers. Overall, facial cosmetic procedures increased 18% between 2019 and 2022, and Botox injections climbed 73% during the same period. The share of US adults aged 18-24 who have had a non-surgical cosmetic treatment was 30%, more than double that of the general population, according to CivicScience data. Another 16% of Gen Z consumers have not tried non-surgical cosmetic treatments, but intend to, compared to 9% of the general population who intend to try the treatments. Per the report, Gen Z has grown up in an age of changing beauty standards, influenced by social media and a desire for aesthetic perfection. Adults aged 55 and over are the least interested in non-surgical cosmetic treatments, per the report.
- Automated or touchless wellness treatments are playing a bigger role in spa services, as client preferences shift and labor shortages continue, according to a recent report in Wellspa 360. The touchless options can accommodate customers who have expressed a heightened aversion to being touched and prefer treatments that provide relaxation without the need for hands-on manipulation. Spas are also adding automated wellness services to expand offerings during prevailing labor shortages and heightened demand for spa services. Touchless wellness treatments may include therapeutic baths, automated facials, hydrotherapy massage chairs, LED light pods, salt room therapy, cryotherapy, acoustic therapy, and infrared saunas. At the Carillon Miami Wellness Resort, the spa’s “touchless wellness options” include its popular Wellsystem Wave Massage, using dry water massage, and its ReLounge Wave Mat, using electrostimulation and heat therapy.
- A new report from the International SPA Association (ISPA) shows growth in all spa industry benchmark data in 2023 as the industry continues to improve post pandemic, according to Salon Today. Overall revenue reached a record $21.3 billion in 2023, up 5.7%, and average revenue per visit reached $117.2, up 5.1%. Other key data points included a 2.6% gain in spa industry employment, a 0.2% increase in spa locations, and a 0.6% rise in sessions. According to ISPA President Lynne McNeese, “Revenue drives growth for spas. Increasing overall revenue and dollars spent per visit allows spas to hire more employees and open new locations. This year’s good news will make it possible for the spa community to reinvest in growth.” The ISPA commissioned PricewaterhouseCoopers (PwC) to conduct the annual ISPA US Spa Industry Study.
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