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 Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, 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

                              Coronavirus Update

                              Apr 28, 2022 - States Drop Mask Mandates
                              • Demand for day spa and tanning salon services may increase as pandemic conditions have improved and restrictions have eased. Hawaii, the final holdout among states with indoor masking mandates, let its mask mandate expire on March 25. The Centers for Disease Control and Prevention (CDC) still recommends that masks be worn in areas of substantial or high transmission, regardless of vaccination status.
                              • Twenty-three states prohibit proof-of-vaccination requirements for entry to businesses including day spas and tanning salons. Twelve states -- California, Colorado, Connecticut, Louisiana, Massachusetts, Minnesota, Nevada, New Jersey, New York, Rhode Island, Virginia, and Washington — have digital apps available for vaccine verification. Some major cities that had required proof of vaccination for indoor dining – including New York, Los Angeles, San Francisco, Seattle, Philadelphia, and Boston - have since removed the requirement.
                              • New COVID-19 cases are decreasing nationally, and day spas and tanning salon patronage may increase. In late April 2022, the CDC announced that according to the agency’s research, about 60% of the US population had been infected with COVID-19 by February 2022. Some medical experts suggest the high rate of infection and the resulting increase in immunity among the US population may signal a new phase where infections cause less and less severe illness.
                              • Many analysts say that businesses should prepare for an upcoming pandemic-related spending shift that is increasingly referred to as revenge shopping. Shoppers will sweep through sectors as pent-up demand is unleashed, according to management consulting firm McKinsey. That has been the experience of all previous economic downturns. One difference, however, is that services have been particularly hard hit this time. The bounce-back will therefore likely emphasize those businesses, particularly the ones that have a communal element, such as restaurants and entertainment venues. Shoppers will sweep through sectors as pent-up demand is unleashed, according to management consulting firm McKinsey. That has been the experience of all previous economic downturns. One difference, however, is that services have been particularly hard hit this time.
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