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
                              Source: Vertical IQ and Inforum

                              Recent Developments

                              Nov 18, 2023 - Employment, Wages Rise
                              • Employment levels for the other personal care services industry, which includes day spas and tanning salons, increased at the end of Q3 2023 and remained at higher levels on a year-over-year basis. Employment costs have climbed significantly in recent years as hourly wages have grown more than 30% since 2019. US consumer spending also grew modestly, with cash-strapped shoppers being more selective with their purchases. A growing consumer focus on health and wellness is expected to help drive growth in the US day spas and tanning salons industry, which is projected to rise at nearly 10% CAGR from 2022 to 2027, according to a recent Inforum forecast. This rate is faster than the projected growth of the overall economy.
                              • A new report from Kline Group shows that medical spa sales are projected to grow by more than 40% in 2023, according to WellSpa 360. The Multi-Site Skin Care and Wellness Destinations report found the med spa market is outpacing competitors within the total medical-dispensed skin care channel. There were 1,000 more med spa outlets in the US in 2022 compared to 2021, according to the American Medical Spa Association. Med spas, which typically have physician assistants, nurse injectors, and dermatologists on staff, are branching into new services such as fertility and mental health support.
                              • Upcoming beauty and wellness trends include more science-based beauty products, cold or heat therapies, and community-building events at spas, according to Mindbody’s 2024 Wellness Trends report in Athletech. More than half of consumers say their preferred beauty products are supported by research and clinical studies, with millennials and men more likely to look for science-based evidence in products. When asked about the most important aspect of a product, over a third said effectiveness was most important, and 23% said clean or organic ingredients. Increasing ties with the community is also key for spas and wellness providers. More than 60% of consumers have attended or would like to attend a community-building event hosted by a spa, medical spa, salon, or wellness center, and a third said they would choose a wellness business known for its social events. Consumers have also expressed interest in cold or heat therapies, such as cold plunges and infrared saunas, and a quarter of consumers have tried these therapies.
                              • More than 60% of hourly employees plan to leave their positions in the next 12 months, according to a new report in Chain Store Age. The “State of the Hourly Workforce” report by workforce management platform Legion Technologies surveyed 1,500 employees and 600 managers. Nearly 65% of workers said they plan to leave their current industry altogether. Not enough schedule flexibility, not enough benefits, and undesirable working conditions are the top factors that make an hourly job undesirable. Pay issues were also raised by respondents. More than 60% of hourly employees want to be paid every week, and getting paid early (early wage access) is becoming a differentiator for employers.
                              Get A Demo

                              Vertical IQ’s Industry Intelligence Platform

                              See for yourself why over 60,000 users trust Vertical IQ for their industry research and call preparation needs. Our easy-to-digest industry insights save call preparation time and help differentiate you from the competition.

                              Build valuable, lasting relationships by having smarter conversations -
                              check out Vertical IQ today.

                              Request A Demo