Med Spas
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 8,800 medical spas offer cosmetic medical procedures and traditional spa services under the supervision of licensed healthcare professionals. Operators provide a variety of aesthetic, minimally invasive, and non-invasive procedures that enhance physical appearance. Popular treatments include dermal fillers, neuromodulators/Botox, laser treatments, microdermabrasion, and chemical peels. Medical spas employ trained staff, such as registered nurses (RN), nurse practitioners (NP), physician assistants (PA), and aestheticians, to administer procedures.
Medical Complications
Medical procedures naturally come with some risk of complications, and those performed by nonphysician personnel in medical spas have elevated risks.
Government Regulation
Because medical spas are technically medical practices, operators are subject to regulatory oversight by state medical boards, which determine what constitutes a medical procedure, who can perform the procedure, the staffing ratio of physicians to non-physicians, and what qualifies as on-site/off-site supervision.
Industry size & Structure
The average medical spa operates out of a single location and generates almost $2 million annually, according to the American Med Spa Association. Single-location medical spas employ an average of eight workers and generate just over $121,000 annually. Multi-location operators employ an average of 16 workers at the primary facility.
- The medical spa industry consists of over 8,800 operators that employ 70,000 workers and generate about $15 billion, according to the American Med Spa Association.
- The medical spa industry is fragmented; over 80% of firms operate out of a single location. Multi-location operators average six locations.
- Two-thirds of medical spas have a single owner. Over 60% of medical spas have an owner who is not a physician.
- Large firms include Ideal Image and Laser Away.
Industry Forecast
Med Spas Industry Growth
Recent Developments
Oct 18, 2024 - Prices Increase for Personal Care Services
- Prices for personal care services were 4.8% higher in September 2024 compared to the previous year and up 0.1% compared to the previous month, according to Consumer Price Index data from the Bureau of Labor Statistics (BLS). Average wages for nonsupervisory employees at other personal care services, including med spas, fell 0.5% in July 2024 year over year, reaching $25.26 per hour, according to the BLS. Employment by other personal care services increased 6.5% in July 2024 compared to a year ago. Employment levels for the industry are 12% higher than pre-pandemic levels. Consumer spending, a key driver for the industry, has improved modestly, rising 2.6% in June 2024 compared to a year ago and up 0.2% from the previous month, according to the Bureau of Economic Analysis.
- The US med spas industry is projected to grow at a CAGR of 6.3% between 2024 and 2028, according to a forecast for the “Other Services Sector” 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 spending, along with expenditure by businesses, drives the other services sector. Consumer confidence is expected to improve in the forecast period, which bodes well for the other services sector. Factors that continue to limit consumer spending are lower consumer sentiment levels, higher interest rate levels, and elevated price levels. On a positive note, inflation is subsiding, which supports a moderate increase of real disposable income by about 1.9% in 2024 and 2.4% in 2025.
- US spa industry revenue saw another solid year in 2023, increasing 6% to $21.3 billion from $20.1 billion in 2022, according to data from the International SPA Association (ISPA) in the latest edition of Pulse magazine. The 2024 ISPA US Spa Industry Study released the “Big Five” statistics from the study: total revenue, spa visits, number of locations, revenue per visit, and industry employment. The study also includes compensation data, service offerings, average prices, and spa location distribution in the US. The number of spa visits grew in 2023, increasing from 181 million to 182 million. According to the study, revenue per visit climbed 5%, reaching $117.50. The average price per spa service grew 5% to an estimated $120, with all spa services seeing upward movement year over year. The average price per facial, for example, increased from $104 in 2019 to $130 in 2023 while the cost per body treatment grew from $114 in 2019 to $163 in 2023. Overall industry employment also increased by 2.6% in 2023 to 370,100.
- A NerdWallet 2024 Cost of Beauty Report found that 26% of Americans have purchased cosmetic procedures for themselves, and 11% consider cosmetic procedures a good financial investment, potentially giving them an advantage professionally. In all, 75% of US adults have made a beauty-related purchase for themselves including skin care products (54%), hair products (41%), cosmetic purchases (39%), nail salon treatments (33%), hair salon treatments (30%), hair removal (19%), cosmetic dental procedures (19%), skin spa treatments (18%), nonsurgical cosmetic procedures (7%), cosmetic surgeries (7%), or other (3%). Nearly 60% of consumers used cash or a debit card for beauty purchases, 39% used a credit card that they paid in full by the due date, 21% used savings, 14% used a credit card that they didn’t pay off in full by the due date, 10% used a loan product from the provider of the service/product, and 9% buy now pay later services.
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