More Than Mere Indulgence Day Spas Profiler 2016 © 2016 THE MEDIACENTER. All rights reserved.

US Spa Industry Statistics, 2013–2015 Operations 2013 2014 % Change Revenue $14.7 billion $15.5 billion +5.3% Spa visits 164 million 176 million +6.7% Locations 20,180 20,660 +2.4% Revenue per visit $89 $88 -1.3% Employment May 2014 May 2015 Total employees 349,900 360,000 +2.9% Full-time 148,300 153,800 +3.7% Part-time 157,000 164,500 +4.8% Contract 44,600 41,700 -6.5% International Spa Association, August 2015

A Peek at Where the Magic Happens According to Day Spa Association’s 2015 Spa & Wellness Retail Survey Report, 49% of spa owners said their 2014 annual gross revenues were less than $200,000, and 56% said their revenues increased, but only 18% said they decreased. More than 60% of day spa owners have been operating their facilities for 10 years or fewer: 24%, less than 3 years, and 37%, 4 to 10 years. Of the other owners, 17% said 11 to 15 years, and 22%, 16 years or more. The survey also found that 42% of customers spent an average of $51 or more during a spa visit; 30%, $21 to $50; 11%, $16 to $20; 6%, $11 to $15; and 10%, $10 and less.

Retail Products: Essential Revenue Drivers Retail products are an important profit center for day spas. During Q4 2015, 52% of spa owners said their retail revenues increased, with just 19% experiencing a decrease. For 2016, 81% expect an increase in retail sales; only 3% think sales will decrease. The Day Spa Association’s Q4 2015 Retail Sales Snapshot Report revealed that 34% of spa owners allocated 5% to 10% of their facilities’ square footage to retail sales; 28%, less than 4%; 13%, 11% to 15%; 14%, 16% and more; and 12%, none. Of all spa owners surveyed for the Q4 2015 report, 44% said the average amount that their customers spent on retail products was $21 to $50; 31%, $51 or more; 9%, $16 to $20; 8%, $11 to $15; and 9%, $10 or less.

Retail Products: Essential Revenue Drivers Retail products are an important profit center for day spas. During Q4 2015, 52% of spa owners said their retail revenues increased, with just 19% experiencing a decrease. For 2016, 81% expect an increase in retail sales; only 3% think sales will decrease. The Day Spa Association’s Q4 2015 Retail Sales Snapshot Report revealed that 34% of spa owners allocated 5% to 10% of their facilities’ square footage to retail sales; 28%, less than 4%; 13%, 11% to 15%; 14%, 16% and more; and 12%, none. Of all spa owners surveyed for the Q4 2015 report, 44% said the average amount that their customers spent on retail products was $21 to $50; 31%, $51 or more; 9%, $16 to $20; 8%, $11 to $15; and 9%, $10 or less.

Pampered Patrons ISA research has revealed that the typical day spa customers are women, 30–40, with a college degree and $50,000–$150,000 annual income; and men, 25–44, with an annual income of more than $50,000 and working in a management or executive position. Although many day spas offer massage services, 17% of consumers participating in a July 2015 American Massage Therapy Association survey said they received a massage at a spa during 2015, compared to 21% during 2014. Spring 2009 was when the most people (17.34 million) since before the recession used the services of a day spa during the past 12 months. The low point was Spring 2011, at 15.11 million. Since then, the total has increased to 16.22 million for Spring 2015.

An Enlarging Landscape of Luxury According to multiple sources, the spa experience is already integrating with medical care, as private hospitals morph into “wellness hotels” with both inpatient services and accommodations for family members and friends. Cruises are also emphasizing spa treatments and wellness, in terms of diet and exercise, evolving from the often excessive eating, drinking and partying of a traditional cruise. In addition, many onshore activities and excursions are wellness- based. Another trend is specialized spa and wellness programs targeting children who are often eating poorly, experiencing too much stress from school and activities and spending too much inactive time with their digital devices.

Advertising Strategies Because a day spa visit is a very personalized experience, a client appreciation week promotion is a great way to say “thank you” to regular customers and attract new ones with daily specials and discounts on retail products with a qualifying treatment. Another new-customer promotion that works well in the day spa setting is bundling services/treatments at a discounted price; so new customers experience multiple treatments, thus creating added future interest in more services. Mother’s Day and Father’s Day are obvious celebrations for targeted promotions, but Back- to-School would be a good time to offer mothers a special to alleviate their shopping stress.

New Media Strategies Hire a student photographer for a day to shoot before-and-after pictures of facial customers that can be immediately uploaded to their phones for sharing with their friends on social media, creating a word-of-mouth buzz for the spa. Record and upload videos of spa professionals/technicians explaining and showing how they provide various treatments and the benefits of each. Customers and/or fellow professionals can be the “models” for the videos, with a special gift for customers who participate. People love to tell and read stories; so ask customers to post their stories with photos or videos of a particular problem or issue they were experiencing and how spa treatments solved the problem.

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