By requesting a demo, you agree to receive communication from us. We’ll handle your info according to our Privacy Statement. By entering a phone number, you consent to receive phone calls and SMS from us.
See how your spa compares to top performers and the industry average, with findings from the 2024 Beauty and Wellness Benchmark Report.
The global spa industry is expected to grow to more than $185 billion by 2030 as more consumers focus on their physical, mental, and spiritual wellbeing. As per the International Spa Association’s (ISPA) “Big Five” statistics from the 2024 ISPA U.S. Spa Industry Study, all spa industry benchmark figures have increased in 2023. The study reveals U.S. spa industry revenues raised 2022’s record $20.1 billion to a new high mark of $21.3 billion in 2023—a year-over-year increase of 5.7 percent. Average revenue per visit also climbed by more than five percent, from $111.5 to $117.2.
Current trends include greater diversity in spa services with multi-day retreats, sound baths, mindfulness sessions, crystal healing, and light therapy. Along with new options for extra attention and pampering, spa guests also want greater convenience, like more flexible booking opportunities and payment options.
But which tactics lead to measurable positive business outcomes? Industry benchmarks can help answer this question.
In the 2024 Beauty and Wellness Benchmark Report, Zenoti shares key findings from data analysis of salons, spas, and medspas across the U.S. and Canada – including a comparative view of membership-based spas vs. non-membership-based spas. The report focuses on three achievement levels: top performers (top 10%), high achievers (top 25%), and the industry average.
Insights from the report can help spa owners, managers, and therapists see how they stack up against average and top-performing spas – and see the strategies that can lead to growth and improvement.
Here are four of the key findings for spas from the 2024 report.
Data reveals that membership-based spas with above-average revenue earn more than comparable non-membership-based spas.
In fact, the higher the revenue, the greater the impact of the membership model. In 2022, top-performing spas (the top 10% of earners) had 22% higher revenue than their non-membership peers. High-achieving (the top 25%) membership spas earned 6% more than high achievers that don't offer memberships.
However, non-membership spas often show greater results in specific tactical areas. For instance, they successfully implement bundle selling at a higher rate – yet earn less revenue overall.
This may be due to non-membership businesses focusing on upsell and add-on opportunities. But more important, it illustrates the powerful, reliable outcomes of memberships: recurring guest revenue, higher visit frequency, and customer loyalty. All with less effort per visit.
Hoping to implement a membership program at your spa? First, consider your objectives. Do you want to focus most on frequency of appointments, greater staff utilization, or something else? Your goals are the starting point for the type of memberships you should create for spa guests.
If you hope to achieve more appointment frequency per customer, setting up a certain number of visits within a particular timeframe may help. Similarly, a membership program that promotes add-on treatments and services can help boost utilization.
No matter your primary objective, you can create a membership program to match.
As important as overall revenue metrics and benchmarks are, it’s equally valuable to understand know how each provider can maximize revenue – and, in turn, earn higher tips and commission.
That must start with spas optimizing providers’ earning opportunities -- the key to retaining great talent. That means keeping each service provider busy throughout the day and giving them the information and technology to boost their invoice totals: client preferences, add-on recommendations, service upsells, and easy rebooking.
Here again, the membership model shows a marked advantage in terms of average monthly tips per location. In the high achiever category, membership-based spas receive nearly double the tips of those in non-membership-based spas. The industry average is just as fascinating, showing that providers received a whopping 4.3 times the tips of their non-membership peers.
Why would spa members tend to tip more than general spa clients?
It could be they view the extra cost of membership as a special investment – and feel more motivated to reward staff members for their attention. From a practical standpoint, members have already paid for their monthly costs before they arrive for service, a situation by which they're likely to tip more after treatment.
Also, consider that membership brings with it special benefits such as priority booking and discounts on spa treatments. These added benefits can also motivate guests to tip higher as a means of showing appreciation.
Since many memberships also include retail discounts, clients may be incentivized to spend more on products -- leading to higher commisions for staff members.
Wellness professionals everywhere understand the cost of last-minute cancellations and no-shows: lost revenue, underutilized staff, and no tips or commissions.
At the industry average, membership-based spas see considerably fewer no-shows than non-membership-based businesses. In fact, for every $46 (the average spa invoice) the average membership spa loses to no-shows, the average non-membership spa loses nearly $120.
As seen in the data, spa businesses can learn from the top performers, who have found ways to reduce or eliminate no-shows. How do they do it?
First, no-show numbers near zero are a sure sign of online booking. Zenoti data analysis shows that the higher the online booking rate, the lower the no-show rate.
Online booking allows spa management to build safeguards into the booking process. For example, a spa can share their cancellation fee policy during online booking, a strategy that encourages clients to reschedule instead of cancel. Spas can also ensure some payment for a no-show or cancellation by requesting clients’ credit card information and storing it on file for billing purposes -- which can then be charged for a cancellation or no-show fee.
Spas can also offer more touchpoints to clients in between visits, with automated email reminders and two-way texting keeping upcoming appointments top-of-mind with clients.
Finally, clients who purchase spa memberships tend to be more diligent about keeping appointments to get full value from their investment.
Every beauty and wellness business wants to see optimal utilization - making sure no open slot goes unfilled.
Data shows that membership-based spas enjoy the highest utilization rate of in the industry, with an average of 51% - just ahead of barbershops at 49%.
The top 10% of non-membership-based spas also show impressive utilization, with rates nearly 2.3 times the industry average in the same category. High achieving non-membership-based spas have a utilization rate 1.6 times higher than average.
To achieve these results, spa businesses may employ multiple tactics including intelligent scheduling, consistency in rebooking, personalized marketing campaigns, and even same-day availability notifications to regular clients or spa members.
Top-performing spas tend to leverage technology in ways that improve utilization. Here are a few examples.
Scenario: During online booking, a client is unable to book at their desired date or time.
Strategy: The online software automatically suggests another location, keeping the client within the network at their preferred date and timeslot.
Scenario: While booking via the spa's mobile app, a guest is distracted and leaves the booking unfinished.
Strategy: If the spa has enabled an 'abandoned cart' reminder feature, the client receives a friendly reminder to finish booking the appointment.
Scenario: The front desk is swamped, calling guests on the wait list to let them know their preferred time slot is available.
Strategy: To boost efficiency and utilization, the spa allows guests to add their name to an automated waitlist, via mobile app or online booking tool. When a slot opens, the system automatically recognizes the next person on the list and sends out a text message, to which the client can respond within 20 minutes.
For today's spa businesses, benchmark data can shine a light on the spa industry as a whole - and help each business understand its place in the market. By noting the top trends and tactics, spa owners and managers can compare their current state against similar businesses, paving the way to better objectives and results.
Get more data: Download your copy of The 2024 Beauty and Wellness Benchmark Report.
Online sales of gift cards are the fastest-growing new revenue channel in the spa industry. Although gift cards account for just 8% of the beauty and wellness industry’s revenue collection, online sales of gift cards across the industry are rising rapidly, up 16% in 2023.
For spa owners, the statistics on gift cards are even more attractive. In 2023, the online sales of gift cards were up by a whopping 33% for membership-based spas, and by 17% for non-membership spas, making a very strong case for including online gift cards to your spa business.
The reality is that the spa industry is not using the gift card channel to its maximum potential. And given the encouraging statistics on gift cards sales, especially online, here are some compelling reasons to prioritize gift card sales.
25% of all beauty and wellness gift cards are redeemed by a new customer. For the spa industry, this is a great opportunity to welcome new lifetime clients, at practically no acquisition cost.
More and more people are using gift cards to introduce family and friends to their favourite spa. This is organic positive word of mouth for the spa, without any promotional expenditures. By ensuring their gift cards easily available, the spa helps delighted customers promote on their behalf. When the receiver of the gift card utilises it and enjoys the spa services, it is also a validation of the original customer’s good taste.
Gift cards sales are shifting online, highlighting that customers value ease and convenience and are hence responding well to digital options and offerings.
In the physical space, the decision to buy a gift card is largely a one-time interaction. However, in the online space, customers who abandon gift card purchases can be remarketed to, easily. The spa software can send an email or text reminder to complete the transaction, incentivise with a discount coupon, and even place appealing ads when the customer is online. The ease of online purchase is such that with just a few clicks, the gift card is in your mail or WhatsApp. Sending the gift cards to their friends or family is also very convenient when it is in a digital format.
The 2023 package sales growth for membership spas stood at an astounding 85%, validating the fact that it is one of the more effective marketing strategies in the spa industry.
Simply put, packaging is nothing but creating and recommending a bundle of services and/or products for the spa customer. It can be a thoughtfully curated service plus product pairing, a tried and tested service pairing, a pre-set series of regular visits, priced at a package rate, or even a luxury “pampering yourself” package.
Either way, packaging is a great way to upsell the spa services and products, building an opportunity to increase revenue with every booking or purchase. It’s a win-win for the spa and the customers. Whether conventional or innovative, package sales can boost customer experience, and the spa’s bottom line, while being overall more economical for the customer. Also, it leads to better utilisation at the spa.
Although packages currently are a small potential of the spa revenue, the impressive growth rates warrant more focus, as there appears to be a potential for it to contribute to a greater share of the pie.
The leading spa service markets of the world are:
Europe Spa Service Market was valued at USD 37.40 Billion in 2023. Europe Spa Service Market size is estimated to grow at a CAGR of 10.6% over the forecast period, 2024-2030.
Germany is expected to dominate the market through the forecast period and it is expected to grow at the highest CAGR through the forecast period, as the rise in the ageing population in Europe region. Also, it is expected to gain a market value of 4.6 bn through the forecast period. France's market growing at 11.3 % CAGR and is expected to grow through the forecast period.
Globally, countries like Romania, France, Qatar, Vietnam and China were the most ‘searched’ spa destinations in 2023. While in terms of spa treatments, cold plunge therapy – also known as ice bathing or cold-water immersion, is set to be the top trending spa treatment in 2024, followed by lymphatic drainage face massage.
The Global Spa Services market is anticipated to rise at a considerable rate between 2024 and 2031. In 2023, the market grew at a steady rate and with the rising adoption of strategies by key players, the market is expected to rise over the projected horizon.
North America, especially the United States, will still play an important role and any changes from United States might affect the development trend of Spa Services. The market in North America is expected to grow considerably during the forecast period. The high adoption of advanced technology and the presence of large players in this region are likely to create ample growth opportunities for the market. Europe also play important roles in global market, with an impressive CAGR growth during the Forecast period 2023-2031.Spa Services Market size is projected to reach Multimillion USD by 2031, at unprecedented CAGR during 2023-2031.
Despite the presence of intense competition, due to the global recovery, the spa industry trend is clear. Investors are still optimistic about this area, and it will still be more new investments entering the field in the future.
Beauty and wellness businesses love Zenoti. 1,000+ reviews and counting.
