Key Spa Business Trends for 2024
Compare your spa to top performers and industry averages with insights from the 2024 Beauty and Wellness Benchmark Report. Utilizing advanced spa software can help you stay ahead in this growing market.
The global spa industry is projected to exceed $185 billion by 2030, driven by increasing consumer interest in physical, mental, and spiritual wellbeing. According to the International Spa Association’s (ISPA) 2024 U.S. Spa Industry Study, all key spa industry benchmarks saw growth in 2023. U.S. spa industry revenues climbed from a record $20.1 billion in 2022 to $21.3 billion in 2023, marking a 5.7 percent year-over-year increase. Average revenue per visit also rose by over five percent, from $111.5 to $117.2.
Current trends indicate a broader range of spa services, including multi-day retreats, sound baths, mindfulness sessions, crystal healing, and light therapy. Along with new pampering options, spa guests seek greater convenience through flexible spa booking software and payment options.
But what tactics yield measurable positive business outcomes? Industry benchmarks can provide the answers.
Key Spa Trends to Capitalize on in 2024
The 2024 Beauty and Wellness Benchmark Report by Zenoti analyzes data from salons, spas, and medspas across the U.S. and Canada, offering a comparative view of membership-based vs. non-membership-based spas. The report highlights three achievement levels: top performers (top 10%), high achievers (top 25%), and the industry average.
These insights can help spa owners, managers, and therapists gauge their performance against average and top-performing spas and discover strategies for growth and improvement. Here are four key findings for spas from the 2024 report.
Higher Revenue at Membership-Based Spas
Data shows that membership-based spas with above-average revenue outperform non-membership-based spas. In 2022, top-performing spas (top 10% of earners) had 22% higher revenue than their non-membership peers. High-achieving (top 25%) membership spas earned 6% more than high achievers without memberships. Non-membership spas, however, often excel in specific tactical areas, like bundle selling, yet earn less overall revenue. This suggests that memberships, with recurring guest revenue, higher visit frequency, and customer loyalty, provide powerful, reliable outcomes with less effort per visit.
How to Get Started with Memberships
To implement a membership program at your spa, start by defining your objectives. Whether you aim to increase appointment frequency, enhance staff utilization, or achieve another goal, your objectives will guide the type of memberships you create for spa guests.
Better Tips and Commission Opportunities
Optimizing providers’ earning opportunities is key to retaining talent. Spas should keep service providers busy and equip them with best spa software to boost invoice totals through client preferences, add-on recommendations, service upsells, and easy rebooking. Membership-based spas show a significant advantage in average monthly tips per location, with high achievers receiving nearly double the tips of non-membership spas.
The Psychology of Higher Tipping
Members might tip more due to viewing membership costs as a special investment or having already paid for their monthly costs before service, making them more likely to tip generously. Membership benefits like priority booking and discounts can also motivate higher tips. Retail discounts included in memberships may lead to higher product sales and commissions for staff.
The Cost of No-Shows
No-shows result in lost revenue, underutilized staff, and no tips or commissions. Membership-based spas experience fewer no-shows compared to non-membership-based businesses. For every $46 lost to no-shows at membership spas, non-membership spas lose nearly $120.
Filling in the Gaps
Top performers reduce no-shows by implementing online booking, which allows for cancellation fee policies and credit card holds to ensure some payment for cancellations. Automated reminders and two-way texting also help keep appointments top-of-mind for clients. Membership clients are more diligent about keeping appointments to maximize their investment.
Best-in-Industry Staff Utilization
Membership-based spas achieve the highest industry utilization rates, averaging 51%. Top-performing non-membership spas also show impressive utilization, nearly 2.3 times the industry average. Spa businesses can employ tactics like intelligent scheduling, consistent rebooking, personalized marketing campaigns, and same-day availability notifications to improve utilization.
Other Utilization Strategies
Top-performing spas use spa management software to enhance utilization. For instance, online booking systems suggest alternative locations if the desired date or time is unavailable, send reminders for unfinished bookings, and manage waitlists to notify clients of available slots automatically.
For today's spa businesses, benchmark data provides insights into the spa industry and helps businesses understand their market position. By noting top trends and tactics, spa owners and managers can set better objectives and achieve improved results.
Online Sales of Gift Cards
Online gift card sales are the fastest-growing new revenue channel in the spa industry, rising 16% in 2023. Membership-based spas saw a 33% increase, and non-membership spas saw a 17% increase, highlighting the potential of this revenue stream.
Why Spas Should Prioritize Online Gift Card Sales
Gift cards are an excellent way to attract new customers, with 25% of all beauty and wellness gift cards redeemed by new clients. Online sales offer convenience, allowing spas to remarket abandoned purchases and encourage easy gift card transactions. Digital formats make sending gift cards to friends and family simple, promoting the spa through organic word-of-mouth.
Significant Growth in Packages
Package sales for membership spas grew by 85% in 2023, validating their effectiveness as a marketing strategy. Packages, whether service-product pairings or series of visits, offer upselling opportunities, enhance customer experience, and boost spa revenue.
Regional Perspectives
The leading spa service markets globally include North America, Europe, Asia-Pacific, South America, and the Middle East and Africa. Europe's spa service market, valued at $37.40 billion in 2023, is expected to grow at a 10.6% CAGR through 2030, with Germany leading the market. Global trends indicate significant growth opportunities, with the market anticipated to rise steadily between 2024 and 2031.
Trend Forecasting for the Future of the Spa Industry
The global spa services market is expected to grow significantly from 2024 to 2031, driven by rising adoption of advanced strategies by key players. Despite intense competition, the spa industry trend is positive, with continued investments anticipated.
To stay ahead, spa businesses should leverage the best spa software to streamline operations, enhance customer experiences, and capitalize on emerging trends.
For more detailed data, download your copy of the 2024 Beauty and Wellness Benchmark Report.
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