Spas AREN'T Recession-Proof!
I've been amazed by all the stories popping up on how spas are "recession-proof" because of the latest statistics from the International Spa Association (ISPA), based in Lexington, Kentucky. Tell that to The Greenhouse, an iconic destination spa in Dallas that just went out of business! Tell that to massage therapists who are training in other fields because their income has been cut in half!
The misperception seems to have started with a story on spas in Reuters.com that quoted the ISPA 2009 U.S. Spa Industry Update. The stats for 2008 look great -- total spa industry revenue was up 17.8% from $10.9 billion to $12.8 billion, while visits were up from 138 million to 160 million.
The article quotes ISPA president Lynn McNess as saying "the spa industry is recession-proof." Some spa bloggers picked it up, and now my "Google Alerts" on spas is full of stories saying people aren't cutting back on spa treatments because they're so stressed out by the economy!
So I just want to set the record straight. The initial ISPA press release said "it's important to keep in mind that these numbers are from the calendar year of 2008, the first half of which was very profitable for many spas." In other words, business was so good in the first half that it made up for the fact that it fell off the cliff in the fall.
Also, in the initial release McNees was quoted as saying, "We are pleased to report that 2008 was another year of growth for the spa industry, but we know that we have a tough road ahead as our industry is not immune to the current economy." In other words -- spas aren't recession-proof!
A few interesting tidbits from the report. Day spas continue to dominate the industry at 79 percent of total spas. ISPA members average more revenue, visits, employees and space by significant margins. And medical spas are growing faster than any other spa type. Since July 2007, the number of medical spas has grown by 85 percent. Botox, anyone?
Photo by The Greenhouse
Comments
It’s dangerous to think anything is recession proof. Particularly if what some are saying about this recession lasting longer than some think. We all need to be careful with our money and make sure we using it wisely.
Thanks for the reminder, Anitra.
Hi Anitra,
A report from the field; Our Guest Visits are way up but the Spend per Guest is definitely down. We work very hard at the Value/Price Relationship for the experiences we offer and have seen other Spa’s with a similar pattern of business. We also see that some have been hit very hard and are struggling. We don’t think that any business is “recession proof” but with the right attention to details and people, Spa’s can both serve and prosper through any period. With gratitude (and lot’s of effort) we are!
Best,
Kristen Koman
Glen Ivy Hot Springs Spa
Dear Anitra,
Thank you for having the courage to bring up this issue. I have been cringing everytime I see a story on how the spa indusry is recession-proof. Every spa and spa vendor that I know has been adversely effected by the current economic crisis. Day spas are closing in every city, and the “AIG effect” has devistated resort spas that counted on corporate business. Now the resort spas are competing for the day business, causing event more strain on the day spas.
We hear from spa directors at our SpaExec meetings across the county that occupancies and spend are down–that many spas have priced themselves out of the market and have now entered the discounting fray. Whereas discounting was a dirty word a couple of years ago, spa directors are now embracing deep discounts.
Unfortunately we have no control what the media actually reports. If ISPA’s figure reflect the first part of 2008 so this should have been specified, otherwise the picture is all wrong. The Day Spa Association already issued a Recession Survival Guide in February of 2008 – the day spa industry started to experience the effect of a recession in the Fall of 2007 … I am not sure why the industry and the country in general didn’t want to admit this fact earlier.
The day spa industry has lost 1/3 – YES – one third of day spa facilities and honestly, I have to say, we needed a shake-out, as there was a saturation in the market place. Those day spas who are weathering the storm have from the very start implemented a strong customer service and result oriented spa treatments. I invite the industry to tune in this coming Monday, July 20 at 4pm EDT for our SPA Webinar HOW TO INCREASE MARKET SHARE
IN A RECOVERING ECONOMY – here is the link to the registration
http://www.spaclique.com/index.php/component/option,com_jevents/Itemid,200847/day,20/evid,228/month,07/task,icalrepeat.detail/uid,303faddd7ba532136359a33ab911bc6f/year,2009/
All participants will receive a FREE copy of our Recession Survival Guide
Hope to see you there!
Hannelore Leavy
Actually I was very surprised by those statistics. We are a consulting firm and we hear from spa owners and spa leaders on daily basis about how much they need our services due to their lack of growth. so I agree with you…