The 2021 ISPA U . S . Industry Study ’ s “ Big Five ” Statistics were revealed live to attendees of the ISPA Stronger Together Summit in May by Colin McIlheney and Russell Donaldson of PricewaterhouseCoopers ( PwC ). Predictably , the new figures reveal a significant drop in overall industry revenue , total number of spa visits and the total number of employees — full-time , part-time or contract — working in the industry ( see page 14 ). But behind those stark figures lie a number of important observations about how the spa industry has been affected by the COVID-19 and what the next phase of its recovery might look like .
What ’ s the Damage ?
After more than a year of spa closures , occupancy limits , travel disruptions and staff reductions , it wasn ’ t particularly surprising to learn of the pandemic ’ s substantial effect on nearly every one of the Big Five . “ Clearly , because of the pandemic — lockdown , the fact that people could not get out to go to spas , the obvious difficulty traveling to get to remote locations — this had a severe impact on all the key metrics ,” noted Colin McIlheney , leader of global research at PwC . “ I feel it ’ s very incumbent on us , having been with you for such a long time doing these numbers , to highlight clearly the impact that the pandemic has had on the industry .” McIlheney also pointed out that , at first glance , the 2021 Big Five seem most similar to the figures from around the time of the great recession , though he urged attendees not to get too caught up in the comparison . “ What we ’ re facing now is a very different issue and a different problem with different opportunities and different challenges than in 2009 ,” he explained
“ The great recession was a different illness with the same symptoms ,” said Russell Donaldson , manager at PwC , referring to the lower industry revenue and drop in spa visits .“ 2008 to 2009 was problematic because of a fall in demand . Fewer people had disposable income to spend on ‘ luxuries ’ like spa-going , so demand fell and the industry suffered . This time , it ’ s more a crisis of supply . It was the enforced closures and concerns about public health that were stopping people from visiting .”
The distinction here is crucial , because the different root causes of these events means that the recovery from them will likely be different as well . For instance , Donaldson noted that spas commonly discounted treatments and services during the great recession to incentivize spagoers with less disposable income to return . Such measures will likely not be required as part of the industry ’ s recovery this time around , he said : “ The indicators we ’ re seeing now show the overall demand [ for spa services ] is high . A lot of people have more disposable income that they had when the pandemic struck . People have been stuck at home without a service that they love for a fairly long period of time , and there are good signs that demand will be high as things loosen from the pandemic .” Colin McIlheney was in full agreement . “ I believe the mantra at the moment is , ‘ Open it and they will come .’ I think if we can get the spas open , you will see unprecedented demand to get back to spas and back to the services that people want .”
Reasons for Optimism
As both McIlheney and Donaldson noted throughout their session , the spa industry ’ s longer-term outlook is far from doom-and-gloom , despite the impact evident across the Big Five . In fact , one positive indicator can be
“ I believe the mantra at the moment is , ‘ Open it and they will come .’ I think if we can get the spas open , you will see unprecedented demand to get back to spas and back to the services that people want .”
— Colin McIlheney , PwC
JULY 2021 ■ PULSE 15