Pulse Legacy Archive January / February 2013 | Page 43

in visits, up by 4.1 percent in 2012 to 156 million. But while visits were up, revenue per visit stayed virtually unchanged at US$86, with a slight lift of 0.4 percent compared to 2010. Nonetheless, the notable increase in visits is a positive sign. Across the U.S., the total number of spa locations now stands at 19,850, largely unchanged from 19,900 in 2010. After two successive years of decline, in 2009 and 2010, this is welcome news. In those years, spa locations fell by 1,400 following the sharp economic downturn. Day spas are, by far, the largest category, representing 78.9 percent of all spas, followed by medical spas at 8.8 percent, resort/hotel spas at 8.7 percent, club spas at 2.9 percent, destination spas at 0.4 percent and mineral spring spas at 0.3 percent. Total employment held steady, with a 0.2 percent increase between May 2011 and May 2012. However, there has been a marked shift towards full-time employees, up by 9.3 percent; a further sign that the industry is back on track and gearing up for the rising number of visits. Total square footage also held steady, with an estimated expansion of less than one percent. ISPA MEMBERS may download a complimentary copy of the ISPA 2012 U.S. Spa Industry Study and nonmembers may purchase the report on experienceispa.com. Strategies to Stimulate Demand What strategies have spas adopted to stimulate demand and increase spa visits? According to the study, the following were employed by spa operators: ● Keep prices steady. Operators are keeping prices steady to maintain competitiveness against a backdrop of rising consumer prices. Average price per spa service (US$80) remained unchanged in 2011 compared with both 2010 and 2009. This is likely to reflect the moderate pace of consumer spending and the use of discounts and rewards to encourage visits and loyalty. However, holding prices steady also means that improving profitability is likely to remain challenging for many spas. ● Expand service menu. Spas across the board are expanding their portfolio of services, offers and products, to provide more choices and flexibility to busy customers. Over 83 percent reported making one or more changes over the past 12 months in response to recent economic conditions. Nearly one in four added additional health and wellness programs, with 28 percent introducing shorter treatment offerings of 30 minutes or less to bring greater value and efficiency to time-pressed clients. Almost one in three operators expanded their spa treatment menu and 55 percent have added new retail products. ● Step Up Use of Social Media. Ninety-six percent of spas have their own website and are stepping up the use of online social media, up from 82 percent in 2011 to 88 percent in 2012. Three in four spas offered one or more gift card promotions. 5. Between the survey period of September 2011 and March 2012, what key trends were identified? The survey of spa operators carried out to cover the period September 2011 to March 2012 revealed a continuation of the upward trend. When asked about their more recent experience, the majority of spa operators reported a lift in demand compared to the same period one year ago. Almost six in 10 said visits were up and 55 percent reported increased client spending per visit, across all types of spas. Sixty percent of operators experienced a growth in revenues. Staffing levels stayed evenly balanced. These are positive developments, showing an improvement on the 2011 survey results when a minority of 45 percent reported a growing spend per visit. Driven by the increasing demand, profitability is on the upswing. Fifty-five percent of spas reported a 2011 profit percentage topping 10 percent, up from 49 percent in 2010. Most spas also said that profitability had improved between September 2011 and March 2012 compared to 12 months previously. However, almost one in five spas, or 17 percent, reported a net loss in 2011, virtually unchanged from 2010 (18 percent). Together, these results show an industry that has stabilized in terms of staffing and location numbers and is experiencing a modest but broadly based recovery. ■ WHAT DOES THE ISPA 2012 U.S. Spa Industry Study indicate when it comes to the challenges the spa industry is currently facing? Click to read more. January/February 2013 ■ PULSE 41