Highlights from the International Spa Association’s Spa Industry Studies

The International Spa Association (ISPA) commissioned two studies of the spa industry in the U.S. and Canada; one in 2002, and a follow-up in 2004. The following data are highlights from the 2004 ISPA Spa Industry Study.

• Industry Characteristics: There are an estimated 12,100 spas throughout the U.S. and 2,100 in Canada. In the U.S., the largest spa category is day spa, accounting for seven of every 10 spas. Resort/hotel spas are the second largest group, followed by club spas, medical spas, mineral springs spas and destination spas. Geographically, the distribution of spas in the U.S. generally reflects the distribution of the population with the Northeast being the largest region.
• Growth: The number of spa locations continued to grow between the 2002 and 2004 at an average annual rate of 12%. Interestingly, the growth rate in the number of spas has gradually moderated since its peak at 51% in 2000. Between 2002 and 2004, the medical spa segment expanded faster than any other segment, with the number of medical spas growing by 109% compared to 26% for the U.S. spa industry as a whole. Resort/hotel spas also have grown faster than the industry average.
• Total Revenues: The U.S. spa industry generated an estimated $11.2 billion in revenues in 2003. On average, half (52%) of a spa’s revenue is derived from treatment rooms. Resort/hotel spas, despite the size of the segment, account for an impressive 41% of industry revenue while the largest segment, day spas, accounts for just under half (49%).
• Revenue Growth: Aggregate industry revenue growth has moderated over the last couple of years. Between 1997 and 2001, aggregate revenue was doubling every two years. However, in 2002 the industry saw a more moderate growth rate of 6.5% bringing industry revenue to $11.4 billion. This growth rate is more in line with what other key leisure industries experienced in 2002 and is more sustainable over the long term. In 2003, the spa industry’s $11.2 billion in revenue represents a slight decline of 1.8%.
• Employment: An estimated 280,700 people are employed by the U.S. spa industry. Fifty-one percent (51%) of these employees are full-time, 34% are part-time and 15% are on contract. Employee wages and salaries totaled approximately $4.9 billion in 2003. Employment: Employment in the spa industry has remained relatively stable since 2001, fluctuating between 254,000 and 282,000 employees

Compensation for Spa Directors

Seventy-five percent of resort spa directors make over $50,000 per year, and 27% make over $75,000 per year. Forty-two percent of club spa and destination spa directors make over $50,000 per year.

The Need for Spa Directors

One of the top10 issues and priorities identified by the 2002 study was the shortage of candidates for spa leadership positions who have adequate formal education and training in management, leadership, spa operations, and interpersonal skills. “Hiring and training qualified management candidates is equally challenging for most spas, as many internal hires lack business skills, while many outside hires lack spa industry knowledge. Middle and senior level positions seem to be more difficult to fill, according to executives. Most admitted that they prefer to hire candidates that have the business and people skills, and then educate them about the spa side.”

Preparing to be a Spa Director

The ASU Spa Management Certificate program prepares graduates for middle and senior level managers identified by the ISPA industry studies.

We will be selective about who is admitted into the certification program to ensure that our graduates have a greater likelihood of becoming leaders in the spa industry. Students holding a certificate in Spa Management will have an advantage for progressing to middle and senior management positions in the spa industry.

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