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Getting personnel
A deeper analysis of ISPA’s latest study shows that despite record KPIs, the US spa industry continues to face workforce shortages, as Eloise Corner from PricewaterhouseCoopers Research reports
Last year, the US economy continued to recover from the COVID-19 pandemic, however, simultaneously, the rate of inflation in consumer prices accelerated dramatically. From one crisis to the next, the spa industry has had a dynamic couple of years and has been able to showcase its resilience and adaptability. New research based on data from 2,829 spas in the US shows clear evidence of a swift bounceback in key metrics, but the persistent challenge of staffing continues.
Increase in spending
Throughout 2022 the cost of living crisis continued to affect US consumers, leading to less disposable income. Many would have predicted that this would result in a decrease in demand for activities such as spa-going. Yet the 2023 US Spa Industry Study compiled by the country’s International Spa Association (ISPA) and undertaken by PwC Research, shows that industry revenues soared to a landmark US$20.1 billion (€18.3 billion, £15.7 billion), an 11 per cent increase from 2021.
Spa visits recovered by 4 per cent to 181 million, while this is still almost 20 million short of 2019’s record high, it’s encouraging that visits are climbing. To meet this demand, 22 per cent of spas are increasing their weekly hours of operation. This figure increased to 32 per cent when looking at resort/hotel spas, which hoped to increase spa availability to provide a much-improved guest stay.
Bringing these two metrics together sees a sharp jump in the ever-important revenue-per-visit metric which, at US$111.50 (€101, £87), now sits at an all-time high. Put simply, those visiting spas in 2022 were spending more. Fifty-four per cent of spas confirmed this when comparing spring (March-May) 2023 figures with the same period a year ago. This increase in spending is no doubt linked to the rise in price per service which now stands at an estimated US$116 (€105, £91), compared to US$108 (€98, £84) last year (see Graph 1). The price for body treatments has gone up the most – from US$124 (€113, £97) in 2021 to US$152 (€138, £119) in 2022 – amounting to a 22 per cent hike.
The staffing challenge
For the spa industry, where personal contact is core to its purpose, a highly infectious virus sweeping its way across the world could easily rank among its worst nightmares. Since then, it’s rebounded strongly. Despite the difficult environment, openings and closures appear to have been steady and the number of locations is above 21,750, an increase of 1.3 per cent compared to last year. Nonetheless, that’s still 3 per cent below the pre-pandemic level (22,430 locations in 2019), suggesting further scope for growth.
There’s currently an average of 16.5 workers per spa establishment, bringing the total number of employees in the overall industry to 360,700.
While this is a marginal increase compared to last year, staffing is an area that plagues the spa industry as a whole and is holding it back from reaching its full potential, with 67 per cent of spas stating they have openings that they’re actively trying to fill.
Almost a third (31 per cent) of spas had decreased their number of service provider/shifts per day and when focusing on resort/hotel spas, this figure increased to 46 per cent. The 2023 US Spa Industry Study data suggests the main reasons for this are staffing shortages and staff opting for a better work/life balance. As a reaction to these low levels of staff, 30 per cent of spas hide or adjust services available for booking based on availability.
Operators adopted a range of methods to reduce recruitment difficulties, (Graph 2). The most popular being financial incentives, such as higher wages (61 per cent) and/or a signing-on bonus (38 per cent), along with flexible work schedules (66 per cent).
To enhance the supply of skills, some spas have offered ‘carrots’, such as compensation for training and continuing education (42 per cent) and education reimbursement programmes (24 per cent).
Looking ahead
With consumers increasingly focused on wellness and the growing demand for experiences over possessions, spas can only benefit. However, the upturn in demand continues to shine a light on the industry’s staffing challenges. An exciting, prosperous, community-driven sector, spa can offer long, successful, enjoyable careers and operators must continue their efforts to counteract recruitment challenges.
Reflecting on this year, it’s fair to say the industry has returned to a strong position and emerged with real momentum to fuel its growth.
Eloise Corner, PricewaterhouseCoopers Research
