TWO DECADES OF DATA:
The Story of the U.S. Spa Industry Study
by Jamison Stoike
It wasn’t too long ago—just twenty years in fact—that spa directors seemed to spend as much time explaining what spa was as they spent actually running a spa. At the time, the internet was in its infancy. Boomers were the core of the workforce; now, they’re primarily retirees. And there was no real understanding of how extensive and profitable the spa “industry” was.
Things are different now. Millennials, the oldest of which couldn’t yet vote in 1999, are now a typical spa’s core audience. Digital booking—digital everything, really—is the name of the game, with spas offering increasingly seamless ways to experience the world of spa. CBD, the biggest product trend of today, wasn’t even on the industry’s radar in 1999.
The spa industry has transformed over the past two decades. Through it all, there has been one consistent source tracking all the changes: the ISPA U.S. Spa Industry Study.
The first ISPA U.S. Industry Study set out to answer a question that occupied the minds of many spa leaders in the late 1990s: just how big was the spa industry?
At the time, no one really knew. Everyone agreed that the spa industry was growing, but were unsure by how much. “We had been doing smaller studies with select partners, such as Cornell,” says ISPA President Lynne McNees, “but we really wanted to establish the economic scope of the industry.” Doing so would help prove that the spa industry was an economic force to be taken seriously.
McNees and then-ISPA Chairman Jane Segerberg, as well as other ISPA leaders, knew that the key to producing a serious, well-respected
study was choosing a serious, well-respected research partner who would elevate the integrity of the research: PricewaterhouseCoopers (PwC).
“It was in 1999,” recalls Colin McIlheney, global director of research for PwC, “and the original contact was in New York with PwC’s global
hospitality and leisure leader at the time, Bjorn Hansen.” Although Hansen took the initial lead, McIlheney has been involved from the start and has presented on the Study’s results at every ISPA Conference & Expo since the initial study. “There was very little information on key metrics in the industry,” he adds, “and ISPA knew that PwC could bring knowledge of the research techniques required.”
These rigorous techniques, however, meant that the study would have to be U.S.-only. To conduct a study of the same rigor and methodological validity around the world was functionally impossible at the time, says McIlheney. “Ideally we would expand the global footprint. However, two factors encourage a pragmatic approach. First is the cost. Second is the lack in many territories of easily obtainable and robust data for compiling the key metrics, such as total revenue and visitor numbers.”
In fact, collecting those key metrics in the U.S. in 1999 led directly to the creation of the Uniform System of Financial Reporting for Spas (USFRS). The USFRS helped standardize spas’ accounting practices so that revenue and profit numbers would be reliable, thereby enhancing the integrity of the Industry Study’s data.
The study’s well-known ‘Big Five’ statistics were determined in close consultation with ISPA members; PwC held several focus groups at the time to put parameters around what the most foundational metrics should be. Choosing such fundamental metrics allowed ISPA and the spa industry to “watch the industry grow over time,” says McNees. Once the scope of the Study was established, PwC began collecting data the oldfashioned way: via telephone.
“The Other Side of the Coin”
The initial ISPA U.S. Spa Industry Study was presented in 2000, and within a few years it had become the “defining report for the industry,” says McIlheney. However, both ISPA and McIlheney felt there was still a need to cover “the other side of the coin”: spagoers and consumers.
By 2010, ISPA members were clamoring for more data on who went to spas and why they went, as well as why certain consumers weren’t spa-goers—such information was critical to spa’s success during the height of the Great Recession. That year, ISPA again connected with PwC to begin the Consumer Snapshot Initiative, a new research program whose goal was to provide insight into the minds of worldwide consumers. The first volume of the Consumer Snapshot was released in early 2011.
“Designing a study that a man or woman in the street could fill in requires quite different techniques to designing a survey for spa managers and directors,” notes McIlheney, continuing, “certainly no one would have guessed that within a decade we would have nine volumes surveying over 12,000 people in the U.S. and beyond.”
While the ISPA U.S. Spa Industry Study is designed to provide consistent, trackable metrics across many years, each volume of the Consumer Snapshot Initiative captures a different angle of the consumer experience. Past volumes have studied spa-goers vs. non-spa-goers, the preferences and habits of male spa-goers, social media usage and millennials, among other topics. Each volume surveys a representative sample of the population—including both spa-goers and non-spa-goers, Americans and non-Americans, depending on the nature of that year’s Snapshot.
“That first Snapshot showed us how many men were going,” recalls McNees. Indeed, this was the most surprising finding of the first volume: although a greater percentage of spagoers were women (53.8 percent versus 46.2 percent of men), male spagoers more frequently visited five or more times over the past 12 months (59 percent of male spa-goers versus 41 percent of female spa-goers).
“There were a lot of assumptions and anecdotes from members about that, but we wanted to quantify it,” McNees adds. In essence, this has become the raison d’etre of the Consumer Snapshot Initiative: to apply analytical rigor to the assumptions that spa leaders make about their guests.
For two decades now, the ISPA U.S. Spa Industry Study has charted the growth of the industry, although this easily might not have been the case: the ISPA U.S. Spa Industry Study was not originally envisioned as a yearly endeavor.
“We initially viewed it as something we would revisit every few years,” says Lynne McNees. The enthusiastic response of ISPA members to the original report, however, pushed ISPA to secure the necessary funding to conduct the Study annually. “The ISPA Foundation’s fundraising efforts,” McNees adds, “have been able to maintain it consistently. There were a few early years that we thought we may have to skip, but that would have been very detrimental to the history. We’ve been very fortunate to be able to continue it and see the growth.”
Indeed, that growth has been nearly unbroken since 1999. The only year in which the ‘Big Five’ statistics declined was, as one might guess, 2009. During that initial wave of the Great Recession, revenue declined by 4.3 percent and spa visits tumbled by 10.2 percent. The past two years’ record-setting numbers, however, are a testament to the resiliency of the industry and the increasingly farreaching
impact of the spa and wellness industries.
Witnessing the expanding influence of spa has been the best part of this ongoing twenty-year project, says McIlheney: “It’s been amazing to see the growth in spagoing over the years among the general population.”
“Research is really what put us on the map,” says McNees, and ISPA has no intention of diverting from consistently delivering high-quality, independent research. As the spa industry undergoes radical changes driven by emerging technologies and innovative products, the ISPA U.S. Spa Industry Study will continue to track every transformation.
After all, you can’t know where you are—or where to go—without knowing where you’ve been.
BEYOND THE 'BIG FIVE'
The ‘Big Five’ metrics—total revenue, spa visits, spa locations, revenue per visit and number of employees—have become the calling card of the ISPA U.S. Industry Study, but they’re most relevant to those outside the spa industry. For spa operators, looking beyond the ‘Big Five’ numbers in each year’s Study will reveal data with obvious practical applications, such as yearover- year changes in average prices by treatment type, growth in alternative treatments and services, or what an average spa’s retail product mix looks like.
THE STUDY GOES GLOBAL?
While conducting a more global study has proved impractical in the past, ISPA never says never. ISPA leadership regularly reevaluates the idea, and a more “incremental approach” to a worldwide industry study is a possibility, according to Colin McIlheney.