Industry • Best Practice
The Average Day Spa Revenue & How to Maximize Your Business' Potential
Feb.10,2022By Boulevard Staff
Learn where your spa stands amongst the competition, and how you can level up your business potential.
The spa industry is not new to the scene. People have been loving the idea of treating themselves to a day at the spa for years and will continue to do so for years to come. Going to the spa is one of the top ways to relax and de-stress from often-overwhelming daily life. And that is evidenced by the numbers when it comes to average day spa revenue.
According to studies, the spa industry was worth over $19 billion in 2019. We saw those numbers take a sharp turn down to $12.1 billion in 2020, but we have the COVID-19 pandemic to thank for that. As the world opens up again, the numbers are expected to climb back up and exceed that $19 billion mark soon.
So where does your spa stand when it comes to the average day spa revenue? How do you measure up to the competition? Knowing this can help you see how well you’re doing and set goals for the future of your business.
So, let’s find out.
What is the average day spa revenue?
To understand how your spa is doing in relation to others, we have to play the comparison game. Though this isn’t a game we always recommend playing, when it comes to business, it is key. (We know, we know — comparison is the thief of joy. But a failing spa business is an even bigger thief of joy.) Here are some important statistics for you to consider.
Average spa revenue per visit
The average revenue per visit for spas was $97.50 following the global coronavirus pandemic. This was down from the average $99.50 in 2019, but the ~2% decrease can be attributed to the pandemic we all got to know so well over the last two years (#thankyounext). If you don’t already know the average revenue per visit for your spa, take the time to gather this information.
Day spa annual revenue
The average annual revenue of a day spa is $803,000. ISPA commissioned PwC to conduct a study of the spa industry in 2018, and it remains the most comprehensive to date. While this number does not reflect post-pandemic dips, it still provides a valuable baseline from which to asses your business’s performance. Take into account that this figure includes data from nearly 22K spas of varying sizes, so if you’re running a small business your revenue may look quite different.
If these numbers sound familiar, then you’re right on track. If they’re above, then it’s time to treat yourself to a bad-a$$ boss gift. But if it’s below (and by “below” we mean more than just a dollar or two), then you need to reconsider how you’re driving revenue for your spa.
If your numbers skew below average, don’t freak out. There are things you can do to maximize your business’ potential and get that revenue up where it needs to be.
Spa revenue-generating ideas
So you found out that your spa’s revenue needs a little bit of love. Don’t worry — every spa owner has been here. It’s just part of the process. But we aren’t only here to give you a motivational speech. We are here to give you tips on actual moves you can make to change the trajectory of your spa profit margin.
Here are our top spa revenue-generating ideas.
1. Offer product or treatment add-ons
When clients come in for a treatment, you can offer add-on services to elevate their experience even more. Think things like a head massage during a facial (sounds great, right?). You can offer these add-ons at a lower price than they would cost as an individual service, to incentivize the clients to purchase them in addition to the service that initially brought them in.
Product add-ons are another great option for your spa. Offer a free or discounted item if the client buys a specific product.
2. Offer incentives to your employees
Nothing incentivizes someone quite like money does. So why don’t you spend a little bit of money on your employees to potentially make a lot more money from your clients?
You can set up monthly challenges to reward the highest-earning employee with cash or a gift card. For example, whichever employee gets the most clients to upgrade their service to include a head massage (what a great idea!) can earn a gift card or paid time off.
This not only will help increase your revenue but will also help to get your employees more involved in the spa, which is a win for everyone.
3. Run promotions in the off-times
While weekends are likely busy at your spa with people pouring in to relieve their stress and escape everyday life, weekdays are typically not as busy. Rather than sitting back and accepting that weekdays (especially Monday and Tuesday) are inevitably going to be low-revenue days, opt to run special promotions that will entice clients to come in before the weekend.
You can choose how big you want those promotions to be, but you may consider something as bold as offering 50% off services booked for Monday through Thursday. While it may feel like you’re losing money offering something at a 50% discount, you are actually making more money because you’re bringing more business in. People love a sale almost as much as they love cash, so use that to your advantage and offer deals when your spa gets slow.
4. Offer online booking
If you haven’t already joined the 21st century, now is the time to do so and offer your clients the ability to book their services online. Though people are spending more and more time on their phones, they are actually making fewer phone calls than ever (that feeling when the screentime notification hits — OUCH).
So, help your clients by making it easy for them to book services at your spa via their smartphones without having to make a single phone call.
You can easily do this with Boulevard’s self-booking feature, for example. Keep everything on-brand as you provide convenience to your clients in the form of allowing them to schedule appointments, purchase memberships, and store credit card information all from your website.
5. Create a loyalty program
One of the best ways to maximize your spa’s revenue is to focus on your loyal clients and reward them for their allegiance to your business by offering a loyalty program.
There are many different ways in which a loyalty program can help you do this:
Product. Set up your loyalty program so that for every purchase made, your clients earn points that they can then redeem to use for future purchases. Allow them to get these points by booking services, but also by purchasing products in your spa.
Add-ons. As we mentioned above, add-ons are a must for your spa’s revenue, and they become increasingly important with a loyalty program. By offering extra points for add-ons, you are making the client’s experience even better, and rewarding them with a bonus.
Booking. Repeat visits don’t come nearly as frequently for a spa as they do for other beauty businesses. You may want to consider offering points to your loyal customers who book their next appointment before leaving the spa. This will increase your booking rates and also give your clients an incentive.
Tiers. You may want to create tiers in your loyalty program that give clients access to even more exclusive deals and rewards. One great example of this is Sephora. This company has multiple levels in their rewards program, and the higher you are in the program, the bigger the discount you get and the earlier the access to sales and other events.
Though a loyalty program may sound like a big headache, it can be a piece of cake when you have the right software like the Loyalty Program app from Boulevard. This app helps you increase client retention, which means higher revenue. It does this by keeping all of the client information in one place, and by making it easy to track every point earned on the client profile, regardless of which spa location they visited. In addition to that, this app shows you the deets on how your program is performing and if there are any liabilities that you may need to pivot on.
Your spa may not be leading the pack when it comes to the average day spa revenue — yet. With a bit of thoughtful planning and willingness to adapt, however, your numbers will soon be on the rise.
Boulevard was built to help your business achieve profitability at scale without losing an inch of sanity. See for yourself! Get a free demo today.