Spa Industry Hit Hard by Pandemic but Recovery Is in Sight

The spa industry saw a dramatic revenue decline in 2020 as a result of the pandemic’s effects, but leaders of the International SPA Association (ISPA) are upbeat about recovery as wellness becomes even more important to travelers, according to a virtual presentation of the 2021 ISPA U.S. Spa Industry Study conducted by PricewaterhouseCoopers (PwC).

Russell Donaldson, manager of research at PwC, said one important message is not to compare this crisis with the Great Recession of 2009-10 when there was a similar drop in business. At that time, he said, the problem was a demand issue; now it is a supply issue as consumers aim to make up for lost time in visiting spas.

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He said that when ISPA has its next in-person meeting in Las Vegas in 2022, “we will hopefully be seeing a strong recovery based on a heightened interest in wellness driven in part by the pandemic.”

Changes driven by the pandemic might or might not be permanent, said Donaldson. Operational adjustments like different kinds of menus; curbside or outdoor treatments; and “touchless” treatments may or may not withstand the test of time depending on whether they were a direct result of the pandemic or simply accelerated trends already in place.

While the industry is not out of the woods yet, said Colin McIlheny, director of global research for PwC, “what is clear is that there is widespread pent-up demand to get back to wellness and spas as long as they open safely.”

While there is strong evidence of a recovery in U.S. domestic travel, said McIlheny, the restoration of international travel will be important in many key spa destinations like California. He noted that the news about the U.K. opening to U.S. travelers indicated the possibility of some form of travel corridor between the two countries.

McIlheny said that spas would have to decide whether they would require clients to be vaccinated or tested. As staffs want to be safe as well, he said, “this is a whole frontier that will have to be addressed as time goes forward.”

Like the rest of the hospitality industry, said Donaldson, there is a critical staffing issue as more than half of spas surveyed are trying to fill positions. He said that the impact of the pandemic depended on the type of spa, with day spas getting hit less hard than resort and hotel spas because of the drop in air travel and other issues. In fact, the number of spa locations fell by only four percent while revenue per spa visit fell just two dollars to $97.50.

McIlheny said this is now an opportunity to review how the industry works. He said it might be time to diversify its staffing by looking in other communities and demographics that have not traditionally been a source of personnel.

The PwC study has been conducted since 1999, said McIlheny, providing an institutional memory of the industry. That enables researchers to understand what is happening over a period of time.