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Despite a slowdown across the beauty and wellness industry in 2023, with overall revenue up just 5%, spa revenue growth surpassed the industry average.
Data from the spa edition of the 2024 Beauty and Wellness Benchmark Report from Zenoti - the only definitive industry benchmark report - showed 6% revenue growth for non-membership spas in 2023, while membership-based spas experienced an 8% increase.
These statistics alone indicate the importance of membership models for spas aiming for revenue growth — one of four key trends every spa owner should be paying attention to in 2024.
Based on the exclusive insights and in-depth analysis from the spa edition of the 2024 Beauty and Wellness Benchmark Report – available for download now - we explore how membership-focused spas are faring against non-membership spas, and the strategies that are driving growth for the spa industry.
Data shows that both membership-based (more than 30% of revenue from memberships) and non-membership spas have seen notable increases in 2023, proving the model's growing appeal.
With the increasing popularity of wellness and self-care, consumers are looking for long-term options that offer consistent benefits rather than one-time treatments. Memberships provide a sense of exclusivity and convenience for customers while generating steady revenue for spas. In fact, data reveals that the average membership spa earns three times the revenue of the average non-membership spa.
Membership-based spas saw a 9% growth in membership collections in 2023 — a sizable increase considering membership revenue already makes up 58% of all membership spa collections.
Non-membership spas experienced a 26% increase in membership revenue in 2023, hinting at a shift in business models. Although memberships currently account for only about 2% of overall revenue for these spas, the significant growth suggests a growing reliance on memberships.
Online gift card sales was the fastest-growing 2023 new revenue channel across the beauty and wellness industry (up 16%), with spas leading the way in transitioning to online sales.
While the sales growth of spa gift cards was a modest 2.5% in 2023, online gift card revenue saw an impressive leap, surpassing growth in any other beauty and wellness business category.
Membership-based spas experienced a 33% increase in online gift card revenue, while non-membership spas weren't far behind, with an increase of 17%.
This dramatic rise in online gift card sales highlights spa clients’ clear preference for the convenience and accessibility of digital options. It also underscores the growing need for spas to innovate and adapt to an increasingly digital marketplace.
As data shows that 25% of all beauty and wellness gift cards are redeemed by first-time customers, gift cards are a great low-cost tool for spas to acquire new lifetime clients.
Reserve with Google has emerged as a formidable tool for spas to attract new guests. Data from the 2024 Beauty and Wellness Benchmark Report shows an impressive one in five Google bookings for both membership and non-membership spas are from new clients, highlighting the impact of this service on customer acquisition.
The potential value of these new clients is equally significant, with revenue from these Google bookings making up a whopping 40% of all revenue at membership spas, surpassing the overall industry average of 19%.
The move towards integrated, convenient booking systems delivers on-the-spot convenience to clients, providing an enticing draw for potential clients seeking your spa services.
After finding their spa of choice via Google search, guests can book appointments directly from Google search results and Google Maps. Not only does this trend increase your digital footprint, it also effortlessly converts potential clients to confirmed appointments.
If you haven’t already, leverage Reserve with Google's power to reach out to new market segments, enhance your visibility, and boost your potential revenue.
Related reading: Mastering Google: 4 actions your business must take
Uncover powerful strategies and more than 30 actionable tips to set your spa up for sustainable growth in 2024 and beyond.
In 2023, package sales revenue at membership spas shot up by an impressive 85%, indicating that this is a growth trend worth paying attention to — especially as retail product sales dropped slightly (down 1%).
Although packages currently represent a small fraction of total spa revenue for membership-focused spas, this 85% increase in 2023 equates to over $20k in sales in each top-performing spa location.
Top-earning spas are seeing the benefits of bundling services and products to increase revenue. Packaging incorporates a mix of services and products grouped together, offering clients more than just a single spa experience.
A package can be a curated combination of services, such as a relaxing massage coupled with a rejuvenating facial or even a series of regular visits, available at a package rate. No matter how traditional or innovative your spa package may be, this proven strategy can enhance the customer experience while boosting your bottom line.
Spas, especially those focusing on membership models, showcased resilience and adaptability in the face of an overall beauty and wellness industry slowdown. The rise of online gift card sales, the importance of Reserve with Google for customer acquisition, the surge in package sales, and the overall trend towards digital innovation underline the need for spas to evolve with the times.
By embracing the trends and strategies highlighted in the 2024 Beauty and Wellness Benchmark Report: Spa Edition, spa owners can position their businesses for success. The report defines three benchmark levels - top earners, high achievers, and the industry average - across nine key metrics.
As the leader in beauty and wellness software - with 13 years and nearly 30,000 businesses - only Zenoti has the expertise and scale to develop the annual benchmark report and share it with the industry.
Download your free copy today to see how your spa compares to others in annual revenue, per-ticket value, upsell revenue, and more.
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