Ask anyone in the spa industry about last year, and you'll hear the same thing: TOUGH! From the large chains, to resorts, to small "indie" day spas, to spa vendors, everyone has felt the pinch. The good news is: 2004 looks to be a strong year for economic recovery, as measured by consumer, financial, and labor markets.
CONSUMER CONFIDENCE
Lackluster job and financial markets, war, and the ever-present threat of terrorism have taken a huge toll on consumer confidence, which is recovering after reaching an all time low in April, 2003. Consumer's anxiety over the economy explains why spas have been witnessing a trend towards infrequent visits from their "regulars" and less spending on spa retail.
ECONOMIC GROWTH
In the third quarter of 2003, economic growth as measured by gross domestic product exceeded 7%, with the July-to-September rate of business growth the best since 1984. Treasury Secretary John Snow declared recently, "America's economy is getting stronger every day. "The job picture is improving, factory activity is picking up, and home buying is brisk." This should spell more spa clients coming in the doors with more disposable income.
UNEMPLOYMENT
The unemployment rate has fallen to a six-month low, currently at a rate of 6% nationwide. The labor supply remains plentiful, however, as there are still many qualified people seeking employment. Companies have increased profits by extracting more from their current workforce rather than hiring new employees.
WAGES
According to human resource firms that track wages, the average white-collar worker can expect a wage increase of between 3% and 3.6% next year, roughly the same rise as this year. Although a modest gain, wages are expected to increase faster than inflation, which is expected to run at about 2%.
All these factors portend healthy growth for the spa industry in 2004; a vast improvement from 2003's grim outlook of. "This past year, we saw scenarios like a facial client forgoing their usual spa products and heading down to the drugstore to pick up $5 dollar products," says SpaTrade expert Peggy Wynne Borgman, Spa Director of Preston Wynne Spas. An increase in consumer confidence should mitigate this type of unfortunate situation.
Spas must continue to market the benefits of spa treatments to increase consumer confidence in the spa industry. Making the spa industry appealing to a larger core audience will allow the spa industry to take advantage of the upward turn on the economy and ensure a healthy future.
CONSUMER CONFIDENCE
Lackluster job and financial markets, war, and the ever-present threat of terrorism have taken a huge toll on consumer confidence, which is recovering after reaching an all time low in April, 2003. Consumer's anxiety over the economy explains why spas have been witnessing a trend towards infrequent visits from their "regulars" and less spending on spa retail.
ECONOMIC GROWTH
In the third quarter of 2003, economic growth as measured by gross domestic product exceeded 7%, with the July-to-September rate of business growth the best since 1984. Treasury Secretary John Snow declared recently, "America's economy is getting stronger every day. "The job picture is improving, factory activity is picking up, and home buying is brisk." This should spell more spa clients coming in the doors with more disposable income.
UNEMPLOYMENT
The unemployment rate has fallen to a six-month low, currently at a rate of 6% nationwide. The labor supply remains plentiful, however, as there are still many qualified people seeking employment. Companies have increased profits by extracting more from their current workforce rather than hiring new employees.
WAGES
According to human resource firms that track wages, the average white-collar worker can expect a wage increase of between 3% and 3.6% next year, roughly the same rise as this year. Although a modest gain, wages are expected to increase faster than inflation, which is expected to run at about 2%.
All these factors portend healthy growth for the spa industry in 2004; a vast improvement from 2003's grim outlook of. "This past year, we saw scenarios like a facial client forgoing their usual spa products and heading down to the drugstore to pick up $5 dollar products," says SpaTrade expert Peggy Wynne Borgman, Spa Director of Preston Wynne Spas. An increase in consumer confidence should mitigate this type of unfortunate situation.
Spas must continue to market the benefits of spa treatments to increase consumer confidence in the spa industry. Making the spa industry appealing to a larger core audience will allow the spa industry to take advantage of the upward turn on the economy and ensure a healthy future.