Challenges to Spa Profitability

 

Ease of entry into the spa industry

  • Increasing competition from the medical, hospitality, beauty, and fitness industries

 

  • Inherited beauty industry traditions

    • Extensive use of independent contractors (booth rental tradition)

 

  • Out of control compensation costs that create ever-increasing losses

 

  • Low margins;

    • Similar to restaurants, spas have traditionally low margins (2% to 7% return on investment is common, vary rarely higher than 15%)

 

  • Poor retailing skills and high commissions on retail

    • 10% commissions in the spa industry versus 2% to 3% commissions at a department store cosmetic counter

 

  • Escalating treatment costs

 

  • Missed opportunities of client retention

    • Lack of rebooking clients before they leave the spa

 

Suggested Articles

Attendees will have the opportunity to participate in seminars, workshops, and education sessions led by industry experts.

American Spa and Questex have announced the launch of Impact CBD Expo, a digital and live event platform serving the $22 billion CBD market.

This new technological partnership will offer multiple benefits to beauty and wellness businesses.