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

It's important to ensure the proper sanitation and cleaning is done to help prevent the spreading of this illness and any other viruses.

The F1000 Days Spa and Resort Training Program will prepare spa professionals to support couples before, during, and after pregnancy.

The celebrity-favorite spa recently hired Greg Geurin as its new general manager and is working on new enhancements for 2020.