A Look Ahead
Diversity Highlights 2006 Spa Trends

The more than 12,000 spa locations in the United States generate $11.2 billion in revenues. Trends point toward continued growth in the non-invasive esthetic and medical areas if spa professionals understand the needs of their clients and offer them what they want: to reward themselves, decompress, treat a condition or look and feel younger.

Day spas continue to make up the largest segment of the spa industry, representing 72 percent of the 12,102 spa locations in the United States, according to the International SPA Association (ISPA). However, the hottest markets in the spa industry are medical spas and, to a lesser extent, resort/destination spas and wellness centers. As in years past, non-invasive anti-aging is a unifying theme among the developing subsectors of the spa industry.

According to data from the National Consumers League (NCL), nearly 90 million Americans currently use or have used products or procedures in an attempt to reduce visible signs of aging. Sales of anti-aging treatments are soaring, especially among baby boomers. However, consumers are not satisfied with over-the-counter products in this category; drugstore solutions were “worth it” for only 53 percent of women, NCL data shows. This dissatisfaction with packaged retail solutions has funneled more clients to their local spas for special services and treatments.

“All types of spas will benefit from enhanced, non-invasive, non-irritating spa treatments,” says Roger Ignon, president of Edge Systems Corp. “According to a study by Medical Insight, 60 million non-invasive aesthetic treatments per year will be performed by 2006. Around $650 million was spent last year on equipment needed to carry out these treatments, and the market is expected to grow as much as 25 percent annually over the next five years.”

The equipment market is one of the growth categories for spa operators. “We believe unique equipment is the key to a successful spa—equipment that you can’t order on eBay,” says Bari Mayberry, vice president of sales at Vibraderm, Inc. “The mircodermabrasion market in 2003 was a $2.3 billion market that is growing to $3.6 billion by the end of 2006. We believe the trend is not to sandblast the skin through exfoliation, but to use exfoliation as a tool to condition the skin to accept topicals the clinicians apply.”

The spate of new equipment has come just in time. According to the ISPA’s 2004 Spa Industry Study, “Industry executives indicated that there was a ‘revolution’ in cosmetic procedures, such that consumers can ‘look better’ without the need for cosmetic surgery. As baby boomers age, there is an increased interest in cellulite treatments, glycolics and skincare products.”

Equipment either can be used for stand-alone services—which justify a higher purchase price and premium charges for treatments—or for add-ons to existing services. “Another potentially profitable area is utilization of machines that combine complementary treatments in one machine, enabling spas to expand their service menu diversity in a cost-effective manner,” Ignon says.

Medical spas have been the fastest-growing sector of the industry, in terms of the number of new locations, for more than two years. It’s unlikely the growth of medical spas will slow anytime soon, as baby boomers comprise 28 percent of the U.S. population and 50 percent of the national economy, says medical-spa consultant Lisa Travis. Furthermore, the growth rate of professional U.S. skincare channels is projected to be highest in medical spas, at just over 20 percent, according to Feedback Research Services (courtesy of CBI Laboratories, Inc.).

Dermatology services follow with more than 15 percent growth in medical spas. “I see the ambiance and approach of a spa combined with the availability of medical-level esthetic treatments—both surgical and non-invasive— contributing to the success of medical spas,” Ignon says.

The marriage of spa and medicine constantly is in flux, as spas strive to find a balance between the warm, inviting atmosphere of a day spa and the structured, clinical feel of a medical center. These spas may find success by adding a personal touch, such as embroidered linens or plush robes. Neutral tones are also inviting, and splashes of bold color can add impact. But spa operators must remember that continuity of design is key. On the operations side, it’s the little things that make a difference in completing the transition from spa to medical spa. Following up with phone calls and letters, and calling clients by their first names adds to the welcoming, friendly nature of the facility.

Of course, a medical spa’s bread-and-butter is quality services and treatments. Non-invasive services have high appeal for clients, and the demand continues to grow because these services tend to be less expensive than invasive techniques such as surgery, and they often require less downtime. According to Travis, microdermabrasion and chemical peels, as well as lasers, IPLs, LEDs and radio-frequency-technology procedures continue to be popular. For added enhancement, mechanical lymphatic drainage frequently is incorporated into other procedures.

As for emerging invasive treatments, a new form of non-invasive lift for the neck and brows, called Contour ThreadLift™, has recently been approved by the U.S. Food and Drug Administration (FDA). This threading anti-aging treatment incorporates Contour Threads™ and usually takes less than an hour, according to Vincent C. Giampapa, M.D., F.A.C.S., chairman and chief science officer of Suracell. He notes patients are recovered within a few days, and potential complications are virtually non-existent as compared to surgical intervention.

Also finding their way onto spa menus are minimally invasive treatments such as Botox® injections and other cosmetic fillers, which continue to gain in popularity. Certain vein treatments and cellulite therapies are additional options for spas to consider.

“All types of spas will benefit from offering a minimum of invasive treatments that currently are offered in medical facilities,” says Melinda Clark, CEO of Luxuriant LLC. “I see classes being offered in the near future for clients to learn about plastic surgery options, teeth whitening and homecare treatments to perform between spa visits.”

The purpose of medical treatments in the spa is to attain and maintain desirable cosmetic results. Thus, series treatments are essential to the success of the medical spa, as they not only generate a steady flow of repeat business, but also keep clients happy with their looks over a prolonged period of time. Since the goal is to achieve a long-term commitment from clients, it is important that spa staff spend quality time in the treatment consulting process and manage the client’s expectations.

The medical treatment sector is growing so rapidly that it is dividing into disciplines such as dermatology, OB/GYN, plastic surgery and dentistry.

“We are seeing a significant increase in the number of medical professionals positioning to expand into the medicalspa market,” says Tom Clancy, vice president of marketing for Aesthetics Medical, Inc. “That interest should fuel growth in 2006 and beyond, after the present education curve is overcome.”

He advises spas considering these treatments to add a separate facility entrance and maintain separate areas for medical and traditional spa services.

Some medical spas are incorporating wellness into their treatments. They offer a more complete range of nutrition/ hydration to complete the body’s spa treatment from the inside, Clark explains. These institutions of holistic healing are expanding along with the aging population, although their growth is not as significant as that of medical spas.

“Baby boomers are concerned about their health and overall wellness of mind, spirit and body,” Ignon adds.

Mayberry agrees wellness centers will continue to gain popularity. “The holistic approach, versus strict medicine, will be a hit,” he says.

Eastern techniques often are used as the basis of treatments in wellness centers. Spas in other segments of the industry can boost profits by supplementing existing treatments and increasing the client’s overall experience with holistic add-on services.

“Healing therapies that enhance health and beauty from within—Ayurveda, Oriental medicine, acupuncture and hydrotherapy—will continue to grow in popularity as they become more mainstream,” Travis says.

Due to the turbulent state of the world, business at resort spas has suffered along with the leisure travel industry in recent years. However, spa experts agree, this sector is beginning to pick up again. As the travel industry revitalizes, vacationers are more apt to spend money on pampering themselves.

“Once travelers are at their destination, they are now more accustomed to the spa services being offered and therefore will often spend more travel dollars on spa services than in the past,” Clancy says.

The strengthening of the resort and destination sector is surfacing in industry statistics. According to ISPA data, resort and hotel spas remain strong players in the industry, despite currently running a distant second to day spas in terms of number of locations (14 percent). Mayberry believes that a big part of winning the leisure travel client back to resort and destination spas will be in offering equipment services and flexible, convenient hours.

Despite differences among U.S. spas, core services and client attention still spell financial success.

“There are several services that span all sectors and are staples of any spa, regardless of their specific denomination,” Clancy says. “Those include microdermabrasion, massage, facial, light therapy, photo-epilation (hair removal), photofacial and one or two quality skincare lines.”

A relaxing and luxurious environment is another mainstay of successful spas. However, the most successful spas will adopt a judicious approach to the development of their properties, according to Clancy.

“It is easy to get enamored by the glitz of the facility and significantly overspend on non-revenue-producing assets,” he adds. “Those who stay focused on cash flow and quality will be the most successful.” Mayberry agrees and adds that, as part of judicious funds, spas need to closely monitor product sales. “We see many spas carrying large inventories of their topicals and lotions,” he says. “They need to focus on what they sell and eliminate slower-selling inventory. Making revenue work harder for the business should be their 2006 goal.” Industry experts also predict many 2005 trends will continue into the coming year. For instance, Clark says one of the 2006 trends will be essentialoil oxygen therapy pumped throughout the spa environment. Eventually the systems will be offered to clients for home use. She further predicts the following categories will transcend trends and become a part of the staple spa offerings in 2006.

Not too long ago, a man needed to be dragged into a spa by his significant other. Once he got there, however, he often realized the benefits and enjoyment of a spa. More urban, professional men are adopting grooming regimens once viewed as feminine in their intensity and detail. This includes greater attention to hairstyle, hair appearance throughout the day, and look of facial skin, hands and nails.

“We are definitely seeing the most visible growth in the men’s sector,” Clark says. Men now make up 23 percent of all spa visits and purchases, according to the ISPA 2004 Spa Industry Study. The fact is men recognize that women appreciate men who are well-groomed.

“People are starting to understand that going to spas is not just a fluffy event in life—it’s more of a need,” says Barbara Schumann-Ortega, vice president and lead educator for Wilma Schumann. “I think a lot of times men don’t take time for certain aspects of personal care unless there’s a need for it. Now that they’re realizing the need—that there are benefits to having your skin and body taken care of—they’re taking advantage of that.”

On the service end, estheticians must recognize men have distinct beauty concerns—such as larger pores and skin irritation from daily facial shaving—and tailor techniques specifically for them. Staff also may need to engage and educate men, because they sometimes are hesitant to offer information about themselves.

“Men sort of act like they don’t care about spa care, but I find they do—if you know how to talk to them about it,” says Charles L. Mizelle, national director of corporate development for Sothys USA, Inc. “It’s very important that staff be trained on the differences of how men and women think—what motivates a man versus a woman. A staff’s language and how it communicates with men needs to be appropriate or it’s going to scare the guys off.”

On the retail side, products geared toward men must be straightforward and uncomplicated. They must be packaged for men, too, since men won’t be too thrilled about using a moisturizer designed for a woman.

“Men spend money all the time, if it’s something they feel is justified and they need,” Mizelle says. “Our industry needs to effectively communicate to men why they want certain products.”

He notes the spa industry could get a little smarter about presenting homecare products, packaging them together, keeping them simple and making them enticing to men.

The surge in male clientele at spas also has led to a shift in ambiance. Some spas even have separate areas for men and women. The men’s side may include a television and male-oriented reading material such as The Wall Street Journal, The New York Times, Sports Illustrated and local newspapers.

Spa guests have come to appreciate the less-is-more concept when it comes to spa design and decor. Interior design (at home and in retail) favors more minimalist, neutral color palettes— nothing vivid or bright. Soft, incandescent track lighting, minimally decorated walls and simple window treatments also are the trend. Spa decor extends to the amenities offered to guests, including fruit, teas, color therapy rooms, tranquility lounges, and a variety of lotions, loofahs, personal care and hair-care items.

Spa staff needs to be prepared to accommodate teenage guests, as more adolescents are under stress and are increasingly seeking refuge in a spa environment. The ISPA 2004 Consumer Trends Report states, “Teenagers are entering the spa world for cosmetic spa services. Among consumers we met, there is strong evidence that teenagers now are highly predisposed to go to day spas for services they once went exclusively to nail and beauty salons to receive.”

As we head into 2006, spa professionals need to evaluate their offerings and identify their clientele and the services best suited for them while assuring nice returns on their investments.

While trends point toward continued growth in the non-invasive aesthetic and medical areas, spa professionals constantly need to evaluate services that will keep them ahead of their competition.

Click here to purchase reprints