The International SPA Association (ISPA) released its preliminary 2007 figures on the United States spa industry in August of 2007. A mentioned in other post, the preliminary findings of the 2007 Spa Industry Study by ISPA say that the U.S. spa industry is maturing. The number of spas is growing, but overall revenues fell 3.4% from $9.7 billion in 2005 to $9.4 billion in 2006.

There are several points here to comment.

1. Spa industry is like any other industry.

As any other industry, some years it grows while at other years revenues fall. Industries are not isolated and there are changing environments for every industrial or service sector, and we must find reasons for growth or fall there. Just look the aviation industry after 9/11 or the construction sector or any other industrial or service sector. There are some years where revenues fall in comparison to previous years.

Therefore, it is not to worry a 3.4% less revenues than previous year, even when more day spas were offering services.

2. Some sub sectors decline while others growth

Annual revenues for Day Spas were $5.294 billion in 2006, down from $6.794 billion in 2005. But the shift shows other sub sectors are growing. Resort and Hotel Spas revenues were $2.499 billion in 2006, up from $2.026 billion in 2005. Medical Spas alone has more than a 100% growing because total revenues in 2006 were $1,063 billion, up from $469 million in 2005. What happens there? Something wrong? No, It is absolutely normal as in any other industry. Some sub sectors growth, other decline. Most probably it is due to changes in consumer demand.

3. ISPA definitions do not include the industry as a whole.

The ISPA figures are updated, objective, reliable and from a serious source. But it does not consider the spa industry as a whole. For instance, they do not include spa development, spa construction, equipment, supplies, the spa products industry, spa marketing, real estate for spas, among other concepts. A growing sector is the Spa LifeStyle at new real estate developments and it is not included into the calculations for the whole industry.

4. A shift in consumer demand

There were 110 million spa visits in 2006, a 16% decline from the 131 million spa visits in 2005. It was almost as low as the levels seen in 2003. One possible explanation given to this situation is that people may be getting multiple services at one visit to the same spa. Other explanations is simply that consumers are needing new services. Shifts in consumer demand are very common in many industries, and perhaps some changes are needed here. It is probably that consumers look for new ways of indulgence. That is what we had in mind when developed all our Aloe-Spa services. That is, to offer spa-goers with a new way to offer traditional treatments or services. In fact, we are not just offering a body wrap the way it always was done. We are offering a new way to indulge the body and soul through a new service. When we offer an aloe bath, we are offering not a common bath but a bath with dozens of benefits for the body. It is more than a single bath. It is a new service. It is a new concept. A new way to offer indulgence to the spa-goer.

In conclusion, the fall in 3.4% for the industry is not bad news at all. We have to remember than as in any other industry we may have maturity at some sectors and an emergent situation in other sub sectors.

Also, the figures must to show to the entire industry than consumers are looking for new options, new services.

Sustainability, green concepts, new services are to be created and offered.

We have leaded the way. We are here with a full range of new treatments to indulge the consumers. Because they are looking for more, and for better pampering experiences.

Daniel Avaro

Manager,

Aloetrade America