Spa Business issue 3 2021

Page 54


Total Impact PwC’s Colin McIlheney and Russell Donaldson home in on the economic fallout of the pandemic in the US spa industry but also map out a road to recovery


Colin McIlheney and Russell Donaldson


he spa industry is, by its very nature, a close contact industry built around the in-person experience. So it should come as no surprise that a global pandemic, characterised by social distancing and stayat-home orders, brought a year of turmoil to a sector that had seen sustained growth in recent years. New data published in the International Spa Association (ISPA)’s 2021 US Spa Industry Study offers a nationwide overview of the economic fallout of the pandemic. With the economy now reopening and strengthening, it also crucially examines what should be in the playbook for the industry’s road to recovery ahead. 54 issue 3 2021

The findings are based on a survey of spa operators with more than 2,000 locations in early 2021. The study gathered valuable business insights on financial performance, employment, and growth, in addition to ownership structures, product and service offerings in the 12 preceding months, as well as identifying emerging trends.

Openings and closings The COVID-19 crisis severely restricted spas’ operational capacity through 2020, with widespread temporary closures and most facilities completely shut down from March to May as coronavirus raged. The stop-start nature of the restrictions made planning incredibly difficult. But by December, as the economy showed clear signs of reopening, the

majority of US spas (79 per cent) were also open again. By the end of a turbulent year, only 6 per cent of spas were estimated to have remained closed and these were still deemed viable in the study in anticipation of reopening at some point in 2021.

Five key statistics The US spa industry’s pre-pandemic position in 2019 had seen each of the industry’s so-called Big 5 statistics hit record high levels. Unsurprisingly, all five metrics fell in 2020 as a result of COVID-19 (see Spa revenues took the biggest hit, falling US$7bn (€5.9bn, £5bn) to US$12.1bn (€10.2bn, £8.7bn) – a drop of 36 per cent. With travel at times virtually grinding to a halt, the effect of the pandemic was most acutely