How profitable is owning a spa?

According to Cristina Ampil, hospitality and leisure analyst at PricewaterhouseCoopers, the average profit margin for the four types of spas, club spas, day spas, resort-hotel spas and other spas is 17.3 percent, and the highest profits come from day spas. A luxury spa should have a profit margin of 10 to 15 percent, based on your operating expenses, payroll rate, and overall expenses. Today, many day spas operate with compensation rates of 50 percent or more, resulting in minimal or no profit margins. Does your spa leave money on the table and lose revenue opportunities? Probably.

Nobody is perfect, and it's unlikely that anyone is capturing every available dollar. However, you can capture more of them and increase spa profits. Trent Munday of Mandara Spa, whose focus is on hotel spas, says: “The biggest immediate missed opportunity I see in most hotel spas today is the potential to leverage their current customers. Every satisfied customer is an evangelist for their business.

They're the best people to promote your spa, and they're probably willing to do it. Your job is to give them simple ways to do it. In my 15 years of consulting with spa and beauty salon startups, these are the top five things that surprise most new salon or spa owners. Owners of high-end salons that attract celebrity customers are more likely to be at the top of the estimated range.

The spa franchise industry remains an attractive option due to its high profit margins and continued growth. It's more likely to be the highest limit of the estimated range for salon owners who attract celebrity customers. The average profit margin for the four types of spas, club spas, day spas, resort and hotel spas and other spas is 17.5%, according to Cristina Ampil, hospitality and leisure analyst at PricewaterhouseCoopers. Call it “Open-Book Management” or anything else you want, but opening the curtain on the financial reality of building a successful and profitable business is the secret to employee engagement.

So much so, that it's not unusual to hear service providers say, “I don't care about numbers, I just want to do my job, when owners and managers try to share financial and critical numbers with staff. Three-quarters of respondents say they are excited to try these services right now, and that interest will increase as the services become more widely known. While it's undeniable that the medical spa industry is massive and only going to grow, the results show that Botox and fillers are not only the most popular treatments but also the most cost-effective.

Janis Veino
Janis Veino

Hipster-friendly music enthusiast. Award-winning music fanatic. Professional zombie expert. Extreme pizza nerd. Freelance bacon enthusiast.