SaaS for Spa Management Market Size, Share & COVID-19 Impact Analysis, By Function (Booking & Scheduling, Inventory Management, Employee Management, Analytics & Reporting, and Others), By End-use (Small & Individual Professionals and Large Businesses), and Regional Forecast, 2023-2030

The global SaaS for spa management market size was valued at USD 208.6 million in 2022. The market is projected to grow from USD 229.6 million in 2023 to USD 496.6 million by 2030, exhibiting a CAGR of 11.7% during the forecast period.

When per capita disposable income increases, more money gets collected in the bank thereby boosting the affordability of the customer on discretionary services, such as massages and spas. Thus, creating opportunities for software that enhance customer experience and streamline operations.

According to a survey by the International SPA Association (ISPA), around 70% of spas give the option of online booking to customers. In addition, 83% of respondents stated that they use social media for sharing discounts, gift cards, or promotions with their target customers. Such trends prompt the adoption of SaaS solutions by spa owners.

According to the Global Wellness Institute and IMF, the global wellness economy is anticipated to grow at a rate of 9.9%, whereas spas are expected to grow at a rate of 17.2% between 2020 and 2025. This, in turn, is expected to propel the demand for spa management software.  The spa industry is growing rapidly worldwide with a rising number of the working class and per capita disposable income. The industry's growth is significantly influenced by trends in per capita disposable income.

COVID-19 IMPACT

Adoption of Management Solutions for Better Customer Engagement Proliferated the Market Growth

The spread of COVID-19 had a severe impact on the global economy as lockdown measures were implemented to control the spread of the virus. The spa industry also experienced significant challenges on account of stringent lockdowns, social distancing measures, and travel restrictions, leading to a plunge in customer visits, resulting in revenue loss and temporary business closure. In this regard, several spas and salons introduced virtual wellness sessions to maintain customer engagement. However, the overall impact of the pandemic on the spa industry was severe. Despite this, the adoption of SaaS for spa management helped spa businesses personalize their services and implement enhanced systems to better connect and communicate with their customers.

The long-term impacts of the outbreak on the spa industry would likely include a combination of in-person and virtual experiences of therapies, focusing on flexibility and well-being of the customers.

Thus, the COVID-19 pandemic impact had a positive impact on SaaS for spa management market growth.

LATEST TRENDS

Growing Popularity of Medical Spa and Wellness Tourism to Drive the Market Growth

Medical spas are becoming increasingly popular worldwide, with treatments and programs that benefit health more than conventional spa treatments. The aging population and increasing demand  aesthetics treatment, is driving the demand for medical spas. Medical spa owners are increasingly adopting technology such as the med spa software platform to enhance their efficiency. This software eases various administrative activities such as appointment scheduling, storing patient information, and inventory management. Automating these activities reduces the burden on healthcare workers, making them more efficient and able to attend to more patients.

The software also decreases the possibility of records being lost or damaged, the need to manually enter data, and the chances of making mistakes. Owing to all these benefits, more and more med spas are adopting cloud-based business management software.

Moreover, wellness tourism is a quite new niche segment within the global travel and tourism sector. However, it recorded significant growth among tourists in the last few years on account of the rising popularity of health-enhancement activities among the population. This is boosting the market growth.

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DRIVING FACTORS

Increasing Adoption of Digital Technologies in the Spa Industry for Managing Operations to Fuel the Market Growth

The rapid changes in the business environment are making it challenging for the spa industry to maintain long-term sales growth and profitability. This change is majorly driven by digital technology coupled with social and marketplace shifts. This shift is expected to prompt spa owners and managers to adopt digital technologies such as spa management software to streamline their operations and improve the overall spa experience. In addition, the tech-savviness of the consumer is increasing rapidly worldwide. Thus, to target this tech-savvy consumer, spas are undergoing digital transformation and ramping up their platforms. Moreover, mobile applications are helping to reach the masses and digital marketing is becoming more and more crucial.

Cloud-based spa management software acts as an important tool for spa owners to track sales, manage staff and inventory, manage appointment booking, cancel bookings, maintain client files and information, report & analytics, and others. In addition to these factors, the COVID-19 outbreak also accelerated digital transformation across various industries, including the wellness industry. During this period, spa facilities increasingly adopted new technological innovations to spur business and overcome slowdowns caused by the pandemic.

The digitization of spa operations is significantly improving efficiency by reducing human errors and enhancing customer engagement. This technological integration is anticipated to become essential for spas to remain competitive in a digitally-driven marketplace. In this regard, several leading companies are launching more advanced features to their spa management platforms for better consumer experience, driving market growth. For instance,

• In August 2022, Fresha.com SV Ltd, a multipurpose platform for salons and spas to manage their complete operations, launched six new automated text notifications for its platform users. These automated notifications are no-shows, say thank you, canceled appointments, rescheduled appointments, appointment reminders, and appointment confirmations.

RESTRAINING FACTORS

Data Security Concerns Coupled with Lack of Awareness in Developing Economies May Hamper the Market Growth

Cloud computing is among the most valuable solutions for the wellness industry. However, data security is one of the major concerns in the SaaS spa management software market. Cloud-based solutions store sensitive customer and confidential business data in the cloud, which increases the risk of data breaches, unauthorized access, cyberattacks, data loss/leakage, and others. In the U.S., there are various federal and state data protection laws and regulations that affect the use of cloud computing applications. For example, The Health Insurance Portability and Accountability Act (HIPPA) is a federal law that safeguards confidential patient health information from getting disclosed without the patient’s permission or knowledge. Hence, achieving and demonstrating regulatory compliance can be more difficult, hindering market growth.

According to the “State of Cloud Security 2022” report by Snyk Limited, in 2021, around 80% of organizations experienced serious cloud security incidents, such as data leaks and data breaches. Data portability and ownership can also become significant concerns if spa owners decide to switch to a different software provider.

Moreover, lack of awareness about spas and lack of government support in developing countries is another major factor that is expected to hamper the market growth.

Thus, the aforementioned factors may hamper the market growth during the forecast period.

SEGMENTATION

By Function Analysis

Adoption of SaaS for Spa Management for Analytics & Reporting to Boost the Market Growth

On the basis of function, the market is segmented into booking & scheduling, inventory management, employee management, analytics & reporting, and others.

The analytics & reporting segment is anticipated to witness a high CAGR during the forecast period. Data analysis helps spa owners predict future events and make decisions about treatment menus, hours, product offerings, scheduling, and revenue management. This factor is proliferating the segment expansion.

The booking & scheduling segment generated maximum share in 2022. The booking system helps the Spa’s to target their customers quickly and spa companies have seen 15% increase in sales leads due to booking and scheduling function. Booking system makes it convenient for customer to schedule appointments and this helps spa companies to enhance the customer experience.

However, the demand for SaaS solutions for spa management is increasing for better customer experience.

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By End-use Analysis

Large Businesses are Widely Adopting SaaS for Spa Management Solution

Based on end-use, the market is segmented into small & individual professionals and large businesses.

The large businesses segment dominated the market in 2022 and is estimated to register a high CAGR during the forecast period. Large businesses need to keep track of marketing campaigns, inventory, employee and client schedules, and everything that is needed for their business growth and enhancing the customer experience, which is driving the segment growth. Moreover, factors such as instant data accessibility and recovery features, reduced IT costs, and increased flexibility are increasing the adoption of SaaS solutions among large businesses.

Moreover, large businesses are largely adopting SaaS for spa management as it helps business owners automate various aspects of daily operations and gain full control over them. The product also helps minimize downtime and productivity loss and continue business in case of a crisis.

REGIONAL INSIGHTS

On the basis of region, the market has been analyzed across North America, Europe, South America, the Middle East & Africa, and the Asia Pacific.

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The North America market accounted for the largest share in 2022. The lifestyle changes of the urban population and increasing health concerns are driving the growth of the spa market, which is boosting the sales of SaaS for spa management in the region. The adoption of advanced technologies and techniques used in spas are further expected to boost the regional growth.  

The Asia Pacific region is the fastest growing region and is estimated to register highest CAGR during the forecast period as many small and medium-sized businesses in the region are implementing SaaS-based solutions to improve productivity and reduce business complexity. In addition, spa services, which were primarily associated with the affluent class of society in the countries of Asia Pacific, have now penetrated the middle class. Previously, the middle-class population connected personal care with low-cost and inexpensive services, and now, it prefers spending on premium personal care services on account of rising disposable income. This factor is further driving the regional growth for SaaS for spa management.

SaaS for the spa management market is expected to showcase steady growth in Europe as the increasing disposable income is making people more focused on living standard lifestyle spas services as the population prefers spending on premium personal care services such as spa. Thereby, increasing demand for spas services is boosting the SaaS for spa management market share in the region.

The markets in South America and the Middle East & Africa regions are expected to gain momentum in the coming years. SaaS solutions enable spa businesses to reduce operating costs, improve return on investment, enhance security, and provide continuous availability to their customers, which helps attract new customer bases. This factor is proliferating the regional growth for SaaS for spa management.

KEY INDUSTRY PLAYERS

Leading Companies Focus on Different Competitive Strategies to Capture Largest Market Share

Several companies are providing solutions to manage the functions of spas efficiently. Notable companies are also focusing on deploying various strategies such as acquisitions, partnerships, and others. In addition, with strategic collaborations and partnerships, the market players are strengthening their position in the market. Moreover, the deployment of acquisition strategies is on the rise, considering that industry players are aiming to enhance their presence and expertise to support spa centers globally. For instance,

• September 2021: Zenoti announced the acquisition of SuperSalon Software, a U.S.-based salon and spa management company. This acquisition significantly strengthened Zenoti’s leadership position in the spa management software industry.


• February 2022: Fresha.com SV Ltd acquired Bookwell, an Australian beauty and wellness booking software, which has over 5,000 salons registered on its platform.

LIST OF KEY COMPANIES PROFILED:

• Rosy Salon Software U.S.)


• Fresha.com SV Ltd (U.K.)


• MINDBODY, Inc. (U.S.)


• Vagaro (U.S.)


• Treatwell (U.K.)


• Aesthetics Pro (U.S.)


• Zenoti (U.S.)


• Meevo (U.S.)


• Mangomint (U.S.)


• Boulevard (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• March 2023: Treatwell announced a new partnership with mParticle, Inc., a customer data management platform to deliver a better digital experience.


• October 2022: Fresha.com SV Ltd launched a new partner referral program to reward existing businesses registered on its platform when they invite another business.


• October 2022: MINDBODY, Inc. partnered with Brivo Systems, LLC., a cloud-based access control SaaS company, to provide security solutions to wellness businesses. This partnership offers Mindbody platform users protection for their businesses, assets, and members with Brivo's signature cloud-based access control.


• June 2022: Vagaro, Inc. opened a new office in Stevenage, England, to address rising global customer demand and improve customer relationships in the U.K.


• May 2022: Rosy Salon Software partnered with DirectTIPS Operations, LLC., a digital tipping system provider for the salon and spa industry. The tipping solution processes payments through RosyPay and offers a seamless digital checkout experience.

REPORT COVERAGE

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The market report provides a detailed analysis and focuses on key aspects such as leading companies, product/service types, and leading applications of the product. Besides this, it offers insights into the market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that have contributed to the growth of the market in recent years.

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