As noted from my previous blog, the first issue I would like to address, which will help all of us understand data in our spa industry more clearly, is the need for everyone to be aware of the parameters and the definition of terms in any particular study. This is important so that information can be understood in its correct context. For example, in ISPA’s recent press release of several weeks ago which included preliminary numbers from their 2007 Spa Industry Study, it is imperative for us to understand their definition of spa and what they count as spa revenue. Understandably, their data will reflect their definitions.
As a result of studying ISPA’s data for many years now and talking with some of their leaders recently, it is my understanding that their definition of spa changed in 2005 – a year after they released their 2004 Spa Industry Study. This is why ISPA went back and “re-weighted” the results from their 2004 Spa Industry report.
Remember, their 2004 Spa Industry Study showed spa industry revenues at $11.2 billion for the year 2003. When they decided on a narrower definition of spa in 2005 and actually executed a census (counting every establishment rather than taking a sample), they announced re-weighted updates on all of their numbers. This lowered the revenue figure considerably – by about $ 4.2 billion or 60%. In other words, what was initially reported as an $11.2 billion revenue figure for spas in 2003 was later changed to $7 billion for 2003. It would have helped (and would still help) to understand the first definition of spa and their revised, second definition which altered these results so dramatically. It is this narrower definition of spa which was used in the 2007 report, reflecting the notion that revenue figures are much more conservative than they once were.
Although this adjustment was announced briefly at one of their conferences and there is a one sentence footnote on the U.S. Spa Industry Figures stats sheet released on November 6, 2006 (and I believe it might have been provided with renewal of membership – though I did not notice it), I do think that it would have helped for this to be communicated more clearly and more often. Additionally, since their 2004 Spa Industry Study is still being sold on their website (and from what I understand it does not include the re-weighted numbers), it is understandable that this has caused some confusion in the marketplace.
The bottom line is that ISPA’s definition of what counts as a spa is narrower now than it used to be and narrower than how other people might define what counts as a spa. As a result we can expect some differences in industry statistics from various sources.
Tomorrow…let’s talk about the difference between spa revenue and spa industry figures.
*And just a reminder: these discussions are important and accuracy is important. Please chime in if you have additional information which will help us all understand our industry more clearly. Hit the “comment” button below.