In addition to being a discretionary service in a troubled economy, public concerns over ultraviolet (UV) tanning bed usage and the rise of a more health-conscious society are causing headwinds in the $2.7 billion tanning salon industry, which industry research firm IBISWorld expects will decline by 5.1 percent this year. But despite the seemingly gloomy forecast, the ray of hope for tanning salons shines in a relatively new growth segment: spray-tanning booths – the safe alternative to getting bronzed.
“Growing awareness about the high cancer risk associated with UV tanning beds will invariably diminish market share,” said George Van Horn, senior analyst with IBISWorld. “In order to stay in the game, tanning salons are not only incorporating innovative tanning solutions, but are diversifying their menus to offer health and beauty related services.”
IBISWorld projects these newer revenue streams will help deflect current negatives in the industry, where 72 percent of revenue is still being attributed to UV tanning beds:
“The new shift in the industry is arguably good for its image, and profits can still be reaped for salons that quickly adopt,” said Van Horn. “In contrast with the UV tanning segment, spray-on tanning booths are more profitable for operators in that they can offer slightly better margins. And as trends in health and beauty infiltrate their way into products and services, the public perception of tanning salons can start to take on a whole new light”.
With over 24,100 tanning salon businesses operating in the United States, IBISWorld expects the industry will generate $2.72 billion in 2009 – representing a 5.1 percent decline from last year. But despite compromising market conditions, the Los Angeles-based firm forecasts slight industry growth, at an average annual rate of 2.5 percent over the next five years, with spray-on tanners and services providing the bulk of this growth.