Global Tanning Salon Industry
The global tanning salon industry is characterized by a high degree of fragmentation. Market share is not concentrated and leading outfits do not exercise much influence over the industry as a whole. The industry is highly competitive, with many non-traditional players –such as beauty salons, spas and health clubs – offering the same tanning services as tanning salons.
Indoor artificial tanning involves the use of tanning booths and tanning beds that give out UVA and UVB radiation in approximately a 9:1 ratio to give skin a tanned appearance. This cosmetic service is offered by a variety of operators including health spas, fitness centers, tanning locations, beauty parlors and hair salons.
Due to the competitive nature of the global tanning salon industry, there is an increasing degree of consolidation activity, with franchises dominating the market and tanning salon chains a common feature. Larger outfits are diversifying to offer a wider range of health, beauty and skin services to boost market share.
Trends
Indoor tanning has received unfavorable press in recent years due to associated health risks. As a result, spray tans have been rising in popularity. Spray tanning involves the use of aerosols to darken skin, imitating a tanned effect, which lasts for around a week. Airbrush tanning currently constitutes the beauty industry’s most dynamic market segment, according to the American Tanning Institute. Spray tanning and body bronzing were ranked the two most lucrative services in the industry in a survey recently carried out on the US spa/salon sector.
Mobile spray services are an attractive business for those attracted to the low cost involved in this type of start-up. Market entry is becoming more difficult due to increasingly strict regulation.
Regional Market Share
The US tanning salon market surpassed the $5 billion mark in 2011, with industry growth having slowed to around -1% for the five preceding years, according to research from IBIS World. The American Tanning Institute estimates there are around 30,000 indoor tanning facilities in the US. These facilities employ more than 150,000 people and serve close to 30 million customers.
Market Outlook
In recent years, consumers have become increasingly conscious about issues such as the environment and health in general. A trend toward green consumerism, natural products and personal responsibility for health through informed consumer choices is evident across several industry sectors. The tanning salon industry in particular has been cause for concern due to the risk of skin cancer associated with using tanning beds.
As a result, market entry is becoming more problematic in the face of increasingly strict regulatory measures. Businesses are also required to post warnings and are not allowed to grant minors access to tanning beds. Similarly, rising tax rates are being applied to tanning salons in a bid to dissuade consumers from using tanning beds. The success of tanning facilities therefore hinges on their ability to quell consumer health concerns and/or to diversify to offer alternatives such as fake tanning sprays and booths to retain clients.
Leading Industry Associations
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