How Investment Bankers View the Medical Spa Industry

By Pinch Med Spa Staff

December 30, 2023

The medical spa industry represents an attractive segment at the intersection of healthcare and consumer services.

With a projected compound annual growth rate (CAGR) of approximately 10%, it's a become an attractive market for investors. This comprehensive guide explores the industry from an investment banker's perspective, analyzing customer demographics, treatment types, provider profiles, and strategic opportunities for medical spa owners based on conversations with several investors who follow the industry closely.

Industry Overview and Financial Metrics

Medical spas contribute significantly to the $35 billion U.S. aesthetics market. Medical spas generally operate on a 100% cash-pay basis, with an average consumer spend of over $500 per visit and repeating 2 to 4 times a year. Approximately 65% of visits come from repeat customers, highlighting the industry’s strong retention rates. This consistent revenue stream and substantial unit economics make medical spas an enticing prospect for growth-oriented investors. This makes the medical spa industry a large, high margin growth category that is attracting material investor interest from private equity.

Customer Demographics and Profiles

Understanding customer profiles is crucial for targeting marketing efforts and designing service offerings. Here’s a breakdown:

  • Age Range: The core demographic includes individuals aged 30 to 60, though there is increasing interest from younger age groups, reflecting broader demographic trends and the preventive use of aesthetic services.
  • Income Levels: Typically, clients have a higher disposable income. However, the market is expanding into middle-income brackets.
  • Gender Distribution: While the market has traditionally been dominated by women, male clients have increased by 300% from 2000 to 2022, illustrating a significant market expansion.
  • Behavioral Insights: Customers often seek non-invasive treatments with minimal downtime, highlighting a preference for procedures that offer significant aesthetic improvements without prolonged recovery periods.

Analysis of Treatment Types and Their Market Share

Medical spas offer a variety of services, each contributing differently to revenue and market share:


  • Neuromodulators Tox as Botox, Xeomin and Dysport make up about 33% of all procedures. Patients typically return for 2-4 treatments annually
  • Fillers: Belotero, Versa and other fillers are the next most popular representing roughly a third of the market and last 6 to 12 months.

Laser Treatments

  • Applications: These are used for skin corrections and hair removal, accounting for approximately 17% of services. Multiple sessions are required, dependent on treatment goals.

Body Contouring

  • Technologies: Including CoolSculpting and Vaser Shape, these require 2-3 sessions per area treated and represent about 8% of procedures.

Skin Rejuvenation

  • Examples: Treatments like Hydrafacial and Ultherapy are designed for collagen stimulation and account for roughly 10% of procedures. These are usually annual treatments.

Provider Profiles Across the Industry

Understanding the landscape of service providers helps in identifying competitive pressures and opportunities for collaboration or differentiation:

Medical Spas

  • Focus: Primarily on non-invasive aesthetic services under medical supervision.
  • Services: Wide range, from injectables to laser treatments.

Plastic Surgery Clinics

  • Offerings: Combine surgical procedures with non-invasive treatments to increase patient retention and maximize revenue.

Dermatology Clinics

  • Specialization: Focus on skin health with an increasing number of aesthetic procedures like facial injections and light therapies.

Wellness Clinics and Day Spas

  • Services: Offer traditional beauty treatments and wellness services like massages and facials, with some providing minor aesthetic treatments.

Market Trends and Strategic Opportunities

The medical spa industry's growth is supported by several key trends:

  • Technological Advancements: Innovations in non-invasive treatment technologies are expanding the range of services offered at medical spas.
  • Increased Consumer Awareness: More people are turning to medical spas for their preventative and cosmetic needs, driven by social media and broader cultural acceptance of aesthetic treatments.
  • Economic Resilience: The industry has shown strong growth even during economic downturns, indicating the essential nature of its services to its clientele.

Investment and Expansion Strategies

For medical spa owners, the current market dynamics offer multiple avenues for growth:

  • Consolidation Opportunities: Given the fragmented nature of the industry, consolidation can lead to significant operational efficiencies and market expansion.
  • Diversification of Services: Expanding service offerings to include emerging treatments can attract a broader client base.
  • Strategic Marketing: Effective marketing strategies that highlight unique selling propositions and capitalize on social media trends can drive customer acquisition and retention.

Overall, the medical spa industry presents a compelling opportunity for growth, driven by strong market demand, high customer retention, and expanding demographic interest. Owners and potential investors generally focus on leveraging technological advancements, exploring consolidation opportunities, and implementing robust marketing strategies to capitalize on this growing market. Feel free to learn more about the medical spa market expansion and some professional service firms helping medical spa expand.

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