I'd probably suggest an oil based poly or a good spar varnish if you can find it. Water based poly is also an option and has a lower VOC level, but it's not as durable in my experience. Poly should dry clear where as varnish will have a slight yellow tint. Any of these products should give you about 7-10 years on the walls and 3-5 on the floor between recoats.
Application will depend on whether you have smooth or rough cedar. I would suggest mid grade brushes for smooth and a combo of 3/8 nap rollers and brushes for rough. Always work with the grain and leave a wet edge to blend. Start and stop at corners so that you don't have to overlap dried areas. Open windows, doors, fans and respirators are a must. I would suggest drying the area as well as you can even if it means shutting of the spa for a week to cut the humidity.
Good luck.
