A range of research on the spa industry worldwide was presented at the recent Global Spa Summit, allowing spa professionals to get a better look at the industry's big picture around the globe.
The third annual Global Spa Summit (GSS) has released a detailed body of research presented at its recent industry conference held in Interlaken, Switzerland. Top-level spa, wellness, and medical professionals from Ghana to the Philippines meet annually at the Summit in a think-tank environment to share best practices and collaborate on strategies to help ensure the industry’s ongoing health and growth.
While the new research reveals global challenges faced in 2009, particularly within the high-end luxury resort spa sector, it also shows the strength and resiliency of the industry in fast-growing markets such as Asia-Pacific and across the world. The economy also appears to be accelerating an ongoing macro trend: the expansion of an industry focus on preventive health and wellness, and a shared perception that opportunities lie in a collaborative future with the health and medical industries.
Commenting on the research findings, Susie Ellis, member of the Global Spa Summit board and president of SpaFinder, Inc., noted that, “Rather than the economy causing largely adverse effects, it appears that new economic challenges are sharpening a shift that was well underway—with the industry today thinking far beyond mere luxury to new markets, new consumers and new offerings that now make spa a key player in the health industry, in addition to being part of the travel and luxury markets.”
Original industry reports presented at this year’s Summit included:
- A live poll of summit delegates on the current performance and future directions of their companies and the industry
- Intelligent Spas’ 2009 Global Spa Summit Spa Benchmark Report, presenting global and regional spa industry benchmarks specifically for the Global Spa Summit
- Global hotel data provider Smith Travel Research’s (STR) first-ever luxury hotel-spa benchmark report, gauging the luxury resort sector’s recent performance
- A collaborative report between Cornell School of Hotel Administration, U.S. and École hôtelière de Lausanne, Switzerland graduate students: Contribution of Spas to Hotel Operating Performance – An International Study
Key findings from GSS delegate survey
- 48% of delegates reported revenue gains in ’08 over ’07, with 34% having seen no change, and only 18% reporting declines.
- Despite the severe economic downturn in ’09, 39% of spa companies report they actually expect revenue to increase this year; 30% expect it to stay the same; with 31% anticipating declines.
- Delegates report that the preventive health segment has the biggest opportunity for its future business (37%), more than twice those that named a luxury spa focus, and significantly outranking day spas, cosmetic medical spas, chain/branded spas or real estate.
- The Internet, along with preventive health care, rank as the two forces predicted to have the most influence on spas’ business moving forward, significantly outranking sustainability and an aging population across all regions.
- When asked which industry they would be most interested in collaborating with, health care (46%) largely outranked the next sector, travel and tourism (20%), which trumped information technology (13%), construction/real estate (10%), consumer goods (7%) and media/entertainment (4%).
- Delegates report the two most critical factors in the expansion/profitability of the industry are marketing (28%) and health care insurance regulations (25%), followed by emerging consumer markets (19%), public policy/government (14%) and the hotel construction pipeline (14%).
- 51% of delegates report sustainability and environmental responsibility will have a significant influence on their business, 36% somewhat and only 13% ‘very little.’
- Three in four delegates report the current economy has either significantly or somewhat improved the labor shortage problem, which ranked as the #1 issue facing the spa industry in both 2007 and 2008 GSS polls.
- ‘Definitions/standards/best practices’ issues ranked as the #1 problem facing the global spa industry today (29%), followed by training and education (21%), low margins (15%), labor costs (11%), lack of benchmarks (7%), oversupply of spas (6%), labor shortage (4%), technology (4%), medical liability (2%) and funding limitations (2%).
Key findings from Intelligent Spas report
- The average rate for a spa treatment in 2008 was $90. Europe was the highest at $111, and Asia-Pacific the lowest, at $77.
- In 2008, the average size of a spa was 8,847 square feet, featuring nine treatment rooms. Employees per spa averaged 22.9, with the Americas averaging the most (33.8) and Europe the fewest (13.6). 50% of total spa revenue is spent on salaries and employee benefits, by far the most significant expense category. Spas spend, on average, 9% on operations/maintenance, and only 4% on marketing, and 2% on training.
- The day spa guest has become critical for hotel spas: 38% of total spa visits at hotel spas now come from non-hotel, local community guests. In some regions such as Europe and the Middle East/Africa, this is approaching the 50/50 mark. (53% hotel/47% non-hotel guests for both regions.)
- In terms of the outlook for 2009, Asia-Pacific spas report the most optimism, with annual spa revenue expected to grow 24% from 2008 to 2009. Meanwhile Middle Eastern/African spas show the most pessimism, expecting revenue to fall roughly 20%.
- The region with the largest percentage of outsourced spas, or those using a management company, was the Americas at 32%, three times higher than any other region.
- Spa revenue figures originally forecast in the last quarter of 2008 needed to be trimmed by 9.4% after the economic downturn in the first quarter of 2009.