The spa market research company Intelligent Spas has released a survey on the industry in South Africa, showing how it has been affected by the global recession and its curret positions within the global spa industry.
Intelligent Spas' second Spa Benchmark Report on the South African spa market presents an extensive collection of financial statistics, including breakdowns of key performance indicators by day spas, hotel spas and resort spas. The new research found more than 200 spas are operating in South Africa and generated revenue of ZAR380 million (approximately $47 million) in 2008, representing a 2% decrease compared to 2007.
Other key findings include:
- 45% of spas were day spas (not co-located with accommodation) and 55% were destination spas incorporating hotel, resort and retreat spas offering overnight accommodation.
- More than 2,500 people were employed by the South Africa spa industry in 2008, which was a 15% increase on 2007 employment numbers.
- Treatment revenue per spa decreased by 16% between 2007 and 2008.
- Hotel spas achieved higher revenue per spa compared to day spas and resort spas.
- Day spas achieved more daily visits per spa on average compared to hotel and resort spas.
- Less than 30% of spa visits were from males.
- International tourists made up over one fifth of visitors.
- More than two-thirds of visits to hotel spas were from people not staying in the adjoining hotel, highlighting the importance of hotel and resort spas also catering to their local markets in terms of operational policies and procedures and incorporating local day spas in their competitor analysis activities.
- Prices of standard spa treatments were higher at hotel spas in comparison to prices set by day spas and resort spas.
- 77% of respondents stated clients are more price-sensitive, explaining clients had requested discounts, packaged treatments and added value.
"The South African spa market is performing relatively well despite the global economic conditions, and spa owners and managers have a positive outlook. This updated research identifies key differences in the performance of day spas, hotel spas and resort spas which are critical for each type of operator to understand" stated Julie Garrow, managing director of the independent research company Intelligent Spas.
Dr. Nadine de Freitas, executive eirector of the South African Spa Association, added, "The release of the South African Spa Benchmark Report is a fundamental step in the growth and maturity of the South African spa industry, allowing an accurate understanding of the industry statistics, financial indicators, industry weaknesses and strengths, to facilitate efficient spa operations and maximise profit potential and industry opportunities. The South African Spa Association thanks Julie Garrow and Intelligent Spas for their commitment to 100% independent spa research, so allowing all investors and spa operators access to crucial spa intelligence, to indentify key success factors and ensure a successful and competitive spa, in today's ever-changing market."
- Spa numbers are forecast to grow by 8% this year.
- Visits to day spas are forecast to grow by 20% in 2009.
- Revenue per spa is predicted to increase into 2010.
Spa benchmarks available
The full report is available from Intelligent Spas Web site at www.IntelligentSpas.com and contains more than 800 updated spa industry benchmarks relating to total spa revenue, spa treatment revenue, expenses, visits and employment, with many topics showing historical data available from 2005 to 2008, plus forecast data for 2009 and 2010. The benchmarks are comparable across the entire spa industry due to the consistent global research methodology implemented by Intelligent Spas.
Other statistics and benchmark ratios featured in the report include:
- Average revenue per visit
- Total revenue and treatment revenue per available treatment hour and minute
- Total revenue and treatment revenue per square meter/foot
- Total revenue and treatment revenue per available treatment room
- Total revenue and treatment revenue per employee
- Breakdown of total revenue, including retail revenue
- Breakdown of total expenses
- Repeat visitation rate
- Visitor profiles by gender, age and residence
- Proportion of hotel guests visiting the spa
The report also presents a collection of supporting business intelligence, including:
- Spa business models describing ownership, business structure, management structures.
- Spa infrastructure covering spa size, space breakdown, treatment rooms and stations, standard support facilities versus water-based support facilities.
- Spa menus, such as variety of hydrotherapy and water-based treatments offered and the range of treatments practiced.
- Spa industry trends relating to clients and products.
Research objectives and sampling
This Spa Benchmark Report aims to provide a reliable update of the spa population, profile, size and value, plus calculate updated and reliable industry benchmarks for key financial and performance indicators.
The research achieved a response of 62 validated spa businesses, representing 30% of the spa population, where 5% is considered reliable in industry research terms, and is available for purchase from www.IntelligentSpas.com. Note: Intelligent Spas does not conduct anonymous surveys. Each respondent must identify themselves, comply with Intelligent Spas' benchmark definition of "spa" and pass numerous screening criteria to qualify to ensure the research is accurate and reliable for users. Intelligent Spas' 100% independence policy ensures all individual survey data submitted by spas is not used for any other purpose.
Intelligent Spas is one of the only 100% independent research companies specializing in the spa industry. Founded in Singapore in 2001, it has helped pioneer spa industry research in the greater Asia Pacific region and continues to publish a range of Spa Operations Manuals and Spa Benchmark Reports to assist the performance and growth of this essential industry.
Intelligent Spas' Global Spa Benchmark Program is currently underway in more than 80 countries and aims to produce reliable and comparable statistics to help spas maximize their performance, provide business intelligence to assist other organizations to better understand, service and support the spa industry plus generate greater awareness of the spa industry to increase spa visits.