RESEARCH SUPPLY & DEMAND
Te Middle East has some beautiful spas, but are they attracting enough customers? We compare and contrast two early 2010 surveys on the region to find out LEONOR STANTON » CONTRIBUTING EDITOR » SPA BUSINESS
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Te growth of the spa industry over the last decade or so, and its importance to the hotel industry specifically, has attracted the atten- tion of some of the major accounting firms. In 2007, PKF introduced its US Trends in the Hotel Spa Industry benchmarking sur- vey (SB10/2 p30). In the Middle East, in 2009,
Ernst & Young (E&Y) launched its Spa Benchmark Survey of hotel spas in Dubai. Tis year, PricewaterhouseCoopers (PwC) is the lat- est to join in with its Dead Sea Spa Benchmarking Survey in Jordan. Both E&Y and PwC wish to expand their surveys to other countries in the Middle East. According to PwC’s partner and Middle East
leader Mohammad Dahmash, “the spa industry is growing in the Middle East. Hotel operators now consider spa facilities an impor- tant component of their overall offer.” So, bearing in mind this interest from the accounting firms, how
is the spa market in the region bearing up and what advice can be given to spa operators?
THE PERFORMANCE INDICATORS Te E&Y survey is based on 16 hotel spas, equally split between the beach and city areas in Dubai. Nikita Sarkar, the report’s author, says this covers “over 95 per cent of the sample segment of luxury and five- star hotel spas”. Te PwC survey is based on three hotel spas on the shoreline of the Dead Sea in east Jordan, covering around 75 per cent of the luxury market in that destination. Both surveys focus on 10 revenue-based metrics, including revenue per treatment sold, per treatment room, per therapist, per treatment hour as well as the utilisation of treatment rooms and therapists. Two other revenue sources are analysed – fitness memberships and retail. Te hotels were also asked to report on the proportion of hotel versus non-hotel customers which use the spa. Te results of both surveys are directly comparable, as they analyse the same 10 performance indicators.
It's suggested that operators need to keep good staff – in the downturn labour was cut and many spas were caught out when demand picked up in Q4 2009
TREATMENT ROOM REVENUE AND UTILISATION Overall, spas in Dubai hotels achieved a revenue per available treatment hour (RevPATH) of us$21 (€17, £14) in the first quarter (Q1) of 2010, while the spas in hotels in Jordan’s Dead Sea region achieved a RevPATH of us$16 (€13, £11) between January and April 2010. In both loca- tions, this represents only 20 per cent of the average treatment revenue per treatment sold. Tis would sug- gest that the businesses are under-performing and that there is great room for improvement. Unlike metrics that are based on the number of treatment rooms, or square feet, this is based on different operating hours per day in different establishments, which may consequently differ between seasons and is not a fixed variable. A more robust metric is the daily treatment revenue
per treatment room. In the E&Y survey, this metric shows that the beach hotel spas (see Graph 1 on p32) outperform those in the city of Dubai (see Graph 2 also on p32); while the beach hotel spas achieved an average daily treatment revenue per treatment room of us$258 (€202, £169) in Q1 2009 and us$287 (€225, £188) in Q1 2010, the spas in Dubai city hotels achieved us$217 (€170, £142) and us$228 (€179, £149), respectively. Annualised, this represents a
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