range of around us$80,000 (€62,900, £52,500) to us$105,000 (€82,600, £68,900) revenue per treatment room. Tis is significantly above that achieved by the three hotel spas in the Dead Sea region in Jordan: the PwC survey shows that the average daily treatment revenue per treat- ment room in the first four months of 2010 was us$133 (€89, £74) or just under us$49,000 (€38,550, £32,150) on an annual basis. Given that the sample is based on the leading hotels in Dubai and Jordan’s Dead Sea area, this would appear to be relatively low. Te low daily treatment room revenue could be down to poor uti-
lisation levels of treatment rooms – in beach hotel spas in Dubai the utilisation of available treatment rooms hours was around 25 per cent in 2009 Q1, increasing to 27 per cent in 2010 Q1. As expected, this is higher than in Dubai city hotel spas where in 2009 Q1 utili- sation was at 21 per cent, increasing to just over 23 per cent in 2010 Q1. Tough low, Dubai nevertheless outperforms the Dead Sea hotel spas in Jordan, where the utilisation level for January to April 2010 was 19 per cent. Tese results suggest that presently, the spa market in the Middle East is not very buoyant – although it’s difficult to state this as comparative data from before 2008 is not available. According to Sarkar from E&Y, the relatively low utilisation level
of treatment rooms in the Dubai hotel spas “shows that there are opportunities for performance improvement. It is clear that big and fancy structures were developed in Dubai and in the future perhaps there will be greater focus on more detailed feasibility studies of hotel ancillary facilities, such as spas. Due diligence on such facilities should be undertaken as if they were independent profit centres”.
MARKED IMPROVEMENT On the positive side, the E&Y study shows a marked improvement in the performance of hotel spas in Dubai in Q4 of 2009 (com- pared to Q3 2009), and the improvement continued into Q1 2010. A
SPA BUSINESS 3 2010 ©Cybertrek 2010
Presently, the spa market in the Middle East is not very buoyant, although there has been a marked improvement in nearly all KPIs since 2009 in Dubai hotel spas
comparison of the Q1 2009 and Q1 2010 key performance indicators in Dubai shows improvements in nearly all metrics; the E&Y survey authors say that “aggregate revenues for Dubai hotel spas in Q1 2010 were 45.5 per cent higher than spa revenues in Q1 2009”. Sarkar stresses that “2009 was an outlier, given the financial crisis –
although we hadn’t launched our survey in 2008, we were collecting data and the revenue levels for that year were definitely some 10 per cent to 20 per cent higher than those of 2009”. She adds that, hoteliers and spa operators discounted during 2009 which led to price-based competition. Spa operators have found it difficult to recover from the discounting of 2009, as this is the only metric which has remained more or less static between 2009 Q1 and 2010 Q1.
GROWING STRONGER LOCALLY One positive outcome of the downturn, however, was that, like many other countries, Dubai spa operators targeted the local market much more than they had done previously. At face value the numbers don’t reflect this – the actual proportion of non-hotel guests booking spa treatments decreased between Q1 2009 and Q1 2010 from 46 per cent to 39 per cent for all hotels in Dubai. Yet this proportional decline is to be expected if you take into account the recovery of tourism to Dubai (and a growth in hotel guests) and the significant increase in spa revenues between the two periods – as overall revenues increase, some elements may grow more than others, but this doesn’t mean segments which grew at a slower rate declined.
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