Research
Wellness spas


Intelligent Spas’ first-ever industry benchmark report for wellness spas shows the niche industry poised for growth – and generating more revenue than industry averages. Julie Garrow shares more details


Independent spa research company Intelligent Spas has produced its first-ever industry benchmark report for wellness spas, which revealed that wellness spas employ more people, attract a greater percentage of local residents and generate more revenue per square metre/ft compared to all other spa types on average.

The Wellness Spas Benchmark Report involved a group of 16 selected spas across Europe, Africa, the Middle East and Asia, with an average size of 3,026sq m (32,570sq ft). For the purposes of the research, Intelligent Spas defined a wellness spa as offering a variety of spa treatments and packages incorporating wellness attributes; health and fitness-related services, classes and consultations; along with an emphasis on wellness throughout its corporate branding.

How are wellness spas performing financially?
The annual revenue generated in the last financial year averaged US$1.3 m (€1.2m, £1m), compared to the industry average of US$690,000 (€635,500, £548,000). On average, 67 per cent of wellness spas’ revenue was generated by treatments, with 4 per cent coming from retail sales.

Annual revenue per square metre was US$857 (€794, £687), and annual expenses per spa amounted to just over 40 per cent of revenue. Wellness spas retained an average of 20.3 employees, while the industry average for spa employees is 14.

Who visits wellness spas?
Wellness spas welcomed 9,526 guests on average in the last financial year, 46 per cent of whom were return visitors. The gender segmentation of those visitors is fairly close; 56 per cent of visitors were female and 44 per cent were males This is slightly different from average spa segmentation, where 41 per cent of visitors are male and 59 per cent are female.

The largest market segment by age for wellness spas was also quite young, with the coveted 30-to-39-year-old range coming in on top. On average, 63 per cent of wellness spa visitors were local residents and 22 per cent were international tourists, compared to 50 per cent and 27 per cent respectively in industry averages. At hotels and resorts, 37 per cent of total spa visits were captured from guests staying at the property co-located with the wellness spa.

What does the wellness hotel achieve?
On average, hotels offering wellness spas contain 209 guest rooms and achieved achieved 63 per cent average annual occupancy during the last financial year, with an average daily rate of US$401 (€372, £322). Revenue per available room (RevPAR) for hotels with wellness spas was US$159 (€147, £128).

More hotel groups are incorporating wellness spas into their offering, and these new statistics help them better plan and implement the spa facility as a revenue-generating department, as opposed to an assumed, need-to-have cost centre. A detailed campaign is required to continually entice hotel guests to the spa, thus increasing RevPAR for the hotel business, while generating guest loyalty by providing spa and wellness options.

What is the unique selling proposition of wellness spas?
This was the first time Intelligent Spas incorporated a question about unique selling propositions (USP) in its spa benchmark survey. The majority of respondents stated their wellness treatments and facilities strongly contributed to their USP.
• 62 per cent of wellness spas offered a hammam or a hammam-style treatment
• 67 per cent offered a relaxing bath experience
• 53 per cent provided consultations for medical-related services, being either conventional and/or complementary
• 80 per cent of spas surveyed stated they offered separate relaxation rooms for females and males
• 94 per cent of spas had a steam room
• 82 per cent provided a sauna
• 67 per cent of wellness spas were designed with a private client consultation room

Creating a spa menu with wellness-inspired experiences is critical to being a wellness spa. In addition, offering unique facilities including water experiences and various relaxation areas is necessary in the physical design of a wellness spa. Relevant marketing items – for example, website content and images – as well as wellness-related campaigns, must be designed to support and reflect the overall wellness concept of the spa.

Outlook for 2017
It looks like an eventful year ahead for wellness spas, as many of the key indicators are predicted to fluctuate. Despite more demand for wellness services, with average visitor numbers forecast to increase by 4.3 per cent per spa, owners and managers of wellness spas believe average revenue per guest could drop by 4.5 per cent. Average revenue per spa is forecast to be stable. However, the number of employees required to operate a wellness spa is set to increase by 4.3 per cent, which will drive total expenses up by 4.5 per cent year-on-year.

Wellness spas, not dissimilar to any spa type, may manage constant changes in key benchmarks by regularly monitoring them, which enables timely action to be taken to correct areas of the business which need slight improvement. Also, benchmarking gives owners and managers time to pivot the business when it experiences a major disruption, such as a new spa entering their marketplace.

Wellness Spas:

 



Outlook for 2017
How do wellness spas stack up?

Key performance indicators and unique selling propositions for this niche industry

Wellness Spas: Financial benchmarks (us$)
Annual Revenue per Spa 1.3 M
Revenue Breakdown - Treatments 67%
Revenue Breakdown - Retail 4%
Annual Revenue per Square Metre8 75
Annual Expenses as a % of Revenue 42%
Average Employees 20.3

Wellness Spas: Visitor benchmarks
Annual Spa Visitors 9,526
Repeat Visitation Rate 46%
Visitor Breakdown - Females 56%
Visitor Breakdown - Males 44%
Market Segment - Top Age 30-39 yrs
Market Segment - Local Residents 63%
Market Segment - International Tourists 22%
Total Visits Captured from Hotel/Resort 37%

Wellness Spas: Hotel benchmarks (us$)
Number of Guest Rooms 209
Average Annual Occupancy 63%
Average Daily Rate 401
Revenue per Available Room 159

Wellness Spas: USP benchmarks
Hammam or Hammam-style Treatments 62%
Bath Experiences 67%
Conventional/Complimentary Medicine 53%
Separate Gender Relaxation Rooms 80%
Steam Room 94%
Sauna 82%
Private Consultation Room 67%

Source: Intelligent Spas



The full report on Wellness Spas Benchmarks is available at intelligentspas.com



 

Julie Garrow
 

Julie Garrow is founder and MD of Intelligent Spas

Email: julie@intelligentspas.com

Twitter: @IntelligentSpas


 


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SELECTED ISSUE
Spa Business
2017 issue 2

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Spa Business - Wellness spas

Research

From Spa Business 2017 issue 2
Wellness spas


Intelligent Spas’ first-ever industry benchmark report for wellness spas shows the niche industry poised for growth – and generating more revenue than industry averages. Julie Garrow shares more details

Wellness spas employ more people, attract a greater percentage of local residents and generate more revenue nd3000 / SHUTTERSTOCK
Creating a spa menu with wellness-inspired experiences is critical to being a wellness spa Poznyakov / SHUTTERSTOCK

Independent spa research company Intelligent Spas has produced its first-ever industry benchmark report for wellness spas, which revealed that wellness spas employ more people, attract a greater percentage of local residents and generate more revenue per square metre/ft compared to all other spa types on average.

The Wellness Spas Benchmark Report involved a group of 16 selected spas across Europe, Africa, the Middle East and Asia, with an average size of 3,026sq m (32,570sq ft). For the purposes of the research, Intelligent Spas defined a wellness spa as offering a variety of spa treatments and packages incorporating wellness attributes; health and fitness-related services, classes and consultations; along with an emphasis on wellness throughout its corporate branding.

How are wellness spas performing financially?
The annual revenue generated in the last financial year averaged US$1.3 m (€1.2m, £1m), compared to the industry average of US$690,000 (€635,500, £548,000). On average, 67 per cent of wellness spas’ revenue was generated by treatments, with 4 per cent coming from retail sales.

Annual revenue per square metre was US$857 (€794, £687), and annual expenses per spa amounted to just over 40 per cent of revenue. Wellness spas retained an average of 20.3 employees, while the industry average for spa employees is 14.

Who visits wellness spas?
Wellness spas welcomed 9,526 guests on average in the last financial year, 46 per cent of whom were return visitors. The gender segmentation of those visitors is fairly close; 56 per cent of visitors were female and 44 per cent were males This is slightly different from average spa segmentation, where 41 per cent of visitors are male and 59 per cent are female.

The largest market segment by age for wellness spas was also quite young, with the coveted 30-to-39-year-old range coming in on top. On average, 63 per cent of wellness spa visitors were local residents and 22 per cent were international tourists, compared to 50 per cent and 27 per cent respectively in industry averages. At hotels and resorts, 37 per cent of total spa visits were captured from guests staying at the property co-located with the wellness spa.

What does the wellness hotel achieve?
On average, hotels offering wellness spas contain 209 guest rooms and achieved achieved 63 per cent average annual occupancy during the last financial year, with an average daily rate of US$401 (€372, £322). Revenue per available room (RevPAR) for hotels with wellness spas was US$159 (€147, £128).

More hotel groups are incorporating wellness spas into their offering, and these new statistics help them better plan and implement the spa facility as a revenue-generating department, as opposed to an assumed, need-to-have cost centre. A detailed campaign is required to continually entice hotel guests to the spa, thus increasing RevPAR for the hotel business, while generating guest loyalty by providing spa and wellness options.

What is the unique selling proposition of wellness spas?
This was the first time Intelligent Spas incorporated a question about unique selling propositions (USP) in its spa benchmark survey. The majority of respondents stated their wellness treatments and facilities strongly contributed to their USP.
• 62 per cent of wellness spas offered a hammam or a hammam-style treatment
• 67 per cent offered a relaxing bath experience
• 53 per cent provided consultations for medical-related services, being either conventional and/or complementary
• 80 per cent of spas surveyed stated they offered separate relaxation rooms for females and males
• 94 per cent of spas had a steam room
• 82 per cent provided a sauna
• 67 per cent of wellness spas were designed with a private client consultation room

Creating a spa menu with wellness-inspired experiences is critical to being a wellness spa. In addition, offering unique facilities including water experiences and various relaxation areas is necessary in the physical design of a wellness spa. Relevant marketing items – for example, website content and images – as well as wellness-related campaigns, must be designed to support and reflect the overall wellness concept of the spa.

Outlook for 2017
It looks like an eventful year ahead for wellness spas, as many of the key indicators are predicted to fluctuate. Despite more demand for wellness services, with average visitor numbers forecast to increase by 4.3 per cent per spa, owners and managers of wellness spas believe average revenue per guest could drop by 4.5 per cent. Average revenue per spa is forecast to be stable. However, the number of employees required to operate a wellness spa is set to increase by 4.3 per cent, which will drive total expenses up by 4.5 per cent year-on-year.

Wellness spas, not dissimilar to any spa type, may manage constant changes in key benchmarks by regularly monitoring them, which enables timely action to be taken to correct areas of the business which need slight improvement. Also, benchmarking gives owners and managers time to pivot the business when it experiences a major disruption, such as a new spa entering their marketplace.

Wellness Spas:

 



Outlook for 2017
How do wellness spas stack up?

Key performance indicators and unique selling propositions for this niche industry

Wellness Spas: Financial benchmarks (us$)
Annual Revenue per Spa 1.3 M
Revenue Breakdown - Treatments 67%
Revenue Breakdown - Retail 4%
Annual Revenue per Square Metre8 75
Annual Expenses as a % of Revenue 42%
Average Employees 20.3

Wellness Spas: Visitor benchmarks
Annual Spa Visitors 9,526
Repeat Visitation Rate 46%
Visitor Breakdown - Females 56%
Visitor Breakdown - Males 44%
Market Segment - Top Age 30-39 yrs
Market Segment - Local Residents 63%
Market Segment - International Tourists 22%
Total Visits Captured from Hotel/Resort 37%

Wellness Spas: Hotel benchmarks (us$)
Number of Guest Rooms 209
Average Annual Occupancy 63%
Average Daily Rate 401
Revenue per Available Room 159

Wellness Spas: USP benchmarks
Hammam or Hammam-style Treatments 62%
Bath Experiences 67%
Conventional/Complimentary Medicine 53%
Separate Gender Relaxation Rooms 80%
Steam Room 94%
Sauna 82%
Private Consultation Room 67%

Source: Intelligent Spas



The full report on Wellness Spas Benchmarks is available at intelligentspas.com



 

Julie Garrow
 

Julie Garrow is founder and MD of Intelligent Spas

Email: julie@intelligentspas.com

Twitter: @IntelligentSpas



Originally published in Spa Business magazine 2017 issue 2

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