Spatec write-up

24 new spas have opened in last 12 months since the inaugural State of the UK Spa Industry Report was launched at SPATEC 2007.  These new spas are located  throughout the UK and have provided an extra 173 treatment rooms to UK consumers for their spa experiences. 

The sector has also seen an increase in demand over the last 12 months.  The estimated number of spa treatments purchased  in the last year have increased by 4% to 6.35million treatments per annum.

New Spas

The majority of new spas that have opened are from chain operators in the hotel sector, although salon and day spa sectors have also seen a few new spas openings. 

New Spas: Type of Spa

Type of Spa	Total	Percentage (%)
Spa within Hotel	16	66.7
Spa within Fitness Club	0	0
Salon Spa	5	20.8
Day Spa	3	12.5
Destination Spa	0	0
Medi Spa	0	0
Resort Spa	0	0
Holistic Spa	0	0
Total	24	100

Interestingly, the research found that no new spas have opened at UK fitness clubs in the last 12 months at.  However, of the 24 new spas that have opened 17, 71% , have gym facilities and 14, 58% of the new spas, also have pools.

The trend in new openings has been towards chain spas rather than single sites or franchise operations. 

Spa Closures

The report has, in addition, identified 9 spas which have closed since the end of March 2007. 

These closures have not been based on a particular sector since the 9 spas which have closed are spread across the main types of spas and between chains, franchises and single sites.  The spa closures are not restricted to small spas only; in fact the spas which have closed had between 5 and 12 treatment rooms.

Industry Comment

David Minton, Director of The Leisure Database Company, stated " The spa sector is growing steadily and the hotel operators are recognising the opportunities to be gained from investing now.  We believe however that there is plenty more consumer demand for spas at all the price points and expect to see further sustained growth in this sector."

Profile of Spa Industry

There are now 420 operational spas in the UK with 5 or more treatment rooms.  A further 4 spas are temporarily closed for refurbishment.

4,814 therapists are employed throughout the spa industry.  This represents an increase of some 243 extra therapists since April 2007 to manage the increasing demand at UK spas.

In recent years more men have shown an  interest in and become consumers of spa treatments.  The research findings reveal this trend.  UK spa operators have estimated that their client bases are made-up of  76% female clients and  24%  male clients.  Interestingly, operators  recognise that some male consumers do, however, still feel uncomfortable in a spa environment.

Spend at Spas

Spa operators have estimated that clients spend on average £58 per visit.  There are obviously wide ranges in spending as the table below indicates.  The State of the UK Spa Industry Report shows that over half of all spa visits generated an average spend per client of £50 or under in revenue.

Estimated Average Spend per Visit (88% sample, 371 spas)

Average Spend	Total	Percentage (%)
< £30	19	5.1
£30 - £50	179	48.2
£50 - £75	111	29.9
£75 - £100	38	10.2
£100 +	24	6.5
Total	371	100

 

Further revenue estimates were collected and 120 spas (out of the 420 spas in the industry) provided annual revenue estimates.  From these responses,  63% of spas generate an income of up to £250,000 per annum and just 12% generate income over £750,000 per annum.

Consumer Motivation

The research also looked into the most common motivations for visiting spas and the findings are that the three top reasons for visiting spas in the UK are:

• i) for relaxation,
• ii) for the wide range of treatments,
• iii) for the reputation the spa has generated.

Barriers to Overcome

Despite the growth in the spa sector it would appear that there is much to be done in raising consumer awareness of the benefits and accessibility of spas to make spa businesses more successful.  One third of spas cited ‘being too expensive for clients' as one of the three most likely reasons to affect spa profitability.   21% of spas felt that consumers  lacked knowledge about spas and this stopped more people attending and thus negatively impacted profitability for spa businesses.  And a further 19% of spas surveyed felt that poor customer service hampered their profitability.

Spas need to do more to encourage loyalty amongst their clients however as the market matures.  The research found out that spa's loyalty schemes are not common or not readily promoted by staff.

**A spa offers professionally supervised treatments to enhance health, well-being and relaxation and has a minimum of five treatment rooms.

METHODOLOGY

Spa Definition

For the purposes of this report a "Spa" is defined as follows:

"A Spa offers professionally supervised treatments, to enhance health, well-being and relaxation and has a minimum of five treatment rooms".

Salon Spas

"The Spa Business Association  has identified additional Salon Spas in the UK to those identified and included in this report".

"These venues were not used for the purposes of this report by The Leisure Database Company as they are still under consideration for inclusion in future research".

Data Sources

TLDCi: Database of all UK Health & Fitness Clubs

Magazines: Time Out, London; Spa Opportunities; Spa World; Professional Spa; Luxury Spa Finder; Spa Secrets

Internet: Spa Finder UK; Spa Seekers; The Good Spa Guide; The Spas Directory; Conde Nast; Times Online; iVillage; Spa Business

Publication: The Good  Spa Guide; The Leading Hotels of the World 2008

Audit Process

The UK Spa Audit was carried out  in March 2008 and achieved a 100% completion rate.  A total of 420 spas were fully audited by a team of dedicated TLDC researchers using a phone based questionnaire, to maximise the response  rate.

Intelligent Estimates

Not all Spas were able to provide exact figures for the total number of therapists employed, spa visitors or spa treatment numbers. Through our research we noted a strong positive correlation between therapists, visitors and treatments with the number of treatment rooms at the spa. Therefore where no data was provided, the average figures estimated from the number of treatment rooms was applied, in line with our 2007 FIA State of the Fitness Industry Report methodology.

Average (Median v Mean)

The median value (derived by sorting a list of numbers from lowest value to highest and selecting the middle value) - was used for all averages in this report with the exception of annual spa visitor and treatment estimates where the mean value was used, as it was a calculated field and the differences between individual values were significant (derived by calculating the sum of all the numbers in a list divided by the number of items in the list).