Dr. Judy Singer

Health Fitness Dynamics. (HFD), an established spa consulting company in the United States, conducted a worldwide spa economic study of spas within resorts entitled "HFD’s 2003/2004 Spa Financial Benchmark Research Study". This global landmark study provides never-before released financial information that can be used as economic benchmarks for feasibility analysis, financial audits and operating forecasts. It also includes data of Non-U.S.-Spas. Hoteliers are invited to participate in the 2005 Study.

In this study spas were categorized as either U.S. (United States) or Non U.S. (international). Among the key findings of the self-reported data from year 2004:

• Non U.S. spas have a higher Spa-Specific Revenue per Occupied Hotel Room (RPOR). For every occupied hotel room, the spa contributes an average of $49 verses $40.
• Operating Expenses as a Percentage of Spa Gross Revenues is about the same in the U.S. than in other areas of the world. Operating expenses are about 16% of gross revenues.
• Non U.S. spas have a significantly lower Spa-Specific Payroll as a Percentage of Spa Gross Revenues. Spa payroll is about 32% verses 52%.
• U.S. spas have a slightly higher Net Operating Profit. Profit is about 27% in the U.S. verses 25%.
• Non U.S. spas have a higher Utilization of Treatment Rooms with an average of 43% verses 37%.

It appears that U.S. spas and Non U.S. spas are both tangible assets and their bottom line economics are not extremely different. While the Non U.S. spas contribute more to the hotel on a RPOR basis, the U.S. spas have a slightly higher profit as a business. It seems that all spas can be successful business ventures, but there is an opportunity to improve their performance.

In June 2004, HFD had contacted major hotel/resort chains; management companies; asset managers; hospitality marketing organizations and associations; spa marketing organizations and associations; and independent hotels/resorts. All the invited participants were resort spas where the spa is defined as "a full-service facility that is part of a lodging establishment (hotel or resort)". Guests at the resort may enjoy the spa as well as other recreational activities such as golf, tennis, horseback riding, skiing, water sports, etc. The spa offers a variety of treatments (massage, skin care, body, bath, hair care, nail care, make-up, etc.), fitness (exercise equipment, exercise classes) and relaxation areas (lounges, steam, sauna, whirlpool, Turkish bath, Kneipp baths, etc.). Some spa cuisine or healthy dining options are likely to be part of the resort’s F&B menu.

The profile of participating spas is as follows: Geographically 60% (36 spas) were located in the United States, 40% (24) were international/Non-U.S. In terms of the hotel size 40% are small hotels/resorts with less than 200 rooms; 33% are medium hotels/resorts with 200 – 400 rooms; 27% are large hotels/resorts with more than 400 rooms. In spa size 35% were small spas with less than 10,000 square feet of indoor spa space, 35% were medium spas with 10,000 – 20,000 square feet of indoor spa space, 31% were large spas with over 20,000 square feet of indoor spa space.

Although HFD's sample is only 60 spas, the consultants believe it is well balanced and representative of the profile of the resort-spa industry. Judy Singer and Patty Monteson, owners of HFD, plan to conduct this research on an annual basis and expect that more spas will participate, thereby adding to the number of and reliability of the benchmarks.

This study literally generated hundreds of reports regarding the industry as a whole as well as how each of the participating spas performed against the industry benchmarks. The data can be "sliced and diced" in terms of all of the following:

Geographical Location: United States, International (non-U.S.) and Global/World-Wide (all spas)

Hotel Size: Total number of hotel rooms. Small is less than 200 rooms; medium is 200 – 400 rooms; large is more than 400 rooms.

Spa Size: Total square feet (SF) of indoor space in the spa. Small is less than 10,000 SF; medium is 10,000 – 20,000 SF; large is more than 20,000 SF.

Number of Treatment Rooms: Number of revenue stations for the spa and the salon. Small is less than 10 treatment rooms; medium is 10 – 20 treatment rooms; large is more than 20 treatment rooms.

Currencies & Measurements: All data supplied by participants was in their local currency and size measurements (square feet or meters). This was converted to U.S. dollars at the current rate at the end of July 2005 and all measurements were equated to square feet.

This article pertains to the Year 2004 top-line findings and comparisons of the U.S. resort-based spas with the International/non-U.S. resort-based spas.

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