THE GLOBAL SPA ECONOMY         2007                   May 2008
THE GLOBAL SPA ECONOMY         2007The Global Spa Summit gratefully acknowledges the support of our sponsors who          ...
About Global Spa SummitThe Global Spa Summit is an international organization that brings together leaders andvisionaries ...
The Global Spa Economy 2007        Table of Contents        EXECUTIVE SUMMARY ...............................................
The Global Spa Economy 2007        Executive Summary                The Global Spa Economy 2007 is a landmark first step i...
The Global Spa Economy 2007                SRI estimates that the total size of the global spa economy in 2007 was $254.7 ...
The Global Spa Economy 2007                The size of the spa economy and its economic impacts represent an important mes...
The Global Spa Economy 2007        I.      Overview                Why study the Global Spa Economy?                SRI In...
The Global Spa Economy 2007                To conduct this study, SRI has employed an industry cluster framework that has ...
The Global Spa Economy 2007                of wellness. The concept of wellness, the healing traditions drawn upon, and th...
The Global Spa Economy 2007        II.     Analytical Framework                Estimating the size of the global spa econo...
The Global Spa Economy 2007                 Information technology is another industry that poses definitional challenges...
The Global Spa Economy 2007                define a spa as only those establishments that offer authentic water-based ther...
The Global Spa Economy 2007                these kinds of treatments. At the same time, establishments that offer traditio...
The Global Spa Economy 2007                 Hotel/Resort Spas. Similar to a day spa, but the spa facility is located with...
The Global Spa Economy 2007                investment resource planning. Industry leaders have found the cluster concept p...
The Global Spa Economy 2007                 Associated industries represent a selected set of industries that are interco...
The Global Spa Economy 2007        III. The 2007 Spa Economy                SRI estimates that the total size of the globa...
The Global Spa Economy 2007                     The Spa Industry Cluster                                                 (...
The Global Spa Economy 2007        A.         Core Spa Industries                   1.        Spa Facility Operations     ...
The Global Spa Economy 2007             Number of Spas Worldwide, by Type of Spa, 2007           In terms of numbers, day/...
The Global Spa Economy 2007                The spa industry has a strong and growing presence in all regions of the world,...
The Global Spa Economy 2007                Spa Industry Profile: Europe                 In terms of revenues, number of s...
The Global Spa Economy 2007                                          Europe’s Top Ten Spa Markets, 2007                   ...
The Global Spa Economy 2007                  Spa Industry Profile: Asia-Pacific                   Asia-Pacific is the wor...
The Global Spa Economy 2007                                         Asia’s Top Ten Spa Markets, 2007                      ...
The Global Spa Economy 2007                Spa Industry Profile: North America                 The North American spa ind...
The Global Spa Economy 2007                                         North America’s Spa Markets, 2007                     ...
The Global Spa Economy 2007                Spa Industry Profile: Middle East-North Africa                 The Middle East...
The Global Spa Economy 2007                              Middle East-North Africa’s Top Ten Spa Markets, 2007             ...
The Global Spa Economy 2007                Spa Industry Profile: Latin America-Caribbean                 Latin America-Ca...
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Gss.spa.economy.report.2008

  1. 1. THE GLOBAL SPA ECONOMY 2007 May 2008
  2. 2. THE GLOBAL SPA ECONOMY 2007The Global Spa Summit gratefully acknowledges the support of our sponsors who made the research for the Global Spa Economy possible. Raison d’Etre
  3. 3. About Global Spa SummitThe Global Spa Summit is an international organization that brings together leaders andvisionaries to positively impact and shape the future of the global spa and wellnessindustry. Founded in 2006, the organization hosts an annual Global Spa Summit wheretop industry executives gather to exchange ideas and advance industry goals. For moreinformation on the Global Spa Summit, please visit: www.globalspasummit.org.About SRI InternationalFounded in 1946 as Stanford Research Institute, SRI International is an independent, non-profit organization that performs a broad spectrum of problem-solving consulting andresearch and development services for business and government clients around the world.More information on SRI is available at: www.sri.com.CopyrightThe Global Spa Economy 2007 report is the property of the Global Spa Summit LLC. Noneof its content – in part or in whole – may be copied or reproduced without the expresswritten permission from the Global Spa Summit. Quotation of, citation from, and referenceto any of the data, findings, and research methodology from the report must be creditedto “Global Spa Summit, Global Spa Economy 2007, prepared by SRI International, May2008.” To obtain permission for copying and reproduction, or to purchase a copy of thereport, please contact the Global Spa Summit by email: research@globalspasummit.orgor through www.globalspasummit.org.
  4. 4. The Global Spa Economy 2007 Table of Contents EXECUTIVE SUMMARY ........................................................................................................ 1 I. OVERVIEW ..................................................................................................................... 4 II. ANALYTICAL FRAMEWORK .......................................................................................... 7 A. DEFINING THE SPA ECONOMY .......................................................................................................... 7 B. QUANTIFYING THE SIZE OF THE SPA ECONOMY............................................................................. 13 III. THE 2007 SPA ECONOMY ........................................................................................... 14 A. CORE SPA INDUSTRIES..................................................................................................................... 16 B. SPA-ENABLED INDUSTRIES ............................................................................................................... 35 C. ASSOCIATED SPA LIFESTYLE INDUSTRIES ........................................................................................... 38 D. ECONOMIC IMPACT OF THE SPA INDUSTRY..................................................................................... 40 IV. HOW TO USE THE FINDINGS TO MOVE THE SPA INDUSTRY FORWARD .................... 42 V. SPA ECONOMY RESEARCH AND ESTIMATION METHODOLOGY ............................... 45 A. DATA COLLECTION.......................................................................................................................... 45 B. ESTIMATION METHODOLOGIES ....................................................................................................... 47 VI. REFERENCES ................................................................................................................ 58 VII. ABOUT THE RESEARCH TEAM ..................................................................................... 62 The Global Spa Economy 2007 report was prepared by SRI International in agreement with the Global Spa Summit. The study was led by Ophelia Yeung, Director of Economics Program, and Katherine Johnston, Senior Economist, with contributions from: Nancy Chan, Economic and Technology Policy Analyst; Li Gwatkin, Senior Consultant; Fergus Murphy, Senior Economist; and Jennifer Ozawa, Senior Economist at SRI International; as well as over 50 spa industry executives around the world.Copyright Global Spa Summit 2008 SRI International
  5. 5. The Global Spa Economy 2007 Executive Summary The Global Spa Economy 2007 is a landmark first step in developing a framework to quantify the global spa industry. The objectives of this study are:  To put forward a comprehensive framework to understand and quantify the scale and impact of the global spa economy.  To develop high-level, global estimates that enable industry leaders, investors, and policymakers to make informed business and policy decisions.  To stimulate dialogue among all industry stakeholders regarding the definition, measurement, and positioning of the global spa industry going forward. The study has taken a decidedly inclusive approach in defining the term “spa” by considering its different interpretations by global businesses and consumers. For the purpose of estimating the global spa economy, this study defines spas as establishments that promote wellness through the provision of therapeutic and other professional services aimed at renewing the body, mind, and spirit. To estimate the size of the global spa economy, SRI employed an industry cluster framework that is widely used by industry and government leaders around the world for high-level strategic planning and organizing stakeholder groups for action. When viewed through this framework, the spa economy – consisting of core industries, enabled industries, and associated industries – is much larger that it may initially appear. The analytical framework is illustrated below. The Spa Industry Cluster Spa Facility Operations Beauty & Beauty Spa Capital Spa-Related Products Industry Investment Hospitality Spa & Tourism Fitness & Fitness Education Products Industry Spa Consulting Beauty & Wellness Spa Media, Medicine Industry Associations Spa-Related & Events Real Estate Healthy Foods & Spa-Branded Nutrition Industry Products Core Industries Enabled Industries Associated IndustriesCopyright Global Spa Summit 2008 1 SRI International
  6. 6. The Global Spa Economy 2007 SRI estimates that the total size of the global spa economy in 2007 was $254.7 billion. This estimate includes $60.3 billion in core spa industries and an additional $194.4 billion in spa-enabled industries, as shown in the table below. Size of the Global Spa Industry, 2007 (US$ billions) Core Spa Industries $60.31 Spa Facility Operations $46.81 Spa Capital Investments $12.99 Spa Education $0.31 Spa Consulting $0.07 Spa Media, Associations, & Events $0.13 Spa-Branded Products n.a. Spa-Enabled Industries $194.35 Spa-Related Hospitality & Tourism $106.05 Spa-Related Real Estate $88.30 Total Spa Economy $254.66 Spa facility operations represent $46.8 billion in revenues, or 78% of the “core” industry. The spa industry has been experiencing rapid growth in many regions around the world, and this growth is reflected in a significant level of capital investment, estimated at over $12.9 billion in 2007. The other “core” sectors – including education; consulting; and media, associations, and events – are relatively small by comparison, but still represent important pieces of the industry. Together, these sectors earned an estimated $0.51 billion in revenues in 2007. A significant amount of activities in the tourism and real estate sectors are influenced by the burgeoning spa, health, and wellness trend. SRI estimates that $106.0 billion in global tourism and hospitality revenues were “enabled” by the spa industry in 2007. Additionally, an estimated $88.3 billion in global real estate construction revenues were “enabled” by the spa lifestyle concept in 2007. The spa industry sits solidly within a broader set of lifestyle, health, and wellness- driven industries. The four “spa lifestyle associated industries” – those industries directly interconnected with the spa industry – represent a global market that exceeded $1 trillion in 2007. Global Spa Lifestyle Associated Industries, 2007 Global Market Size (US$ billions) Beauty and beauty products industry $500.2 Fitness and fitness products industry $241.3 Beauty and wellness medicine industry $195.8 Healthy foods and nutrition industry $162.4 Total $1,099.7Copyright Global Spa Summit 2008 2 SRI International
  7. 7. The Global Spa Economy 2007 The size of the spa economy and its economic impacts represent an important message that should be communicated for purposes of:  Advocating to government leaders that the spa industry is an important and strategic sector to be supported;  Joining industry stakeholders together to provide a stronger voice and more collaborative action;  Reaching out to consumers by allowing for flexibility in the interpretation of “spa” and inclusion of cultural and traditional contexts;  Informing investors of the opportunities that exist in the diverse and growing spa industry; and  Attracting qualified professionals to the spa industry. The SRI team has arrived at the estimates presented in this report based on a combination of primary and secondary research and economic modeling techniques, including: a global survey that collected approximately 1,000 responses; intensive research and data collection from national, international, and industry sources; and interviews with high level executives in the spa industry. Together, these lines of research were used to craft a tailored economic estimation model that attempts to quantify an industry where enormous information and data gaps exist. In essence, this study provides a snapshot of the global spa economy in 2007 for 210 economies around the world.Copyright Global Spa Summit 2008 3 SRI International
  8. 8. The Global Spa Economy 2007 I. Overview Why study the Global Spa Economy? SRI International was commissioned by the Global Spa Summit to quantify the size of the global spa economy. The objectives of this study are as follows:  To put forward a comprehensive framework to understand and quantify the scale and impact of the global spa economy.  To develop high-level, worldwide estimates that enable industry leaders, company executives, investors, and policymakers to make informed business and policy decisions based on a comprehensive, global understanding of the spa industry.  To stimulate dialogue among all industry stakeholders regarding the definition, measurement, and positioning of the global spa industry going forward. Until now, no study has attempted to measure the size of the global spa industry, due to a variety of factors, including: the diversity of the spa industry and markets across countries and regions, the difficulty of defining a “spa,” the lack of country-level information, and the difficulty of comparing data across countries. For the same reasons, even attempts to count the number of spas or estimate the size of the spa market at the country or regional level have been limited. Few industries have organized at the global level to “measure themselves” and present the worldwide economic impact of their industry. In fact, this study may be one of the first attempts of its kind. In this regard, the global spa industry has a unique opportunity to be a “pioneer” through this endeavor. What this study is This study is designed to be a landmark first step in developing a framework to quantify the global spa industry and its related economy in 210 countries. The SRI team has arrived at the estimates presented in this report based on a combination of primary and secondary research and economic modeling techniques, including: a global survey that collected approximately 1,000 responses; intensive research and data collection from national, international, and industry sources; and interviews with over 50 high-level executives in the spa industry. Together, these lines of research are used to craft a tailored economic estimation model that attempts to quantify an industry where enormous information and data gaps exist. In essence, this study provides a snapshot of the global spa economy in 2007 for 210 countries, even given the absence of data for 95% of these countries.Copyright Global Spa Summit 2008 4 SRI International
  9. 9. The Global Spa Economy 2007 To conduct this study, SRI has employed an industry cluster framework that has been widely used for more than 20 years by industry and government stakeholders around the world. The cluster methodology is widely recognized as a useful tool for high-level strategic planning, advocacy, and investment resource planning. Such an approach allows industries to organize resources, structure their collaboration, speak as one voice to policymakers and consumers, and conduct advocacy and public relations efforts more effectively and efficiently. What this study is not This study is not structured as a global spa census; it does not attempt to count the number of spas or add up their revenues across the globe. Such an approach would be both time and cost prohibitive for any organization. In fact, the SRI team is unaware of any industry that has conducted its own census at the global level – precisely for this reason. A number of high-quality national and regional spa industry studies have been conducted by various consulting groups and associations. However, each study applies different filters to quantify and “count” spas, and therefore such data is not comparable across countries and regions. Furthermore, these studies have been conducted for no more than 20 countries around the world, leaving a big gap in the current state of knowledge regarding the global spa industry, particularly for fast growing countries in Asia, Latin America, and the Middle East. To insist on a census approach would thus be paralyzing and unproductive. This study is designed as an important leap forward to provide a degree of quantification, inclusive of the 20 or so countries where some spa industry data has been collected, as well as the 190 countries in which national-level spa industry data is nonexistent. What we include as spas An inherent goal of this study is to promote the value of flexibility in defining the term “spa” and to understand its different interpretations by businesses and consumers around the world. It is with this end in mind that we put forth the following criteria for including spas in this study: For the purpose of estimating the global spa economy, this study defines spas as establishments that promote wellness through the provision of therapeutic and other professional services aimed at renewing the body, mind, and spirit. Most consumers and industry executives would agree that at its core – no matter its size, form, or business model – a spa is an establishment that focuses on the promotionCopyright Global Spa Summit 2008 5 SRI International
  10. 10. The Global Spa Economy 2007 of wellness. The concept of wellness, the healing traditions drawn upon, and the therapeutic techniques applied differ dramatically from one country to the next. Working within this framework, this study does not apply specific filters – such as requiring therapeutic treatments to be water-based, or requiring an establishment to be of a certain size or offer a certain combination of services – to define what is and what is not part of the spa industry. A major value of this approach is that it allows local, cultural, and historical wellness and healing contexts to be captured in quantifying the size and impact of the spa economy. Specifically, this study estimates the economic impact of establishments that consider themselves as “spas” and market themselves as such – as well as establishments that consumers would likely consider to be a “spa,” particularly in relation to unique cultures and traditions – regardless of strict definitions used by the industry in other contexts. What this study tells us  When viewed through the industry cluster framework, the spa industry is much larger than it may initially appear.  Given the spa industry‟s size, economic impact, and growth potential, there is a colossal need for the industry and governments to collect and maintain standardized information on the industry.  We believe that a more, rather than less, inclusive approach to defining “spa” best captures the current and future potential of the industry as it is viewed by consumers and entrepreneurs. This broader approach provides a useful umbrella under which spas will have the flexibility to apply appropriate filters in order to differentiate themselves for the purposes of marketing to particular consumer niches.Copyright Global Spa Summit 2008 6 SRI International
  11. 11. The Global Spa Economy 2007 II. Analytical Framework Estimating the size of the global spa economy requires two parallel, but interrelated, sets of inquiry, each presenting its own unique set of challenges: 1. How does one define a spa? What does the spa industry encompass? 2. How does one quantify the size of the spa industry and the economic activities related to it? The challenge of defining the spa industry itself compounds an already difficult task of measuring the economic impact of an industry that is relatively young, and for which existing data around the world is scarce. Nevertheless, the research team conducting this study has been able to gather and produce data that results in a fair approximation of the global spa industry‟s economic impact. Over time, the data and estimation methods used for this study can be refined for greater accuracy. A. Defining The Spa Economy 1. What Is A Spa? If you ask ten consumers in ten countries – say, Germany, Italy, Russia, China, Japan, Thailand, United States, Mexico, Morocco, and United Arab Emirates – what they would consider to be a spa, you are likely to get ten different answers. The inherent challenge of measuring the size and impact of the spa industry is the difficulty of defining what constitutes a “spa.” This dilemma is not unique to the spa industry.  In the tourism sector, for example, a very liberal and inclusive industry definition would include not only spending by foreign visitors, but also all transportation, retail, dining, recreation, and entertainment activities, whether these expenditures are incurred by “real” tourists or by local residents. A more restrictive definition might count only spending by foreign visitors or domestic residents taking a trip of a certain distance or duration. Within the tourism community, there is no agreed upon definition of what counts as a tourism “trip” for the purposes of measuring tourism expenditures – does a trip have to exceed 50 miles or 60 kilometers away from home to be counted, or does it have to involve an overnight stay? Tourism statistics are produced by governments, nonprofits, international organizations, and private research firms around the world, and each organization approaches these definitional questions in a slightly different way.Copyright Global Spa Summit 2008 7 SRI International
  12. 12. The Global Spa Economy 2007  Information technology is another industry that poses definitional challenges. For some studies, the IT industry encompasses all activities that might be considered “high-tech” – it might include computer equipment and peripherals, semiconductors, electronics, computer programming and design, IT consulting, telecommunications equipment and services, and much more. On the other hand, some studies may exclude the manufacturing of “hardware” such as computers, electronics, and telecommunications devices – as these activities are becoming increasingly “commoditized” and “low-tech” – and instead focus only on the higher value- added services side of IT (such as programming, design, consulting, etc.). The definition of the IT industry changes constantly, depending on the geographic region being studied, the organization conducting the study, and the purpose and objectives of the study. For the spa industry, the definitional challenge is especially complex because the term “spa” can incorporate many elements and is open to interpretation by spa operators, consumers, and policymakers alike. While “spa” may be viewed as a relatively young industry in its modern, Western archetype, its association with wellness and healing links the industry to traditions and practices that date back thousands of years in some cultures around the world. As economies and cultures become globalized, the blending of modern and traditional therapeutic disciplines, and the melding of the science and heritage of healing, have enriched the spa industry and increased consumer recognition, even as this process creates challenges for the industry to define or measure itself. There is an ongoing, but perhaps healthy, tension among industry operators on the definition of a spa. Currently the term “spa” is defined in a variety of ways, both across different countries and regions and even within countries. Even the linguistic origin of the word “spa” seems to be debated. Below we explore some of the existing views and debates on what is a spa. Using water-based or not as a definition The linguistic origin of the term “spa” and whether the word is related to water is unclear. According to some researchers, the term was derived from the name of a Belgian town where mineral springs were used for healing purposes since medieval times. According to some others, the word “spa” is an acronym of various Latin phrases that mean “health through water.” A few other accounts trace the word to the old Walloon word espa, meaning “fountain.”1 It is true that in many cultures spas are closely tied to therapeutic treatments associated with water. Therefore, some would 1Jonathan Paul De Vierville, “Spa Industry, Culture, and Evolution,” Massage and Bodywork Magazine, August- September 2003, www.massageandbodywork.com/Articles/AugSep2003/Cultureandevolution.html.Copyright Global Spa Summit 2008 8 SRI International
  13. 13. The Global Spa Economy 2007 define a spa as only those establishments that offer authentic water-based therapeutic treatments, prescribed and/or supervised by doctors or qualified professionals, in a healing and relaxing setting. However, establishments have proliferated around the world that offer a menu of services (including massage, body, and/or facial treatments) that do not involve water-based therapies, and these establishments are more often than not considered to be spas by the business operators and their consumers. Using size and services to identify spas for benchmarking For the purposes of benchmarking or conducting industry censuses or counts, many organizations have chosen to define a spa by its size (e.g., an establishment must have at least five treatment rooms to be included as a benchmark) or by the types of treatments offered (e.g., an establishment must provide more than one type of spa service – facial treatments, body treatments, massage, or water-based therapeutic treatments – to be included in the count). It should be noted that a number of establishments that consumers around the world may consider to be “spas” may not meet these criteria. For example, a small salon that has only four treatment rooms and only offers facial treatments would be considered a “spa” by many consumers, but may not be counted in benchmarking studies or censuses that use a size-based or service-based definition. Using an exclusive versus democratic (or mass market) definition The proliferation of day spas, “value” spa chains, new business models such as mobile spas, and the expansion/crossover of health clubs and beauty salons into the spa industry have raised concerns about service quality and image amongst some in the industry. On the high end of the market are the “brand name” and exclusive spas, which offer ambience, luxury facilities, and high-quality service delivered by well- trained staff at prices aimed at upscale consumers. On the other end of the market are establishments that offer services for a fraction of the price, aimed at the mass market and consumers seeking those price points. They may specialize and offer only one type of service, such as massage. These market developments raise questions about who should be qualified to use the term “spa” for marketing and promotion purposes. Defining spas in the local, cultural, and historical context Rising levels of income, education, and sophistication among travelers and consumers worldwide have dramatically elevated the consciousness and desirability of treatments that are derived from historical and culturally based healing traditions, techniques, and ingredients. The market potential of this development is being captured by global, premium-brand spas that have expanded their service menus to incorporateCopyright Global Spa Summit 2008 9 SRI International
  14. 14. The Global Spa Economy 2007 these kinds of treatments. At the same time, establishments that offer traditional bathing, healing, herbal, and therapeutic treatments derived from centuries-old practices also recognize the potential of branding themselves as spas, and some are investing in new services, equipment, facilities, as well as modifying their ambience. European bath houses and saunas, Japanese onsens, Turkish-style hammams, Indian ayurveda centers, and Thai massage establishments do not necessarily fit the traditional Western concept or business model of spas, but a certain portion of these have begun and will continue to cross over to the spa market as they evolve and adapt to the needs and desires of modern consumers. Taking into account these emerging market trends, and for the benefit of the industry, this study has adopted a decidedly inclusive approach in its estimation of the global spa economy. As stated above, an inherent goal of this study is to promote the value of flexibility in defining the term “spa” and to understand its different interpretations by businesses and consumers around the world. Spa Typologies Working within this framework, the global spa economy model captures five general categories, or “typologies,” of spas, as described below.  Day/Club/Salon Spas. Facilities that offer a variety of spa services (e.g., massage, facials, body treatments, etc.) by trained professionals on a day-use basis. They typically offer private treatment rooms and a quiet and peaceful atmosphere. Club spas are similar to day spas, but operate out of facilities whose primary purpose is fitness. Salon spas are also similar in nature, but operate out of facilities that provide beauty services (such as hair, make-up, nails, etc.).  Destination Spas and Health Resorts. Offer a full-immersion spa experience in which all guests participate. All-inclusive programs provide various spa and body treatments along with a myriad of other offerings such as: fitness activities, healthy cuisine, educational classes, nutrition counseling, weight loss programs, preventive or curative medical services, mind/body/spirit offerings, etc. Because of their similar business structures (e.g., overnight stays in which all guests participate in full-immersion spa and wellness-based activities), this report includes traditional European-style health resorts and Indian ayurvedic resorts in the same category as destination spas.2 2The estimation methodology counts all revenues and employment for these properties as being part of the spa economy, including room revenues, food and beverage revenues, and other non-spa service revenues.Copyright Global Spa Summit 2008 10 SRI International
  15. 15. The Global Spa Economy 2007  Hotel/Resort Spas. Similar to a day spa, but the spa facility is located within a resort or hotel property. Unlike destination spas, at hotel/resort spas services are typically paid for on an à la carte basis, and meals are not included. Spa treatments and services generally complement a hotel stay or a wide range of other activities at a resort.  Medical Spas. A spa facility that operates under the full-time, on-site supervision of a licensed healthcare professional. Provides comprehensive medical and/or wellness care in an environment that integrates spa services with traditional or alternative medical therapies and treatments.  “Other” Spas. This category encompasses all other spas that are not captured by the categories described above, including the following:  Historically-/Culturally-Based Spas. These spa facilities vary from country-to- country and have spun out of historical healing traditions, techniques, and ingredients, such as: European bath houses and saunas, Japanese onsens and sentos, Turkish-style hammams, Indian ayurveda centers, Thai massage establishments, Chinese medicine/massage practitioners, etc. This study attempts to capture the portion of such facilities that have evolved into spas by adding spa-like services (e.g., massage, facials, body treatments, wellness education, etc.).  Mobile Spas. Professional practitioners provide spa services on-site at a customer‟s home or office.  Single Service Spas. Similar to a day/club/salon spa, but specializes in providing only one type of spa service (e.g., just massage or just facial treatments).  Cruise Ship Spas. Similar to a hotel/resort spa, but located on board a cruise ship.  Mineral/Hot Springs Spas. A day-use spa facility with an on-site source of natural mineral, thermal, or sea water that is used in spa treatments. “Stay” spas that use an on-site source of mineral, thermal, or sea water for treatments are classified as hotel/resort spas or destination spas/health resorts, depending on their characteristics. 2. The Spa Industry Cluster In this study of the global spa economy, SRI has employed an industry cluster framework that has been widely used since the 1980s by industry and government stakeholders around the world. The industry cluster concept is recognized as a useful analytical and organizing mechanism for high-level strategic planning, advocacy, andCopyright Global Spa Summit 2008 11 SRI International
  16. 16. The Global Spa Economy 2007 investment resource planning. Industry leaders have found the cluster concept powerful because it links together a broad cross-section of businesses and organizations that are interconnected economically to relate to each other within a coherent framework. Such an approach allows industries to organize resources, structure their collaboration, speak as one voice to policymakers and consumers, and conduct advocacy and public relations efforts more effectively and efficiently. When viewed through this framework, the spa industry cluster is much larger than it may initially appear. In order to estimate the size of the global spa economy, SRI has defined and delineated the specific businesses and industry segments that comprise the spa industry cluster. The spa industry cluster framework – or how these industry segments relate to one another – is illustrated in the following diagram. The Spa Industry Cluster Spa Facility Operations Beauty & Beauty Spa Capital Spa-Related Products Industry Investment Hospitality Spa & Tourism Fitness & Fitness Education Products Industry Spa Consulting Beauty & Wellness Spa Media, Medicine Industry Associations Spa-Related & Events Real Estate Healthy Foods & Spa-Branded Nutrition Industry Products Core Industries Enabled Industries Associated Industries The spa industry cluster consists of core, enabled, and associated industries:  Core industries include spa facility operations; spa capital investments (e.g., construction of new spas, spa renovations and expansions, etc.); spa consulting; spa education; spa media, events, and associations; and spa-branded products.  Enabled industries are directly induced by the core spa industry and include spa- related tourism and spa-related real estate.Copyright Global Spa Summit 2008 12 SRI International
  17. 17. The Global Spa Economy 2007  Associated industries represent a selected set of industries that are interconnected with the spa industry through a common emphasis on health and wellness, and, to some extent, common sales and marketing channels. Associated industries are closely related to the spa industry, but not strictly a part of it; they are directly promoted by the spa industry, and, in turn, the spa industry is promoted by them. Associated industries include: beauty and beauty products; fitness and fitness products; beauty and wellness medicine; and healthy foods and nutrition. B. Quantifying The Size Of The Spa Economy Determining what is included in the spa industry is only the first step in estimating the size of the global spa economy. Quantifying the size of the spa industry is an ambitious endeavor that poses another set of challenges:  There is a dearth of data on the spa industry for the majority of countries around the world.  Within the traditional industry classification frameworks used by national governments and international organizations, it is not possible to separate spas from other related beauty, fitness, tourism, and medical industries. Therefore, conventional public sector data sources are of limited use when conducting research of this nature.  A number of high-quality spa industry studies have been conducted, but these studies cover no more than 20 countries around the world. Big data and research gaps exist for the fast-growing countries in Asia, Latin America, and the Middle East. Furthermore, each of these studies utilizes different methodologies for qualifying and quantifying spas, making it difficult to compare one study‟s findings to another. Faced with these challenges, the SRI team pursued multiple lines of inquiry gather data from primary and secondary sources, including: a global survey that collected approximately 1,000 responses; national and international-level qualitative and quantitative data and reports; existing spa industry reports; and over 50 high-level executive interviews. These inputs were used to create a consistent and comparable estimation model to quantify the spa industry in 210 countries, including those where major data gaps exist. An important lesson that emerged from this exercise is the colossal need for the industry and governments to collect and maintain information on the spa industry. It is the hope of the research team that this small step is a productive one for the industry.Copyright Global Spa Summit 2008 13 SRI International
  18. 18. The Global Spa Economy 2007 III. The 2007 Spa Economy SRI estimates that the total size of the global spa economy was $254.7 billion in 2007. This estimate includes $60.3 billion in core spa industries and an additional $194.4 billion in spa-enabled industries, as shown in the table below. Size of the Global Spa Industry, 2007 (US$ billions) Core Spa Industries $60.31 Spa Facility Operations $46.81 Spa Capital Investments $12.99 Spa Education $0.31 Spa Consulting $0.07 Spa Media, Associations, & Events $0.13 Spa-Branded Products n.a. Spa-Enabled Industries $194.35 Spa-Related Hospitality & Tourism $106.05 Spa-Related Real Estate $88.30 Total Spa Economy $254.66 Spa facility operations represent $46.8 billion in revenues, or 78% of the “core” industry. The spa industry has been experiencing rapid growth in many regions around the world, and this growth is reflected in a significant level of capital investment, estimated at over $12.9 billion in 2007. The other “core” sectors – including education; consulting; and media, associations, and events – are relatively small by comparison, but still represent important pieces of the industry. Together, these sectors earned an estimated $0.51 billion in revenues in 2007. A significant amount of activities in the tourism and real estate sectors are influenced by the burgeoning spa, health, and wellness trend. SRI estimates that $106.0 billion in global tourism and hospitality revenues were “enabled” by the spa industry in 2007. Additionally, an estimated $88.3 billion in global real estate construction revenues were “enabled” by the spa lifestyle concept in 2007. The spa industry sits solidly within a broader set of lifestyle, health, and wellness- driven industries. Four “spa lifestyle associated industries” have been identified in this study as being directly interconnected with the spa industry. As shown in the following diagram, these four associated industries represent a global market that exceeded $1 trillion in 2007.Copyright Global Spa Summit 2008 14 SRI International
  19. 19. The Global Spa Economy 2007 The Spa Industry Cluster (US$ billions) Spa Facility Operations $46.81 Beauty & Beauty Products Industry Spa Capital Spa-Related $500.21 Investment Hospitality $12.99 & Tourism Fitness & Fitness Spa $106.05 Products Industry Education $0.31 $241.27 Spa Consulting Beauty & Wellness Spa Media, $0.07 Medicine Industry Associations Spa-Related $195.84 & Events Real Estate $0.13 $88.30 Healthy Foods & Spa-Branded Products Nutrition Industry n.a. $162.35 Core Industries Enabled Industries Associated Industries $60.31 $194.35 $1,099.68 Spas are a sizable global industry when compared to other higher profile recreation and leisure industries. With spa facility operations earning nearly $47 billion globally, the spa industry is smaller than the more established golf and commercial sports industries. However, the spa industry is significantly larger than the global motion picture industry as measured by box office sales, as well as the global cruise industry. Comparison of Spas with Other Global Industries (US$ billions) Core Spa Industries $60 Commercial Sports Industry3 $150 Golf Industry (golf facility operations)4 $80 Motion Picture Industry (box office sales)5 $27 Cruise Industry6 $21 3 Parker, Philip M., The 2007-2012 World Outlook for Commercial Sports, ICON Group Ltd.: 2006. 4 Estimated by SRI International. 5 Motion Picture Association of America, Theatrical Market Statistics 2007. 6 Business Research & Economic Advisors, The Contribution of the North American Cruise Industry to the U.S. Economy in 2006, Prepared for Cruise Lines International Association, August 2006.Copyright Global Spa Summit 2008 15 SRI International
  20. 20. The Global Spa Economy 2007 A. Core Spa Industries 1. Spa Facility Operations Spa facility operations represent the core of the spa economy. They include the wide variety of services offered at spas – including massages, facials, body treatments, salon services, water-based treatments, health assessments, and much more – as well as sales of products at spas. In 2007 there were an estimated 71,762 spas operating around the world, including:  45,113 day/club/salon spas;  11,489 hotel/resort spas;  1,485 destination spas and health resorts;  4,274 medical spas; and  9,310 “other” spas.7 Together, these spas generated an estimated $46.8 billion in revenues and employed an estimated 1.2 million persons in 2007. Global Spa Facilities by Type, 2007 Estimated Total Estimated Total Estimated Total Spa Revenues Number of Spas Spa Employment (US$ billions) Day/Club/Salon Spas 45,113 $21.0 659,106 Hotel/Resort Spas 11,489 $12.6 269,363 Destination Spas & Health Resorts 1,485 $6.2 112,239 Medical Spas 4,274 $4.6 51,843 Other Spas 9,310 $2.4 130,958 Total 71,672 $46.8 1,223,510 Global Distribution of Spas, by Type of Spa, 2007 7 Definitions of each type of spa are provided in section II of this report.Copyright Global Spa Summit 2008 16 SRI International
  21. 21. The Global Spa Economy 2007 Number of Spas Worldwide, by Type of Spa, 2007 In terms of numbers, day/club/salon spas comprise the majority of spas around the Destination Hotel/Resort world, accounting for about 63% of all spa Spas Spas & Health Resorts (11,489) 16.0% facilities. At 16%, hotel/resort spas are (1,485) 2.1% second in terms of numbers. Other spas, Medical Spas (4,274) 6.0% medical spas, and destination spas/health resorts are smallest in terms of numbers, at Other Spas Day/Club/Salon 13%, 6%, and 2%, respectively. (9,310) 13.0% Spas (45,113) 62.9% In terms of revenues, however, hotel/resort spas and destination spas/health resorts account for a much larger share of the market Revenues of Spas Worldwide, by Type of Spa, 2007 as compared to their overall number of facilities. This is because these types of spas typically have much higher average revenues Hotel/Resort per facility than do day/club/salon spas. Spas ($12.6) 26.9% Day/club/salon spas account for only about Day/Club/Salon 45% of global revenues (as compared to Spas ($21.0) 44.9% 63% of global facilities). They are closely Destination followed by hotel/resort spas and destination Spas & Health Resorts spas/health resorts, which together account ($6.2) 13.2% for 40% of global revenues. Medical spas, Medical Spas Other Spas which also have higher average revenues per ($4.6) 9.9% ($2.4) 5.1% (US$ billions) facility, account for 10% of global revenues, Employment by Spas Worldwide, by Type of Spa, 2007 but only 6% of facilities. Other spas tend to be smaller in size and comprise only 5% of global industry revenues. Hotel/Resort Spas (269,363) 22.0% A little over half of all spa employees around the world work in day/club/salon spas. Destination Spas & Health Hotel/resort spas also account for a large Resorts Day/Club/Salon (112,239) 9.2% Spas share of industry employment, with 22% of (659,106) 53.9% Medical Spas the workforce. This is followed by destination (51,843) 4.2% spas/health resorts, with 9% of employment, Other Spas (130,958) 10.7% and other and medical spas (with 11% and 4% of employment, respectively).Copyright Global Spa Summit 2008 17 SRI International
  22. 22. The Global Spa Economy 2007 The spa industry has a strong and growing presence in all regions of the world, but it is also heavily concentrated in a few regions and countries. Together, Europe, North America, and Asia-Pacific account for over 90% of industry revenues. Global Spa Facilities by Region, 2007 Estimated Total Spa Estimated Total Estimated Total Spa Revenues Number of Spas Employment (US$ billions) Europe 22,607 $18.4 441,727 Asia-Pacific 21,566 $11.4 363,648 North America 20,662 $13.5 307,229 Middle East-North Africa 1,014 $0.7 20,938 Latin America-Caribbean 5,435 $2.5 82,694 Africa 389 $0.3 7,273 Total 71,672 $46.8 1,223,510 Among the world‟s top 20 largest spa-going countries in terms of revenues, all are located within the three top regions (as shown in the table above), with the exception of Mexico and Argentina. The five largest countries in terms of revenue (United States, Japan, Germany, France, Italy) account for over 55% of industry revenues worldwide. The twenty largest countries, as shown in the table below, account for 85% of world revenues. Eleven countries in the world have spa revenues over $1 billion annually. Top 20 Spa Countries, 2007 Estimated Total Spa Estimated Total Estimated Total Spa Revenues Number of Spas Employment (US$ billions) United States 17,845 $12.06 275,788 Japan 6,442 $5.67 104,246 Germany 3,971 $3.84 86,917 France 2,746 $2.30 54,430 Italy 2,391 $2.24 50,942 United Kingdom 2,468 $1.72 43,835 China 4,518 $1.72 82,113 Spain 1,816 $1.53 34,637 Canada 2,817 $1.46 31,441 South Korea 2,465 $1.26 31,974 Austria 999 $1.22 24,072 Mexico 1,855 $0.87 29,793 Russia 1,625 $0.82 30,653 Switzerland 555 $0.70 14,307 Australia 674 $0.44 6,938 Greece 474 $0.43 9,515 Argentina 1,168 $0.42 14,246 Thailand 1,401 $0.39 48,680 India 2,359 $0.38 22,175 Hong Kong 578 $0.37 9,793Copyright Global Spa Summit 2008 18 SRI International
  23. 23. The Global Spa Economy 2007 Spa Industry Profile: Europe  In terms of revenues, number of spas, and employment, Europe is the largest regional spa market in the world. It had an estimated 22,607 spas in 2007, earning $18.4 billion in revenues and employing 441,727 people.  Europe‟s massive spa market has evolved from bathing and wellness traditions that date back to medieval, and even Roman, times. The region has a deep-rooted spa and wellness culture that emphasizes the use of natural and water-based elements for therapeutic, curative, and preventive treatments.  In Europe, the “other” spas category primarily captures the extensive bath house and sauna facilities that are especially prevalent in northern and eastern European countries and in the former Soviet Bloc. A selected portion of these facilities in each country is estimated to have crossed over into the spa industry by adding spa facilities and services. Because they are smaller-sized establishments, these spas represent approximately 2% of European spa market revenues.  Europe is also unique in that it is home to a large number of health resorts that emphasize wellness, traditional healing therapies, and medically-based services. For instance, in Russia and eastern Europe, there are hundreds, or even thousands, of sanatoriums dating from the Soviet era, which offer wellness-based healing/medical services and frequently require a long-term stay. A large portion of these sanatoriums – many of which were state-owned or subsidized and have a hospital-like atmosphere – are now out-moded or even closed down. However, a small number are being modernized and re-cast as higher-end health resorts and are crossing over into the spa industry. Overall, health resorts and destination spas represent an estimated 27% of European spa industry revenues. Spa Facilities in Europe, 2007 Estimated Total Estimated Total Estimated Total Spa Revenues Number of Spas Spa Employment (US$ billions) Day/Club/Salon Spas 14,933 $7.55 237,473 Hotel/Resort Spas 4,297 $4.61 84,117 Destination Spas/Health Resorts 1,202 $4.93 91,962 Medical Spas 913 $0.87 9,248 Other Spas 1,262 $0.39 18,927 Total 22,607 $18.35 441,727Copyright Global Spa Summit 2008 19 SRI International
  24. 24. The Global Spa Economy 2007 Europe’s Top Ten Spa Markets, 2007 Estimated Total Estimated Total Spa Revenues Number of Spas (US$ millions) Germany 3,971 $3,842.7 France 2,746 $2,299.0 Italy 2,391 $2,237.5 United Kingdom 2,468 $1,724.0 Spain 1,816 $1,527.0 Austria 999 $1,220.8 Russia 1,625 $823.4 Switzerland 555 $701.9 Greece 474 $426.8 Netherlands 507 $366.1 “Typical” European Spas  As a region, Europe encompasses a wide range of countries at vastly different levels of income and development. PPP GDP per capita8 in Europe ranges from under $2,000 in some of the former Soviet countries to over $60,000 in the most wealthy western and northern European countries. Because of the heterogeneity of the European market, typical spa sizes vary dramatically across different countries within the region.  Average day/club/salon spas are assumed to range in size from $125,000 to $660,000 in revenues and from 5 to 25 employees.  The “other” spas category, which primarily captures establishments that have their roots in Europe‟s sauna and bath house traditions, are estimated to be to be slightly smaller than day/club/salon spas.  Typical medical spas are estimated at $320,000 to $1.2 million, with 4 to 12 employees.  Average hotel/resort spa revenues range from $450,000 to $1.5 million and from 10 to 24 employees across different countries in the region.  Destination spas and health resorts are comparatively larger, because the entire revenues and employment of these facilities (including lodging, food, spa, and all other services) are counted as part of the spa economy. On average, they range from $1.5 to $5.5 million and 30 to 100 employees. Country Coverage: The data presented here covers a total of 52 countries across western, eastern, and central Europe, as well as the former Soviet Union, including: Albania, Andorra, Armenia, Austria, Azerbaijan, Belarus, Belgium, Bosnia-Herzegovina, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Georgia, Germany, Greece, Hungary, Iceland, Ireland, Italy, Kazakhstan, Kyrgyzstan, Latvia, Liechtenstein, Lithuania, Luxembourg, Macedonia, Malta, Moldova, Monaco, Netherlands, Norway, Poland, Portugal, Romania, Russia, San Marino, Serbia & Montenegro, Slovakia, Slovenia, Spain, Sweden, Switzerland, Tajikistan, Turkey, Turkmenistan, Ukraine, United Kingdom, Uzbekistan. 8 Purchasing power parity GDP per capita is the GDP per capita adjusted according to the cost of goods and services in each country, allowing for a more accurate comparison of the standard of living across countries.Copyright Global Spa Summit 2008 20 SRI International
  25. 25. The Global Spa Economy 2007 Spa Industry Profile: Asia-Pacific  Asia-Pacific is the world‟s third largest spa market in terms of revenues and second largest market in terms of number of spas. The industry size is estimated at $11.4 billion in 2007, with 21,566 spas and 363,648 employees.  Spas are a relatively new, but high growth industry in Asia-Pacific. Across the region – and especially in the emerging market countries of south/southeast Asia and the Pacific islands – the market is typically dominated by large hotel/resort spas catering to international tourists. However, some of the middle and upper income countries (namely, Japan, Korea, Hong Kong, Singapore, Australia, and New Zealand) also have a significant day/club/salon spa sector serving the local market. Medical spas are a new, but rapidly growing sector in parts of Asia, linked with a rising interest in medical tourism in the region.  While the Asian spa industry is considered to be “new” based on its modern/Western conceptualization, the region has a remarkable number of culturally-based healing and wellness therapies that have evolved over thousands of years. Facilities and practitioners that offer these traditional services are beginning to see the value of adding spa services and amenities and aligning themselves with the spa industry. The “other” spas category for Asia-Pacific attempts to capture this trend by quantifying the number of traditional practitioners that have crossed into the spa market. These traditions vary from country-to-country and include: onsens and sentos in Japan, bath houses in Korea, ayurveda centers in India, Thai massage practitioners in Thailand, Chinese medicine/massage practitioners in China and other southeast Asian countries, and so on. These “emerging” spas represent an estimated 13% of industry revenues in Asia-Pacific. Spa Facilities in Asia-Pacific, 2007 Estimated Total Estimated Total Estimated Total Spa Revenues Number of Spas Spa Employment (US$ billions) Day/Club/Salon Spas 10,805 $5.57 162,733 Hotel/Resort Spas 2,944 $3.04 80,162 Destination Spas/Health Resorts 82* $0.28 3,937 Medical Spas 939 $1.05 12,430 Other Spas 6,796 $1.44 104,387 Total 21,566 $11.39 363,648 *This figure is larger than might be expected because it includes a number of health resorts in Australia and New Zealand, as well as ayurvedic resorts in India.Copyright Global Spa Summit 2008 21 SRI International
  26. 26. The Global Spa Economy 2007 Asia’s Top Ten Spa Markets, 2007 Estimated Total Estimated Total Spa Revenues Number of Spas (US$ millions) Japan 6,442 $5,668.0 China 4,518 $1,718.7 South Korea 2,465 $1,255.7 Australia 674 $440.2 Thailand 1,401 $393.8 India 2,359 $383.9 Hong Kong 578 $374.3 Singapore 553 $329.8 Taiwan 587 $247.7 Indonesia 878 $164.6 “Typical” Asian Spas  Asia-Pacific has a handful of developed/wealthy economies with per capita PPP GDPs in the $30,000 to $45,000 range (such as Australia, New Zealand, Hong Kong, Japan, and Singapore), along with a large number of low income countries with incomes of $1,500 to $3,000. Average spa sizes and revenues vary accordingly.  “Typical” day/club/salon spas in Asia-Pacific range from $75,000 to $800,000 of revenues and 6 to 25 employees, depending on a country‟s level of development.  “Other” spas include Japanese onsens, Indian ayurveda centers, Thai and Chinese massage practitioners, and other culturally-rooted wellness traditions that have morphed into spas. They are typically estimated to be two-thirds to one-half the size of day/club/salon spas.  Asian hotel/resort spa revenues are comparable to those in other high income regions due to a concentration of wealthy clientele among locals and tourists. This sector is segmented by upscale, globally branded spas and mid-range hotel/resort spas serving a growing local middle class market in countries such as China and India. Average Asian hotel/resort spa revenues are assumed to be $250,000 to $2.2 million, with 10 to 37 employees.  Most destination spas and health resorts are estimated at $1 million to $5 million and 30-125 employees (including lodging and food in addition to spa services). At the high end of the market are a handful of premier destination spas with revenues upwards of $20 million. At the low end of the market are a significant number of ayurveda-based spa resorts in India that cater to both the local and foreign market.  Asian medical spas are estimated to range, on average, from $750,000 to $1.3 million, and 10 to 17 employees. They are a relatively new portion of the market in Asia and are assumed to be located only in the higher income countries. Country Coverage: This data encompasses 43 countries across the Asia-Pacific region: American Samoa, Australia, Bangladesh, Bhutan, Brunei, Cambodia, China, Fiji, French Polynesia, Guam, Hong Kong, India, Indonesia, Japan, Kiribati, Laos, Macau, Malaysia, Maldives, Marshall Islands, Micronesia, Mongolia, Myanmar, Nepal, New Caledonia, New Zealand, North Korea, Northern Mariana Islands, Pakistan, Palau, Papua New Guinea, Philippines, Samoa, Singapore, Solomon Islands, South Korea, Sri Lanka, Taiwan, Thailand, Timor-Leste, Tonga, Vanuatu, Vietnam.Copyright Global Spa Summit 2008 22 SRI International
  27. 27. The Global Spa Economy 2007 Spa Industry Profile: North America  The North American spa industry ranks second in the world in terms of revenues and third in the world in terms of the number of spas. The region‟s estimated 20,662 spas had approximately $13.5 billion in revenues and 307,229 employees in 2007.  The North American market is dominated by day/club/salon spas and hotel/resort spas, which together comprise nearly 75% of industry revenues in the region.  Both the United States and Canada have highly-developed spa markets, but industry segments continue to grow and new business models continue to emerge in both countries. An increasing number of mobile establishments are offering spa services on the premises of a customer‟s home or office. There is also a growing number of establishments that specialize in a single spa service, such as massage or facials, and cater to “entry-level” spa-goers at lower price points. While these establishments may not be considered as true “spas” under strict industry definitions, they are helping to bring the spa concept to a broader portion of the consumer market. The “other” spas category in North America captures these emerging specialty spas, as well as cruise ship spas. This category represented about 4% of industry revenues in 2007. Spa Facilities in North America, 2007 Estimated Total Estimated Total Estimated Total Spa Revenues Number of Spas Spa Employment (US$ billions) Day/Club/Salon Spas 15,355 $6.67 201,272 Hotel/Resort Spas 2,090 $3.32 61,945 Destination Spas/Health Resorts 138 $0.61 11,281 Medical Spas 2,081 $2.39 26,332 Other Spas 998 $0.54 6,400 Total 20,662 $13.53 307,229Copyright Global Spa Summit 2008 23 SRI International
  28. 28. The Global Spa Economy 2007 North America’s Spa Markets, 2007 Estimated Total Estimated Total Spa Revenues Number of Spas (US$ millions) United States 17,845 $12,063.2 Canada 2,817 $1,462.2 “Typical” North American Spas  Average incomes in the United States and Canada are among the highest in the world, and average spa revenues are accordingly quite high as compared to those in developing and middle-income countries.  Day/club/salon spas are estimated to range, on average, from $200,000 to $500,000 in revenues, and larger establishments may exceed $1 million in revenues. They typically range from 8 to 15 employees.  The North American market continues to pioneer new business models, such as “value” spa chains and mobile spas, which are proliferating rapidly. The “other” spas category primarily captures these establishments, which tend to be slightly smaller than day/club/salon spas, typically ranging from $100,000 to $400,000 of revenues and from 5 to 10 employees.  Average hotel/resort spas in North America earn $850,000 to $1.8 million in revenues, with 11 to 35 employees.  Destination spas and health resorts can range from $2.5 million to $20 million and upwards, and from 40 to 100+ employees.  Medical spas are an increasing portion of the North American market (representing 18% of revenues). They are estimated to earn an average of $1.2 million annually and have 12 to 15 employees. Country Coverage: For this study, the North American region includes the United States and Canada.Copyright Global Spa Summit 2008 24 SRI International
  29. 29. The Global Spa Economy 2007 Spa Industry Profile: Middle East-North Africa  The Middle East and North Africa had approximately 1,014 spas, earning about $747 million in revenues and employing 20,938 persons in 2007.  The spa industry in Middle East-North Africa differs significantly from that of other regions in that it is dominated by the hotel/resort spa sector. Hotel/resort spas represent over 60% of industry revenues in the Middle East, as compared to 25% in North America, Europe, and Asia-Pacific. Day/club/salon spas are still a comparatively small portion of the industry in the Middle East and North Africa, with 19% of revenues in 2007.  The Middle East has a historic bathing tradition linked with hammams or Turkish baths, which have their roots in the early days of Islam and which were derived from Roman and Greek bathing traditions. Like other culturally-rooted wellness traditions and therapies around the world, the hammams have many synergies with the spa industry, and some are beginning to add upgraded spa facilities and services. Conversely, many traditional day spas and hotel/resorts spas are adding a cultural element to their services by offering specialized treatments that are grounded in hammam bathing traditions. The “other” spas category in the Middle East region attempts to quantify the traditional hammams and bath houses that have crossed over to the spa sector – this category represented just over 1% of industry revenues in 2007. Spa Facilities in Middle East-North Africa, 2007 Estimated Total Estimated Total Estimated Total Spa Revenues Number of Spas Spa Employment (US$ billions) Day/Club/Salon Spas 440 $0.14 6,259 Hotel/Resort Spas 441 $0.45 12,554 Destination Spas/Health Resorts 7 $0.11 1,300 Medical Spas 26 $0.03 331 Other Spas 99 $0.01 494 Total 1,014 $0.75 20,938Copyright Global Spa Summit 2008 25 SRI International
  30. 30. The Global Spa Economy 2007 Middle East-North Africa’s Top Ten Spa Markets, 2007 Estimated Total Estimated Total Spa Revenues Number of Spas (US$ millions) United Arab Emirates 212 $267.9 Israel 190 $116.2 Tunisia 41 $86.2 Saudi Arabia 96 $52.4 Egypt 146 $43.7 Oman 25 $32.1 Morocco 79 $30.8 Bahrain 24 $27.4 Kuwait 33 $22.2 Qatar 19 $19.9 “Typical” Middle Eastern-North African Spas  The Middle East-North Africa region is split between a handful of wealthy Gulf countries (most with PPP GDPs per capita in the range of $20,000 to $30,000), along with a number of low-to-middle income countries (with per capita incomes of $4,000 to $8,000). Because the Middle East spa market is dominated by hotel/resort spas catering to international tourists, average spa revenues and sizes are somewhat less tied to country income levels than they are in other countries around the world.  The average hotel/resort spa in the region is estimated to range from $500,000 to $1.5 million and have 14 to 43 employees. There are also a small number of very high-end destination spas, health resorts, and thalassotherapy resorts that average $10 to 15 million of revenues and 150+ employees.  Typical day/club/salon spas are estimated to average from $125,000 to $550,000 of revenues and from 7 to 28 employees.  In the Middle East, the “other” spas category captures establishments that have evolved from the hammam and Turkish bath tradition. They are assumed to be about one-half to one-quarter of the size of day/club/salon spas.  There are a handful of medical spas serving a wealthy clientele in the Gulf countries. These spas are estimated to average $1 million of revenues and 13 employees. Country Coverage: The Middle East-North Africa region includes 20 countries: Afghanistan, Algeria, Bahrain, Egypt, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Qatar, Saudi Arabia, Syria, Tunisia, United Arab Emirates, West Bank and Gaza, Yemen.Copyright Global Spa Summit 2008 26 SRI International
  31. 31. The Global Spa Economy 2007 Spa Industry Profile: Latin America-Caribbean  Latin America-Caribbean is the fourth largest spa region in the world, but its industry is significantly smaller than those of the top three regions (Europe, North America, and Asia-Pacific). It had an estimated 5,435 spas, with revenues of $2.5 billion and employment of 82,694 persons in 2007.  The spa market in Latin America-Caribbean is evenly split between day/club/salon spas and hotel/resort spas, each accounting for about 39-40% of industry revenues in 2007.  The Andes region, stretching from Panama in the north to the Patagonia region in southern Chile and Argentina, is home to thousands of hot/thermal springs. Many of these springs have been developed into resorts and bathing facilities, primarily catering to local and regional tourists. While many are very basic, a portion of these establishments offer a higher grade of services, amenities, and accommodations and have crossed over to the spa industry. The “other” spas category in Latin America-Caribbean quantifies this very small sector of the industry, which accounted for less than 1% of overall industry revenues in 2007. Spa Facilities in Latin America-Caribbean, 2007 Estimated Total Estimated Total Estimated Total Spa Revenues Number of Spas Spa Employment (US$ billions) Day/Club/Salon Spas 3,381 $1.00 48,480 Hotel/Resort Spas 1,539 $0.99 26,571 Destination Spas/Health Resorts 48 $0.21 3,426 Medical Spas 313 $0.29 3,478 Other Spas 154 $0.01 740 Total 5,435 $2.52 82,694 Latin America-Caribbean’s Top Ten Spa Markets, 2007 Estimated Total Estimated Total Spa Revenues Number of Spas (US$ millions) Mexico 1,855 $868.6 Argentina 1,168 $419.8 Brazil 643 $284.2 Puerto Rico 177 $114.8 Colombia 250 $102.6 Chile 199 $102.0 Dominican Republic 171 $75.0 Venezuela 156 $70.7 Uruguay 76 $41.7 Bahamas 66 $39.1Copyright Global Spa Summit 2008 27 SRI International

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