Spa Business issue 2 2012 - Leisure Opportunities

RESEARCH
The low utilisation
and revenue levels
suggest that these are
[all] diffi cult markets,
particularly if spas are
considered separate
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profi t centres IRYNA1
£211) in 2010 and us$303 (€228, £187) in 2011.
In August it dips to us$199 (€150, £123).
BEIRUT, LEBANON
Beirut is a “chic, high-end leisure destination
in the Middle East” says to Dahmash.
Like Doha, the Beirut market derives a
high proportion of revenues from the local
community. Fitness and membership revenue
generates around 45 per cent of total
revenues and 60 per cent of treatments on
average are booked by non-hotel guests.
Interestingly, although the revenue per
available treatment room in Beirut is only 15
per cent higher – at us$118 (€89, £72) – than
that achieved by the spas in the Dead Sea
(us$101) and half of that achieved by spas in
Doha (us$238), the Beirut spas signifi cantly
outperform in terms of RevPATH generating
us$32 (€24, £20) versus us$19 (€14, £12)
in Doha and us$14 (€11, £9) in the Dead Sea
region. Th is suggests that the Beirut spas are
possibly open for shorter hours.
January and August are the quietest
months in Beirut, with daily treatment revenues
per available treatment room averaging
us$99 (€75, £61), while the peak month of
September generates us$141 (€106, £87).
Similarly, the productivity of therapists is
higher in September at us$226 (€170, £139)
– for daily treatment revenue per therapist,
while the comparable fi gure in January 2011
was us$152 (€115, £94) and us$161 (€121, £99)
in August. Th ese are signifi cantly below the
peak productivity levels for Doha at us$437
(€329, £269) in May and the Dead Sea region
at us$354 (€267, £218) in January.
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AVERAGE
REVENUE PER
TREATMENT
SOLD
Across the three markets,
the average
revenue per treatment
sold is relatively stable
throughout the year,
with the exception of
October in Beirut where it drops signifi -
cantly. Doha achieves the highest revenues
per treatment sold of the three regions at
an average of us$133 (€100, £82) in 2011, an
11 per cent increase on the comparable fi gure
for 2010 which was us$120 (€90, £74).
Despite the October trough, Beirut achieved
an average of us$83 (€63, £51) in 2011, while
the Dead Sea region shows little seasonality
on this key performance indicator with an
average for of us$77 (€58, £47) in 2011, a 5.6
per cent increase on the comparable fi gure
for 2010 at us$73 (€55, £45).
TRENDS
Th is is the fi rst year that PwC has covered
Beirut, so no comparable data exists for 2010.
However, a comparison of January to October
2010 versus the same period in 2011 of
the Doha and Dead Sea markets shows some
signifi cant declines in terms of RevPATR
and utilisation of therapists’ hours in both
the Dead Sea and Doha markets.
In addition, the decline in performance
has occurred in spite of increases in the average
revenue per treatment sold in both of
these markets (see Table 1).
TABLE 1: AVERAGE TREATMENT REVENUE PER TREATMENT SOLD
January to October
US$ 2010 2011 % change
Dead Sea 73 77 6%
Doha 120 133 11%
Spas in Beirut hotels signifi cantly outperformed the others in the Middle East in terms of RevPATH
TABLE 2: REVENUE PER AVAILABLE TREATMENT ROOM
US$ 2010 2011
Doha 91,141 86,870
Dead Sea 44,603 36,865
Beirut n/a 43,070
USA 120,195 n/a
Source: PwC Middle East, PKF US
GLOBAL COMPARISON
So, how do these markets compare with others
worldwide? Th e statistics don’t cover a
full year – only January to October. If they
are annualised (based on the 10 months provided),
the revenues per available treatment
room are low in contrast to the same year fi gures
in the US for example. Further, although
not yet available, the indications are that the
2011 fi gures for the US are likely to be higher
than those of 2010 (see Table 2).
Th e comparison is of course not totally
correct because the Middle Eastern fi gures
are extrapolated, but they nevertheless provide
some indication of the quantum.
Although low, treatment revenues in the
Doha and Beirut spas only generate around
35 per cent and 49 per cent of total revenues,
respectively, with the rest coming from fi tness
and memberships and retail revenue.
However, the Dead Sea spa market, which
has the lowest treatment revenues out of the
three areas, also has no fi tness and membership
revenue whatsoever.
In conclusion, although the studies don’t
provide cost and profi tability data, the low
utilisation and revenues levels suggest these
are diffi cult markets, particularly if spas are
considered separate profi t centres and without
taking into account any benefi ts they
might generate in terms of hotel room occupancy
and average achieved room rates. ●
For full copies of these PwC spa benchmarking
surveys in the Middle East region,
email yohaan.freitas@ae.pwc.com.
SPA BUSINESS 2 2012 © Cybertrek 2012