Making a case for spas in hotel developments

To have a spa or not — developers and hotel operators in Dubai may finally have an answer to that question.

The property consultancy Colliers has come up with the “Dubai Spa benchmark” that focuses on analysing how the various spa categories fare and what sort of value addition they create if part of a broader property mix.

Those spas attached to resorts had the better of it in the first-half of the year, recording a 6 per cent increase year-on-year in average treatment revenues. This comes on top of a 12 per cent increase recorded for the same period in 2014.

But the city hotel spas had a rather tougher time of it, seeing a 6 per cent dip in treatment revenues from H1-2014. “While resort spas have increased their share of in-house guests in the past two years [74 per cent, up from 67 per cent in the first half of 2013], city hotel spas increased their share of walk-in guests (43 per cent, up from 38 per cent in H1-2013),” the Colliers report notes.

“This explains the increase in treatment revenue for resort spas with higher spending from tourists, and the decline for city hotel spas, as resident walk-in guests are considered regular clients and often are entitled to resident discounts and seasonal promotions.”

Potential customers

The benchmark was created through data received from a spa industry panel representing a stock of 216 treatment rooms. Three types were analysed — beach and desert resort spas, city hotel spas, and stand-alone day spas.

“Treatment room utilisation in stand-alone day spas is highest as they tend to be smaller than hotel spas,” the report adds. “The next busiest type is resort spas due to having a large base of potential customers in the hotel.”

According to Filippo Sona, Director and Head of Hotels at Colliers International, “Given that spas often occupy prime real estate within a hotel or development, owners and operators are feeling increasing pressure to increase performance.”

According to the report, the base construction cost for spas is similar to that of hotels, but the “main difference comes from the fit-out and equipment costs. This is where the allocation becomes important and could have a significant impact on costs.”

Resort spas in Dubai are on average 1,968 square metres in size, while city hotel spas tend to be around 1,407 square metres. Stand-alone day spas, not surprisingly, tend to be smaller, averaging 527 square metres, being dependent purely on walk-in guests and more dependent on direct return on investment.

With resort and hotel spas, the returns tend to be more ‘indirect’, contributing as they do to give a premium feel to the properties they are part of.

Source: Staff Report,


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