Spa industry

DISCLAIMER
This document is for the personal information of the authorized recipient and makes an attempt to provide
the end user with necessary information & act as a guiding force in undertaking the project this document
details about.
Devenio Optimus Advisors is not soliciting any invitation to subscribe to any security or investment in any
project based on this document. This Document does not purport to be all-inclusive or contain all the
information that a prospective investor, lender, partner or interested party requires for their review of this
Company.Company.
Neither Devenio Optimus Advisors Private Limited nor any of its directors, officers, or advisers give any
representation or warranty, express or implied, in relation to the accuracy or completeness of the
information contained herein. No responsibility is accepted for the accuracy or sufficiency of any of the
i f ti i i i t d d li bilit f di t i di t ti l linformation or opinions communicated and any liability for any direct, indirect or consequential loss or
damage suffered by any person arising there from is expressly disclaimed.
The recipient of this document is cautioned that any forward looking statement/projection are prediction
and are subject to change. Devenio Optimus Advisors will not accept not would be responsible for anyj g p p p y
liability arising from use of this document.
Devenio Optimus Advisors Pvt Ltd © 2010 Private & Confidential

INTRODUCTION
The Wellness Industry in India have been growing exponentially over the last couple of years. The fast
moving lifestyle full of stress has resulted into booming business for those involved in providing relaxation
and rejuvenation therapy.
Spas in India are a highly fragmented industry. Apart from a few Spas which operate as a chain across multi
location. Spas in India are generally standalone. Due to this there are hardly any Spa brand which is
recognizable on a pan India basis. The lack of quality standards are also a concern. Although not amongst
its core activities but due to the problems plaguing the industry major hotels run there own Spas.
The sudden boom in Spas is changing the industry scenario. The Wellness Industry is witnessing rapid
changes, established corporate like the Birla group are foraying into the industry and so are well known
international brands. The sudden growth in Spas have made them affordable to the huge upper middle class
providing a large captive market. Along with it medical tourism as a sector has been booming & is giving riseproviding a large captive market. Along with it medical tourism as a sector has been booming & is giving rise
to strong demand for Wellness therapies.

HISTORY
What is a spa?
The ancient concept of a spa (literally, sanitus per aqua in Latin or “mineral spring”) revolves around the
therapeutic powers of water fortified with the powers of minerals (primarily zinc, magnesium and iron).
Spas are the most frequented and sought-after destination, thanks to the feel-good factor they engender.
Mineral springs in ancient times were renowned for their therapeutic values, especially in Rome where
hundreds of Roman baths did double duty as bath houses and health centres.
O ti t d d ti h d d th i h l t dOver time, resorts and accommodation mushroomed around these springs where people congregated.
However, at this stage these spas were still strictly therapeutic. Gradually, more and more people started
thronging these spas to tackle stress and lifestyle-related disorders.
Where there were no natural springs, canny entrepreneurs built mind-body rejuvenation centres andp g , y p y j
fitted them with modern gadgets. And voila! the modern spa was born.
Today, many good salons across the world offer a day spa facility — with or without wet services
(Jacuzzi-sauna-steam) — as people are scrunched for time to visit a real spa. Here, they can detox, de-
stress and rejuvenate themselves without bothering to leave townstress and rejuvenate themselves without bothering to leave town

THE INDUSTRY
Globally the wellness industry is estimated at over $250 billion.
There are about 75,000 standard spas world over that provide direct employment to about 1.5 million
people
As per FICCI-E&Y report in 2009, Spa Industry forms a significant part of the Rs 11,000 crores wellness
services sector in India
In India, there are over 2300 spas that have created direct and indirect employment for about 400,000
lpeople.
The rise in the annual disposable income couples with high level of well being and growing level of
health awareness has created strong opportunities for existing and new players in the market .
In the next four years, 700 new spas, both homegrown and international brands, will open in India to
meet the growing demand.
The spa industry has observed strong growth and expected to grow dynamically in the future.
The Spa & body treatment segment is still in an infant state in India, the industry projections suggest this
segment to be worth Rs 4,000 crores over next four to six years.

PORTER’S 5 FORCES
Threat of New Entrants – VERY HIGH
Vi t ll t b i A f
Bargaining power of Buyers – MEDIUM
Although it’s a high growth industry with stiff
competition within rival firm there is no uniformity in
d t i i O t i th ff iVirtually no entry barriers. Any person can foray
into the business without complications
product or pricing. Operators price the offerings as
per the package. Hence the end user has limited
bargaining power when it comes to pricing or
bundling in of additional services.
Rivalry within the Industry – HIGHRivalry within the Industry HIGH
Largely localized & unorganized market.
Hardly any player with Pan India presence
and operating with a corporate structure. The
industry is fragmented & due to limited or no
brand recall / value , competition amongst
firm in the Industry is very stiff and at a local
Bargaining power of Suppliers – HIGH
Threat of Substitute – VERY LOW
There is a very low threat from substitute products,
Th t t d h i d th d t
firm in the Industry is very stiff and at a local
level.
Currently very few suppliers of trained manpower
or products. These suppliers enjoy a relatively
commanding bargaining power
The automated massage chairs and other products
available in the market do not in the real sense
offer any threat, as it cannot parallel or replicate the
Spa experience.

TYPES OF SPA
Resort Spa Day Spa
Prevalent in
large hotels,
provides body
treatments &
aromatic rubs
y p
Small Setup,
Provides facial,
pedicure,
manicure &
massages
Types of Spa
aromatic rubs massages
Medical Spa
Setup across the
Destination Spa
Setup in remotep
country & is into
hydrotherapy &
various surgical
procedures
Setup in remote
locations &
provides body
treatments &
aromatic rubs

ACTIVITY SEGMENTATION
Ayurveda,Yoga, Meditationy Y g
Therapies aimed at relaxation of body & mind.
Massage Therapy, Body & Facial Treatments
For clients looking for anti-aging solutions, chronic pain etc
Alternative Health Care
Use massage as a preventive healthcare treatment, helpg p , p
reduce stress

KEY TRENDS
F i Pl E t i
Targeting Teens & Men
Foreign Players Entering
the Market
Key Trends
Growth in MediSpas
Increasing Affordability,
No longer a luxuryNo longer a luxury

KEY TRENDS
As global players in the hospitality sector expand across Indian cities, accompanying them are the spa
and body treatment firms that expect an immense growth potential in the country.
Growing demand of medical spa is also noticed in the last few years. The people are more vibrant to
i t i th i d l i hidd h lth t t t f t b dexperiment various message therapies, and exploring hidden healthy treatments . foot message , body
message , neck and back message and other exfoliation therapies are among the most popular
services.
While body treatment and massage, which are integral aspects of spa, are not new for Indians as theyy g g p p y
have known similar techniques from ayurveda, the very concept of spa is expected to boost the
ayurveda massage segment as well.
The Swedish massage, German body treatment and Thai massage are the most popular therapies
across all spa centresacross all spa centres.
The most targeted customers for the sector were females but with the changing trends and growing
wellness and health consciousness the new targeted customers are men a segment which is
registering about 80% growth annually.
In India, a Spa treatment was considered to be a luxury, with the increase in disposable incomes &
increase in accessibility due to the growth of Spa across the country, a Spa treatment has become
affordable to the rising middle class,

COMPETITIVE LANDSCAPE

COMPETITIVE LANDSCAPE
The Indian Spa Industry is highly fragmented with spas across the country. A few Brands like Sansha,
Orient Spa, Kerala Ayurveda have a chain of outlets barring them most of the Spa’s in the country are
single destination operative.
Large hotels themselves have expanded their services to encompass spa services & Destination spasLarge hotels themselves have expanded their services to encompass spa services & Destination spas
are competing for both local and foreign customers.
As of now, around 70 per cent of the spa business is run by local brands, while the rest is taken over by
international spa firms.
The Industry is expected to witness exponential growth in the times to come & many players both
domestic and international are setting up expansion plans
Many standalone day and destination spas are being set-up in major cities are such majory y p g p j j
establishments, its expected that nearly 700 new Spa’s will be added over the coming few years
Being one of the biggest platform for customer orientation India has become one of the most popular
destinations for the global players. International Brands like MSpa International from Thailand, Aman
Resorts From Singapore & Xpress Spa from US are establishing a presence and planning to scale upResorts From Singapore & Xpress Spa from US are establishing a presence and planning to scale up.
Domestic entrants are abound in the market with plans for multiple locations concentrated in tier- I and
tier - II cities

GROWTH DRIVERS
With more and more multinational companies setting base in India, India is seeing an increasing number
of business travelers combining business with leisure and the MICE (Meetings, Incentives, Conventions,
and Events) market is growing.
Women today visit beauty salons not as much to look better as to feel good and have some time forWomen today visit beauty salons not as much to look better as to feel good and have some time for
them. They want to pamper themselves and are constantly on the lookout for new experiences.
Traditionally Men used to visit saloons only for haircuts or a quick shave but times have changed and a
average Indian male today loves to visit Spas to relax and de-stress himself. Young Men are one of the
f t t i t t f th S i d tfastest growing customer segment for the Spa industry.
Increase in disposable income has made Spa treatment affordable. Spa treatment is not longer a luxury
services beyond the reach of an average person. A huge middle class with a ever increasing appetite
for newer and better goods and services, provide Spas a large client base.g , p p g
The ever so stressful life style and pressures all around have made Spa treatments to de-stress &
rejuvenate a necessity for the ambitious young professionals.
The truth of an Affordable Health Destination Medical wellness and cosmetic med spas is a boomingThe truth of an Affordable Health Destination - Medical wellness and cosmetic med spas is a booming
business as it fills certain critical gaps in the traditional health care system. Spas tie in with medical
tourism as part of the “post-op” recuperative holiday.

CHALLENGES
The Spa industry is highly fragmented & unregulated.
Lack of standardization. There is no regulatory body which ensure that a certain quality standard are
maintained across the Industry.
Every Spa in India does the same Traditional Treatments differently, simple therapy like Ayurvedic
Massage is done in different manner in different places, for example, Shirodhara is done at any time of
the day, where as it is strictly contra indicated in the afternoons.
L k f dit d t i i i tit t D t hi h t i d i t il il bl HLack of accredited training institutes. Due to which trained manpower is not easily available. Human
resources are at premium in the Industry.
Lack of Government support in promotion of industry except in few cases
Shady places working under the name of Massage joints giving a bad name to the profession & Industry.

FINANCIAL OVERVIEW
A Spa with 3 therapy rooms & 3 foot massage chair will require an area of 1500-1800 Sq ft.
Capex on Per Sq ft basis (More lavish you make more will you spend) `. 2000 & above
Capacity Utilisation for a Spa is around 50-60%p y p %
Average Cost for a body therapy `. 2000
Average Cost for a Foot therapy `. 500
For a 1500 Sq Ft Spa@ 55% UtilisationFor a 1500 Sq. Ft Spa@ 55% Utilisation
Revenue generated per Sq Ft. `. 7,623
Cost per Sq. Ft `. 5,533
EBITDA per Sq. Ft `. 2,090
EBITDA % 27%EBITDA % 27%
Cost Structure
Employee Cost 30%
Rent 36%
Source: DO Research
Rent 36%
Electricity & Water 6%
Consumables & Other Cost 23%
Marketing & Publicity 5%

2nd Floor
Devenio Optimus Advisors Pvt. Ltd.
No 5022nd Floor,
27, Babar Road
New Delhi – 110 001
Tel : +9111 4151 0900
Fax : +9111 4151 1140
No.502,
Shah Sultan Complex,
Cunningham Road
Bangalore – 560 052
Email : contact@devenio.in
Mergers & Acquisition Private Equity Placements Debt Placements Transaction advisory

Spa industry

Recommandé

Recommandé

Contenu connexe

Tendances

Tendances (20)

En vedette

En vedette (8)

Similaire à Spa industry

Similaire à Spa industry (20)

Spa industry