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The Canadian spa industry has been growing at a significant pace for several years. However, prior to this study, any profiles of the Canadian industry and/or size estimates have come with significant data limitations due to small sample sizes available for Canada. Recognizing the need for statistically sound data, the Canadian Tourism Commission (CTC) and its partners engaged the Association Resource Centre Inc. (ARC) to conduct a comprehensive study of the Canadian spa industry.
This executive summary highlights the key findings from the 2006 Spa, Health & Wellness Sector Study. The report contains more detailed analysis including product/service offerings, employment and a profile by spa type, geography and tourism orientation. How Big is the Canadian Spa Industry?
This study looks at several key measures of the size of the spa industry. Spa Locations: It is estimated that there were just over 2,300 spa locations in Canada at the time of this study (March 2006) operated by roughly 2,100 companies. Day spa is by far the largest category accounting for three quarters of all spas in Canada. The second largest segment is resort/hotel spas, followed by medical spas, destination spas, club spas and mineral springs spas. Ontario is far and away the largest province accounting for 44% of all Canadian spas. British Columbia and Quebec are the next largest (each accounting for just under one fifth of spas) followed by Alberta. Combined, the big four provinces account for nine of ten spas in Canada.
Revenues: In 2005, the Canadian spa industry generated just over $1 billion in revenues. On average, half (49%) of a spa’s revenue is derived from treatment rooms. Despite accounting for three quarters of locations, day spas account for only 64% of industry revenues. Conversely, resort/hotel spas and other spa types generate higher per spa revenues and accordingly represent a greater share of industry revenues than they do spa locations.
Employment: As of March 2006, there were an estimated 25,900 people employed by the spa industry. Of these, 60% are full-time, 25% are part-time and 15% are on contract. On average, spas pay 39% of their revenues to payroll.
Spa Visits: In 2005, spa-goers made an estimated 14.1 million visits to Canadian spas. Half of these visits were taken to spas in Ontario and four out of five spa visits in Canada were made to day spas.
Square Footage: The Canadian spa industry occupies an estimated 8.0 million square feet of indoor space. Despite accounting for only 19% of locations, resort/hotel spas account for one third (34%) of industry space. Treatment rooms account for 44% of indoor space in Canadian spas. ii 2006 Canadian Spa Sector Profile How Fast is the Spa Industry Growing?
Growth in the Canadian spa industry has been relatively steady over the past few years. In fact all key industry measures have been growing at a comfortable pace. Following are the key growth areas:
Locations: Over the last decade, the number of spa establishments in the Canada has seen strong growth with an average annual growth rate of 17%. Importantly, the rate of growth over the last ten years has been relatively stable. While there have been some peaks and valleys, they have not been extreme. On a cumulative basis, the number of locations grew by 329% from 1996 to March 2006.
Revenues: Revenue in the spa industry grew at both the per spa and aggregate levels in 2005. Specifically, per spa revenues grew by 12% while the overall industry revenue grew by 30%. Based on current projections, 2006 could see industry revenues grow by a further 24% to $1.3 billion by the end of the year.
Employment: The number of employees per spa remained fairly stable from 2004 to 2005, increasing by a moderate 4%. At an aggregate level, total industry employment increased by 20% from 19,300 in 2004 to 23,300 in 2005.
Spa Visits: As in any industry, demand is the driving force that determines how well the industry performs. Between 2004 and 2005, the industry saw a 20% growth in the number of visits. This growth is primarily due to the increase in the number of spas as per spa visits remained relatively unchanged from 2004 to 2005.
Square Footage: The industry saw a growth in the total indoor square footage from 2004 to 2005 of 28%. This came on the heels of a 14% growth rate from 2003 to 2004. The primary areas for renovations and expansions in the industry are treatment rooms followed by retail, beauty salons and dedicated relaxation areas
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