US SPA INDUSTRY HITS ECONOMIC DOWNTURN

US SPA Industry hits economic Downturn

ACKNOWLEDGEMENTS

I would like to thank my supervisor/professor and colleagues who helped me in different part of this dissertation and without their efforts this would not have been possible.

Abstract

The recession hit spas hard. Spas describe 2009 as the "disaster". Revenues dropped 15% on the preceding year. Such the fall alarmed spas which had become accustomed to relentless expansion. Ten years of twice digit growth had directed to oversupply of spas (saturation documented by Diagonal Reports in 2007) which has made the problem worse.

Table of Contents

INTRODUCTIONI

IntroductionI

BackgroundI

Problem statementIV

Rationale of studyIV

Research hypothesisV

LITERATURE REVIEWVII

METHODOLOGYXXXVI

METHODOLOGYXXXVI

Research MethodXXXVI

The research objectives of 2010 U.S. Spa Industry Study are as follows:XXXVI

•Determine size of spa industry in United States; specifically in terms of 'Big 5' statistics, that is:XXXVI

•Revenues;XXXVI

•Number of visits;XXXVI

•Number of establishments;XXXVI

•Square footage; andXXXVI

•Employment.XXXVI

•Estimate growth rate of industry.XXXVI

•Develop the profile of U.S. spa industry using criteria such as regional distribution, spa type, ownership structure, ownership of real estate and equipment, number of visits and service/product offerings.XXXVI

•Determine current and future industry trends and challenges.XXXVI

•Manage ISPA database of key industry statistics.XXXVI

II. Threat Of SubstitutesXLIII

III. Buyer PowerXLIV

IV. Supplier PowerXLV

V. Barriers to Entry / Threat of EntryXLVI

Dynamic Nature of Industry RivalryLI

Generic Strategies to Counter the Five ForcesLIII

DATA ANALYSIS AND FINDINGSLIV

Data Analysis and ResultsLIV

Goodness of fit analysisLV

Factor analysisLV

Reliability analysisLV

Analysis of t-testLVI

Construct validation analysisLVII

CONCLUSION AND DISCUSSIONLVIII

Future ResearchLIX

REFERENCESLXI

APPENDIXLXXIV

Introduction

Introduction

A spa's exquisiteness and wellness therapies so, naturally, “beauty maintenance” and “quality of life” services still explain for most spa business in US. The peak spa classes are massage and facials. (Patel 2001)

These account for more than half of incomes in spas. The best performing spas have habitually sustained that it is basic services which generate most money. As one manager noted, “Media-hyped, exotic sounding services may appeal attention, but in end persons purchase basics: massages, and facials” The recession has only emphasized their importance. (HOOD 1998)

Changes in people's ways of life (such as prolonged computer use) and their desire to improve their wellbeing have propelled demand for massages. It augurs well for futures of spas that these massage therapies attract broadest variety of consumer segments in terms of age and gender. Facial skincare is furthermore one of most recession resistant spa treatments. Buyers are eager to continue spending and even to pay premium prices for value professional services to sustain face, which is their most visible body part. (Kerin 2005)

Background

The International SPA Association (ISPA) issues key components of its 2010 U.S. Spa Industry Study. ISPA has been consigning precious spa industry research for more than the ten years and this year's study was undertook in joint project with one of world's premier study organizations, PricewaterhouseCoopers (PwC). Each year ISPA closely monitors “Big 5” key statistics encompassing income, spa visits, positions, total workers and rectangle footage.

“These figures show that large recession has left effectively no industry untouched,” said Colin McIlheney, Global Research Director at PwC. “After numerous years of very fast development, all five of key estimation statistics for spa industry display the down turn after ...