a spa project evaluation
TRANSCRIPT
Anu and Jinta
ROYAL AYURVEDA SPA & WELLNESS
CENTRE
Anu and Jinta
Introduction
Economic trends in UAE
Initial Market Analysis
Market Planning
Project Selection Model and Technical Feasibility
Financial Aspects
TOPICS
Anu and Jinta
INTRODUCTION
Anu and Jinta
ECONOMIC TRENDS IN UAE
DUBAI OVERVIEW
2015f 2016f 2017f 2018f 2019f 2020f 2021f 2022f
Nominal GDP, US$bn
506.2 555.2 609.6 662.7 712.2 761.3 813.8 864.7
Real GDP growth, % change y-o-y
3.9 3.8 3.9 3.6 3.3 2.5 2.4 1.3
Population, mn
8.4 8.5 8.7 8.8 9 9.2 9.3 9.5
Anu and Jinta
SECONDARY RESEARCHWhat makes Dubai attractive? Visionary Leadership Pro-business government Transparent business regulations Economic and political stability Fastest growing city No corruption and bureaucracy Many expats Safe family-friendly lifestyle Tourism and shopping destination New Company law Easy and Cost effective to employ workforce
MARKET ANALYSIS
Anu and Jinta
Expo 2020 Rapidly growing mid-upper and upper class (HNWI) Health Concerns – Stress, Chronic Disease
KEY DRIVERS FOR BUSINESS
Anu and Jinta
Recent boom in hotel industry and luxury is making Dubai one of the leading destinations for future SPAs In luxury hotels Male spa trend is on the rise Brand focus & fashionable Spa for people in Dubai - going to a hotel, indulgence and a trend Trend toward organic and holistic Location/Beautiful surroundings Huge revenue generation - AED 11 billion by 2015 Gaining popularity as “Spa Town” Rise in the proportion of working women – beauty conscious Population of Dubai, fast paced lifestyle - stress, health concerns
and lifestyle diseases
OVERVIEW OF SPA IN DUBAI
Anu and Jinta
Top Reasons of visiting spa Relax Relieve stress Indulgence
Awareness and Selection (Customer’s point of view) Aware through friends and families Top Customer Service Requirement Prior SPA Exposure
PRIMARY RESEARCH
Anu and Jinta
Service and experience - KSF Spending for SPA on a yearly basis by a customer is primarily between
AED 1,000 to AED 20,000 Customers visit SPAs 1 to 5 times a year and there is potential for
increase Overall SPA brand is more relevant than individual product brand Women notice brand more than men Friendly environment Consumer wants to spend at least 2 hours in the SPA for complete
relaxation Customer loyalty depends on service Customer expects healthy food: fruit, nuts, tea DAY SPA is the emerging business trend Membership – pre-paid packages key to cash flow ‘Kitty Party’ type events are strong revenue generators
Awareness (Investors point of view)
Anu and Jinta
Small, low budget operations is becoming a trend Larger spas are being built for integrated wellness Customers prefer natural materials, rich colors and textures Customers don’t like clinical products, prefer organic and natural
products Customer expects large areas: space equals luxury Customer expects ‘instant results’ Fads eagerly adopted, e.g.: snail facials
Anu and Jinta
SPA customers can be very demanding High staff-to-customer ratio: 3:1 Generally lower payroll costs, but increasing rapidly Attraction and retention of staff is a major operational challenge Job-hopping is the norm Operators reluctant to invest in training Most training on-the-job 20% formal qualifications, but increasing as some countries
regulate Excellent execution, limited innovation by staff Passive, not pro-active Many players in the market Shortage of skilled labor
CHALLENGES
Anu and Jinta
Initial set up costs Monthly amortization Startup month to month expenses Retail sales Monthly net profits Break even points When sales are down – special promotion, spa party,
special call to special customers
FACTORS OF SUSTAINABILITY
Anu and Jinta
Segmentation - Our target customers are teenage girls and women of all age groups with average disposable income of at least AED 5000
Location - Cedar Shopping Center in Dubai Silicon Oasis - DFZ
STRATEGY Quality, experience and building relationship
VALUE PROPOSITION “We help our community become a better place to live and work”
MARKET PLANNING
Anu and Jinta
Advertising strategies – Email ,FB, SMS, YouTube viral videos, print
Positioning – Caring employees and high quality
Presentation and Packaging – Photographs, clean, neat, hygienic, logos, ambience and décor
Products – organic and authentic
Pricing - high pricing for exclusive services which will portray added perceived value, competitive pricing
Promotion - Invite influential people - offer free services, for new customers – one free package with three referrals, referrals based on commissions, special occasion packages, kitty parties
MARKET PLANNING
Anu and Jinta
SERVICES
Anu and Jinta
Basic screening model – Industry attractiveness and environmental stability are the key motivators for investment Cost – Medium Profit potential – High Time to market – Medium Development risk – Medium
Financial model – NPV method NPV assumes that project cash flows are reinvested
at the company's required rate of return. NPV actually calculates the project's value
PROJECT SELECTION MODEL
Anu and Jinta
Product mix – services which caters to broad range of customers
Capacity – normal, space and equipment utilization Structures – flexible Equipment – electricity base Safety of personnel – taken care Location and site – Dubai, DSO, Free Trade Zone Environmental aspects – as per statutory requirements Government policies – Supportive Infrastructure – good Environmental pollution – none Living conditions – good Climate conditions - harsh
TECHNICAL FEASIBILITY
Anu and Jinta
Budget and NPV .xlsx - Shortcut.lnk
FINANCIALS
Loan.xlsx - Shortcut.lnk
Anu and Jinta
CONCLUSION
Anu and Jinta