The larger health farms generate very high levels of turnover, largely due to treatment income which can easily be greater than the accommodation income. This aspect of the business is very labour intensive, so wages bills are significantly higher than for hotels, although compensated to some extent by lower food costs. Bar sales are also low, but at relatively high profit margins as a much higher proportion of sales are of ‘soft’ drinks.
Typical total turnover per letting DBU for 1998 is £70,000 to £90,000 for the better ones, compared to £45,000 to £55,000 for 1993. This figure can be affected by the incidence of ‘day stay’ only customers, and private leisure club membership. It appears therefore that the top end of the market is likely to be more profitable than in 1993.
On the other hand, it is understood that some of the ‘second division’ health farms are finding trading conditions difficult. It is likely that the surge in private sports/leisure/fitness clubs has affected this part of the health farm market.