ITALIAN SPA INDUSTRY:

• The spa industry represents one of the main growth engines of the Italian economy.

• Italy boasts an extraordinary number of baths: 378 - located in 169 thermal municipalities, in every region of the country and equally distributed in the North (46.7%), in the centre (14.8%) and in the South (38.5%).

• Campania (29.9%) and Veneto (28.8) have the highest concentration of baths.

DIMENSIONAL PROFILE• Bath industry employees,

including seasonal workers, range from around 16,000 units of direct employees to about 60,000 “indirect” employees.

• Most of the baths are medium-sized companies (about 65% of them employ between 25 and 100 people). 10 are larger companies with more than 200 employees.

• Legal status: LTD, Government-owned companies, cooperatives, sole proprietorships

• Bath regional presence : Veneto (85), Campania (55) , Tuscany (23), Emilia-Romagna (19), Lombardy (16), Lazio (15).

SPA TRENDS• In 2008, total gross revenues

reached around € 774 million corresponding to an average of just under 3 million euro per company. In 2009, total revenues almost reached € 788 million.First 2010 data indicate a total gross revenue around € 790 million.

• In term of added value, after a +3,3% in 2008 , a decrease of 1,3% was recorded in 2009 (€418.647 million).In 2010 we esimate an increase of + 0.3 % (€ 419.903 million).

• This confirms that bath companies have better reacted to the economic downturn.

SPA DEMAND IN ECONOMIC DOWNTURN

• The demand of traditional thermal treatments has remained steady.

• On the contrary, the demand of beauty services has showed flexibility with respect to the income, although many companies have reduced prices and increased promotion strategies to support the demand.

• Revenues from the well-being and beauty services, in fact, have dramatically decreased. Their growth rate went down from 5.1% in 2008 to 1, 8% in 2009

FLUCTUATION IN TOURIST FLOWS

• Fortunately, tourist flows from abroad have not affected the spa industry, not even those from the non-EU countries (the highest rate is represented by Italian guests).

• The downsize of foreign guests (especially American) did not dramatically affect the spa industry.

• In those spas with a high rate of foreign guests, the fall of the demand was partially offset by the domestic demand increase.