Ms. Segerberg

Spas, Health & Fitness

Tips for Smart Spa Investments

By Jane Segerberg, Founder & President, Segerberg Spa Consulting, LLC

As 2008 continues to unfold, the current economic environment reminds us that making smart investments is paramount to the sustainability of our businesses. The most recent spa industry study conducted for the International Spa Association (ISPA) reveals that while the industry is very healthy, it is maturing and the previous exponential growth in locations and revenues is slowing down, yet individual spa net profits are improving. It is clear that spa properties that have not kept up with quality expectations are suffering from increased competition. Never has there been a better time than the present to invest wisely for the future and be poised on the brink of excellence as the economy returns to robust levels.

Webster's Dictionary defines "investment" as having "put money or time to use in something offering profitable returns". Webster further defines "tip" as "a useful idea". In these two definitions lies the intent of this article. We will study the following areas of importance to reap the highest return from the overall investment in developing a spa for hotel/resort properties and offer tips to maximize the outcome:

• The Concept and the Consumer - Why is it important to tie the concept to spa consumer attitudes? What is important and relevant to attract and sustain business?
• Space Planning for Profitable Returns - What are the areas of detail that make a difference to the overall experience?
• Staffing Investments - What is the most underutilized point of differentiation?
• Marketing Home Front - What area of marketing brings great return for the expenditure?
• Revenue "hot spot" - Why is this previously considered "additional revenue" now a major source of revenue?

The Concept and the Consumer

It is well known that keeping an eye on what pleases the spa consumer delivers positive returns to the consumer and ultimately to the hotel/resort. It is also well known that the cornerstone to long term success - a solid and compelling concept - allows a business to define and be who it is. Anyone who has studied Starbucks knows that veering from the hallmark of the business's success can lead to a decline in sales and a return to the core is essential.

Building the spa's concept with the spa consumer's attitude in mind is a win-win plan for implementation. The last 20 years of U.S. spa consumer trends has provided important milestones, most of which have been predictable. In order to entice consumers to their spas, the first hotel and resort spa environments were created as "safe" departures from their European and Asia spa experience predecessors and from the founding destination spa properties that were considered at that time to be esoteric and 'cult-like'. These hotel/resort spa models were plain, beige and fairly unimaginative with no personality. Gradually consumers became comfortable in spa environments. In a nutshell, U.S. spa consumers, having been introduced to spa-ing, are now desiring the experiences that are the very roots of European and Asian spas along with the U.S. predecessors: spending time in the spa's bathing rituals and social opportunities. While massage is still the treatment most often sold in U.S. spas and the reason that spa goers seek spas (to relieve stress, reduce stress, soothe sore joints and muscles, and feel better about themselves) remains constant, savvy spa goers realize that there is more to achieving profound results. Taking part in the heat and water experiences before treatments begins the relaxation process before the guest enters the spa treatment. Spa consumers also realize that re-connecting and re-uniting is important in today's rushed world. Spa visits can provide the opportunity to spend time with loved ones, friends and family in an environment that promotes pleasure.

Creating a spa concept and spaces where guests will desire to while away their time as a retreat from everyday pressures along with the inclusion of social possibilities meets the current and future needs of the spa goer and in addition the reason that guests seek resort/hotel vacations.

Tip: Invest time in planning well for a solid concept that is unique to the property (not a copy of other properties). Help from a consultant can assist in seeing the property as it is and lay the foundation for a strong and relevant concept that leads successful business.

Tip: Base key decisions on qualified benchmarks and industry studies. Reliable sources include the International Spa Association whose mission is to remain vigilant with clear and quantifiable research, and other hospitality research sources such as PKF and Smith Travel Research.

Tip: Plan for lasting and emerging trends such as teen/youth and lifestyle programs, along with socialization and private relaxation opportunities.

Space Planning for Profitable Returns

Space planning for profitable returns involves much more than creating a unique design, signature features and combination of textures and colors. The very nature of spas that is at the same time interactive and private as well as service laden requires an understanding of the function and importance of the back of house areas to service delivery. Without a doubt, the architecture and design should support the experience that the spa's concept describes: spaces that calm, allow guests to prepare and relax before treatments, rest and process the effects after treatments and provide both solitude and social choices.

While the above is obvious, the hidden investments that deliver big returns are the support spaces. Properly designed support spaces ensure that guest needs are met quickly and seamlessly, amenities are refreshed regularly, spaces are uncluttered and clean and staff can be discreet and efficient. Staff level requirements can be kept to a minimum while at the same time providing for ultimate guest care and comfort.

As the spa industry continues to mature, so does spa consumer usage of spas. Consumers require more flexibility in their selected services and therefore the treatment spaces require the same flexibility. Rooms that can accommodate a variety of services are profitable spa resources.

Tip: Space planning requires expertise that understands spa operations and the emerging trends of the spa industry.

Tip: Never underestimate the contribution of support spaces to the spa's overall profitability.

Tip: Architecture should deliver the concept. Be true to the spa concept. Resist the urge to acquire a smorgasbord of design ideas from other spas.

Staff Investments

Plan ahead for investing in this very important resource that is the heart and soul of the spa guest experience. Spa awards have been won on this one resource investment alone. The staff's interaction with spa guests sets the tone, creates the experience and shapes the memory of the spa visit. The service delivery, particularly by reservations, spa desk and spa attendants impacts the entire spa guest experience. By developing the service intuition and delivery of the staff, guest loyalty and spa profits take a dramatic up turn.

Initial and ongoing training is a high priority in the spa and a requirement that exceeds the priority of other resort/hotel staff training. The Spa Experience reaches intimately into the heart and soul of each guest. Handled with care, the spa experience delivered by staff on the intake and closure of the spa visit impacts the desirability of the spa in comparison to other spas.

Tip: Plan for and invest in extensive spa service training that includes an understanding of the spa experience, an empathy for guest needs and opportunities to touch guest's hearts along with the required SOP's of the specific job positions.

Marketing Home Front

Are guests aware of the spa's existence on the hotel/resort property? An excellent question. It can be very disappointing to hear that guests don't learn about the spa until they are ready to check out. This section will not address the great and creative marketing ideas or plans to attract guests to the property and spa. Instead, it addresses the plans for engaging booked and current guests in the spa experience. Check the property's opportunities to inform guests about the spa: reservation/confirmation process, check in, in-room materials, signage and dining/golf/activity outlets. It takes time to change department procedures and collateral materials. Planning ahead for departmental training ensures that the property is ready to embrace the spa.

Tip: Plan far in advance of the spa's opening, to train all resort/hotel departments on knowledgeable and enthusiastic spa promotion and information. In addition, reservations/confirmation procedures and will need to be upgraded to include the spa.

Tip: Six months before the spa's opening, review all printed and online materials for opportunities to include the spa. Make changes and additions where needed.** **

Revenue "Hot Spot"

Previously considered "additional revenue", spa retail revenue can contribute significantly to the spa's bottom line. Retail revenue runs a higher profit margin than treatment revenue where one employee is dedicated to each spa treatment. Retail can be enjoyed by many people at one time and has the highly successful advantage of a captured audience of like-minded people who enjoy an "edge" to their retail shopping experience.

In addition, spa retail can extend the spa's treatment into home lifestyle, thus supporting the lifestyle education trend. As the International Spa Association's (ISPA) book Retail Management for Spas so succinctly puts it, "Spas aren't just giving a hungry man a fish. They are giving the man the fish (treatment), teaching him how to fish (education) and then selling him the fishing pole (retail) to fish with!" It gives the guest the opportunity to improve themselves on a continuum and remember and give thanks to the spa while doing so.

Tip: Ensure that your spa has a well-planned and dedicated retail space that is compelling and comfortable with the opportunity to create interesting and interactive displays. The location should be visible and accessible to guests checking in, checking out or visiting the spa for information.

Tip: Be sure to include back of house storage and work space dedicated to retail.

Tip: Spend time and dollars to train staff in the fine art of retail selling to extend the services with retail take-home products.

In conclusion

The previous exponential growth of spas ensured a spot for anyone who wanted to open a spa. Now, consumers are savvy about the spa experience and they won't accept anything that does not provide the quality and experience they have grown accustomed to expect. It is clear that spa properties that have not kept up with the quality are falling by the wayside and the cream is rising to the top. It is also clear that excellence and quality will aid in breeding success for the new spa businesses in the market. Making wise investments in the new spa's overall plans will reap the expected returns along with the flexibility to stay ahead of the curve.

Jane Segerberg is founder and president of Segerberg Spa Consulting, LLC., a multi-faceted spa consulting and management company with an industry reputation for creating spas that work –they are compelling for the property’s market, attain recognition, engage guests in memorable experiences and achieve bottom line success. Over Jane’s thirty-year history in the wellness, hospitality and spa industry, she has become recognized for providing outstanding service and keen attention to detail. For company information please view http://www.segerbergspa.com. Ms. Segerberg can be contacted at 912-222-1518 or janesegerberg@yahoo.com Extended Bio...

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