Mr. Henkin

Spas, Health & Fitness

Planning a Spa? Avoid the Pitfalls: Preparing Your Spa for a Successful Launch

By Gary Henkin, President & Founder, WTS International

In Part I of our series on spa development, the importance of planning, the value of feasibility studies and avoiding design pitfalls was discussed. As mentioned previously, it is crucial to proceed cautiously when planning your spa and to ensure that there has been enough due diligence to make the most appropriate decisions regarding size, scope and potential location. As critical as it is to offer the most aesthetically pleasing and functional space through a thoughtful and comprehensive design process, it is equally important to "stage" your spa for a smooth and successful launch. This requires a focus on what the ultimate objectives will be and a definition of how the spa will ultimately operate in presenting itself for guest and public use. Questions such as how to maximize revenue and profits, and how the spa can best impact room nights and yield should be addressed.

Once the design process for the spa is nearing completion, attention should be turned to a carefully orchestrated approach to the pre-opening process. The owner/developer and hotel management should anticipate just how the spa will ultimately look and feel to the hotel guest and/or day spa consumer and, in doing so, how the facility will be promoted and operated. This includes addressing such issues as appropriate staff selection and training, timeline and budget development, product procurement, treatment menu completion, data management and operating systems. All aspects related to how the spa will be expected to operate must be scrutinized closely with an eye toward providing exemplary customer service and a truly relaxing experience for the guest. At the same time, plan to maximize revenue and net operating income. Specific goals and objectives, both operational and financial, should be outlined for the spa. A determination should be made as to the potential for impacting such areas as: hotel occupancy levels; attracting new guests; contributing to more prolonged guest stays; increasing guest expenditures; profit potential; and how best to promote the spa from within and externally.

Any pre-opening phase should begin with the development of a timeline spelling out each item required to effectively open the spa which is tied to a specific timeframe to complete the task. Thus, the selection of the Spa Director (and Assistant Spa Director if required) and all other staff and service providers should be a "deliverable" on the timeline. So too should items such as the development and finalization of the operating budget, marketing plan, product selection, equipment delivery, menu development and licensing/permitting documents. In many instances, owners/developers embark on the opening of their spa without the benefit of careful planning for each area of the pre-opening stage. This is the ultimate mistake as the spa will then open without a well thought out game plan tied to a viable timeline. Don't make the mistake of taking a deep breath once the design of the spa is completed as this is simply the starting point of the journey to achieve operational and financial success. This process mirrors that of a hotel or resort opening, but often spa owners/developers don't equate the two.

Attention should be paid to the procurement of licenses and permits that are required. This important step is sometimes an afterthought in the frenetic pace that is often associated with a spa opening. One should avoid this mistake at all costs as you may well have all the other "ducks aligned," but when it comes time to greet your guests, you may not be able to effectively open the spa. Regulations vary dependent upon the area/region in which the spa is located; thus, it never hurts to begin exploring licensing requirements in the early days. Whatever you do, avoid waiting until the last moment to apply for and procure the required licenses and permits needed to open the doors.

Equally important is the preparation and/or finalization of the operating budget. This should include all revenue assumptions based on an estimate of spa use by both "internal" hotel guests and "external" patrons from the surrounding area. It should also include projections for the sale of retail items (products, soft goods, etc.) which are critical to a spa's net operating income potential. Typical operating expenses include cost of goods, payroll and benefits costs, administrative and cleaning supplies, towel and robe replacement, laundry costs, locker room amenities, marketing/promotion, insurance, printing, repairs, uniforms and utilities to name just a few. Careful consideration needs to be given to each of these areas starting with how best to develop the revenue stream and a determination of how key staff, therapists and estheticians will ultimately be paid. This last item can significantly impact whether a spa will indeed be profitable or not. If there is a fitness center that is open for membership to the public, this revenue potential needs to be included along with any guest fee income for facility use.

Next in line of priority are decisions that need to be made which focus on staff selection and training as well as finalizing the treatment menu and product procurement. A qualified Spa Director is a must for any facility that will offer a myriad of treatments and services and, particularly, those that expect to generate a positive bottom line. In making this all important decision, one should consider communications, leadership and organizational skills of the candidate along with the essential requirements in spa service credentials; the person's business acumen and management skills are equally crucial. This individual should undergo a thorough training process in all areas related to the delivery of a premium customer service ethic and in all areas related to the day to day operation and promotion of the spa. He/she, in turn, will select and train the service provider staff including massage therapists, estheticians, nail technicians, receptionists, locker room attendants and others. It is absolutely critical to success that the staff create a warm and nurturing environment for all patrons of the spa. At the same time, they must be fully trained to promote and drive revenue while managing expenses appropriately. The Spa Director should be engaged well prior to the grand opening of the facility, typically at least 4-6 months in advance for smaller facilities and 8-12 months in advance for larger spas. The product selection decision should be based on a number of factors and tied specifically to treatment menu development. One should not select skin care line(s) in absence of the menu. There are numerous spa product lines available today, and choices will reflect the type, scope and locale of each spa as well as the profile of the patrons it seeks to service. An operating supplies and equipment (OS&E) list and product inventory system should also be developed in this phase.

Another important task during pre-opening is to develop all employee manuals and standard operating procedures (SOP) for the spa. This should occur once the concept/design phase is complete but well before the pre-opening process has progressed too far. A well thought out plan for the daily operations needs to be outlined for translation to the staff. Data management systems should also be investigated and selected in order to effectively monitor facility utilization and tracking.

Next to the selection and training of qualified staff, the development of a viable marketing and promotion plan is paramount. This should include a focus on how to best "capture" hotel or resort traffic in combination with an emphasis on the promotion of a non-hotel constituency. A marketing and promotion budget should be a line item in the expense allocation which can include advertising, direct mail, a public relations campaign (in select instances) and numerous grassroots marketing options. It should also encompass a "grand opening" event and enough expense allocation for appropriate collateral materials (e.g. the treatment menu, gift certificates and direct mail pieces). With regard to maximizing guest use from within the hotel or resort, it is vital to integrate the spa into the property and its sales/marketing department. In order to drive significant revenue from internal guest traffic, one must effectively promote the spa at every venue possible; this includes the front desk reception area, concierge, in-room opportunities, network TV channel, inclusion of a spa desk, restaurant, elevator cabs, etc. Further, the spa should be discussed by the hotel's sales staff when speaking with potential conference and meetings business, special events (e.g. weddings) and other opportunities. A critical mistake is made by many hotels in viewing the spa as one which should stand on its own as a profit center with or without the hotel's support. If the property as a whole isn't willing or able to include the spa as an integral part of its overall marketing strategy, revenue will not be maximized, nor will the potential for operating profits.

In summary, a spa should not ever be conceived and/or designed in a vacuum without forethought given as to how the spa will be operated and promoted. All too many times, this is the case, and the facility opening is not as successful as anticipated. Start this process with the development of a complete timeline which should contain several hundred items if crafted correctly. Follow a plan which brings the spa into an integrated posture with the remainder of the property. Pay strict attention to the hiring and training of qualified staff for without the right people in the right slots, the spa will not succeed as hoped. Ensure that all the i's are dotted and t's crossed when it comes to standards of operation, marketing plan development, retail product selection, reporting procedures and the numerous other areas which need to be prepared prior to opening. Plan your spa for a truly successful launch through the execution of an organized plan and enough time and resources to see it through effectively.

President and Founder of WTS International, Gary Henkin has 30 years in the planning, design and management of health clubs, spas and athletic facilities. He has developed feasibility and needs assessment studies for spa and/or health club properties. WTS has become one of the world’s largest and fastest-growing leisure consulting and operating firms. The firm has about 1,000 employees worldwide and provides services to hotels, resorts, luxury residential properties, exclusive golf and country clubs, day spas and real estate developments throughout the United States and overseas. Mr. Henkin can be contacted at 301-622-7800 or ghenkin@wtsinternational.com Extended Bio...

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