Ms. Clarke

Spas, Health & Fitness

The Consumer of Wellness and Health Therapies in US and European Resorts and Spas

By Jacqueline Clarke, Research Director, Diagonal Reports

The spa or health and wellness segment is one of the fastest growth segments in the hotel market in the USA, in many EU countries and elsewhere, that is in Eastern Europe, and in Asia. In Austria revenues in health and wellness tourism are reported to be 30% higher than traditional tourism.

The pace of development suggests that hotel spas are meeting a demand that has not been satisfied in the traditional beauty channel. Indeed hotel spas are growing in countries, among them France, where the traditional beauty market is stagnant.

The hotel spa market is new. In Canada over 75% of spas were less than 10 years old in 2004. In France most hotel spas were established after 2002. In the UK the Spa Business Association (www.spabusinessassociation.co.uk) was only established in 2004.

The newly established hotel spas are proving popular. In France a survey of one hundred 4-star luxury hotels found that 40% of hotel customers used the spas during their 2005 stay, compared to only 10% in 2000. These hotel spas include hotels equipped with massage treatment rooms, saunas and fitness centers - according to a presentation at the Paris trade show "Beyond Beauty."

But the rapid expansion of the health and wellness is creating a problem. The new market now faces what some would describe as an identity crisis. The crisis is that an ever widening range of very different facilities and therapies claim entitlement to be covered under the umbrella of health and wellness.

A selection of facilities covered that satisfies the criteria of making people "look and feel better" could include those offering beauty and pampering (massage) therapies such as spas (day spas). Then there are the health oriented facilities such as fitness clubs, sports clubs and health resorts. The latter can include water spas, mineral spas, mud spas, climatic resorts (fresh air), sea-side and hydrotherapy spas. They have now been joined by those offering nutrition, mainstream and alternative medical procedures that can have a diagnostic, prevention or maintenance element.

Indeed the spa term is so loosely used as to be no longer meaningful. Some industry players now all for stricter criteria. Chief among them are hotel spas. It is hardly surprising that a EUR10 million spa resort will tend to regard the use of the "spa" term by a high street salon as devaluing its investment.

The USA spa association ISPA, arguing that "the vast usage of the word spa" has blurred definitions, has revamped its own criteria for a business to be considered as a spa. A spa must offer at minimum one service in at least two of three of following categories massage, skin care, and body treatments. Other associations would require a spa to offer a water therapy.

How did the spa concept inflate to such an extent, that the term is now meaningless ? It is because many different businesses are at the experimental stage of repackaging menus available in many sectors and anxious to get a cut of growing market. The new merely repackages elements of the professional beauty sector, of fitness clubs, and of the traditional cure spas that utilise natural waters or minerals. The traditional "spa and health resort" market is important in some countries in Europe (among them Germany, Italy, and France). There are across Europe approximately 1,100 "spas and health resorts." The French Thermal Spa market could be worth over EUR370 million a year.

Some of these claim an ancient lineage, that is, to have been in the therapeutic business since Roman times, among them the spa towns of Baden-Baden Germany, and Bath, UK.

The new hotel spas are anxious to attract different consumer segment than those who use the traditional health resorts. In the two of the largest in Europe, in Germany and France, the majority are older consumers, who use medically supervised treatments often prescribed by doctors. Though this changing, much of this business is insurance paid. Self-pay in German spas in 2004 reached almost 70% in many locations.

The following is a thumbnail picture of hotel spa market treatments. The central feature of menus in different countries are beauty and massages. In one market, Canada, a 2005 survey commissioned by a Quebec association of health/wellness/spa hotels ("Spas Relais sant'e(R)") report that massage accounts for half of visitor usage, and the other half is dominated by use of body treatments and beauty. All others trail at a long distance, including that centre piece of the traditional spas, hydrotherapy.

Why, when consumers are spoilt for choice to indulge their desires for health and wellness therapies, do increasing numbers visit a hotel for a massage or beauty care? Why not pop into the more conveniently located high street salon or spa? The simple answer is that very few high streets salons/spas offer more than beauty care. This is unlikely to change because the overwhelming majority of those operations are micro-sized businesses that lack the resources (financial, and skills-wise), and the interest to expand.

The traditional "beauty/wellness" businesses in France and Italy serve to illustrate the sector. In France 95% of these businesses have fewer than 5 staff, and in Italy 80% are under 100 M2. It is not possible for such small businesses to re-brand as a spa - at least in anything other than name.

Consumers are clearly attracted by the range of treatments that hotel spas can offer. But they want that element that is foundation upon which the success of the small owner run "beauty/wellness" businesses is built. They have understood that personal care services are somewhat different to other consumer services. They offer their clients both individual attention and a personal relationship with the therapist who provides the services. This personal element is absolutely crucial at the upper end of the beauty and wellness market - and it is why those consumers pay premium prices.

However, hotels cannot easily replicate how the traditional "beauty/wellness" businesses build client loyalty, that is, the regular visit for personal care. The frequency helps to establish the personal touch which is the foundation stone of the high value client relationships.

The new entrants into the spa market can learn much from how the more traditional beauty care businesses develop a client relationship. Some of the best performers in the beauty care market - both in mid market and the up market - identify staff training in, what they call, "the salon ritual" as crucial. Central to the ritual is the individual consultation between the therapist and the client. The purpose of which is to find out what the client wants and how the salon can best deliver.

Indeed many new spas are learning that they must improve how they communicate with their clients (particularly potential clients). An issue for many is explaining what "spas" offer, and how these therapies can benefit consumers. Consumers can find the sheer range of therapies overwhelming. Just to take one example, a menu of massage therapies available in some spas can read as if it had been written in the tower of Babel. Consumers are asked to choose from an A to Z list -- Aromatherapy to Zen, with Chocolate and Hot Stone in between.

Many spas recognize the need for more consumer friendly menus. Some offer on their internet site a guide to "Your first visit to a spa." This generally informs potential visitors about "spa etiquette" (for example, arrive early and leave your mobile behind). Indeed so lengthy are some listings of etiquette that they read more like a guide to a wellness variant of a boot camp.

Some spas would need to heed their own words, that is, to relax. They need to fashion themselves or their marketing on the old fashioned spas.

Research director of Diagonal Reports, Jacqueline Clarke has designed and developed the company’s professional beauty market research programme. She directs the Global Salon Panel (GSP) series which analyses and synthesises intelligence on the beauty and well-being markets. Ms. Clarke knows the global market and identifies and tracks key sector trends globally. Ms. Clarke's global expertise covers the largest beautycare/wellness markets worldwide, including the US, Latin America, Europe and Asia. She has worked with some of the largest beauty companies in the US and Europe. Ms. Clarke can be contacted at +353-4695-49027 or dreditor@eircom.net Extended Bio...

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