Ms. Clarke

Spas, Health & Fitness

The Implications of 'The Spa Effect' for Hotel Spas

By Jacqueline Clarke, Research Director, Diagonal Reports

A new millennium of spa-expectations?

I have coined the term "the Spa Effect"(TM) to refer to a major growth driver not just in spas, but in the wider personal care services market. That driver is the belief that an investment in a personal care regime, like an investment in a health care regime, is beneficial for well-being in the short term, and for the quality of life in the long term. Personal care regimes, like other regimes, are more effective when used in conjunction with products. Spas are one of the biggest winners of this new consumer attitude.

The expectation of a beneficial payoff from a personal care regime is the result of a combination of a number of different factors and of social developments. Among these factors are the larger numbers of appearance-conscious but ageing baby boomers, and higher levels of health-awareness, along with knowledge of product development in related fields. The latter is due to the enormous media attention devoted to, for example, in the health field the "wonder drugs" (such as Botox and Viagra), in skincare to new anti-ageing products, and in food to the many nutritionals (that promise the added value of health).

Results are required

The expectation of a pay off from a personal care regime changes consumers' perspective on, and the demands they make of, a range of personal care services and products. The expectation of long term pay off that makes consumers willing to spend more money and time on appearance enhancement also makes consumers more demanding. Many now look for measurable results from their investment. Indeed much as consumers have come to expect that spending on health care is measurable, many now expect the same from appearance enhancement.

Spa concept

Spas have been one of the biggest winners of the new consumer perspective on personal care and appearance enhancement. In barely a decade, spas have come from almost nowhere to a $11 billion industry.

The growth of the spa concept is based on the package of appearance enhancement (personal appearance/anti-ageing) treatments with wellness. Other businesses, among them beauty salons and fitness centres, may sell the same services but they do so in ways that are less convenient or less appealing than spas.

Convenience appeals

Spas are more convenient for consumers in search of appearance enhancement because they offer "head-to-toe" care under the one roof. As spa managers tell us: the traditional salons that specialise in one treatment, hair or skin suit fewer and fewer women. They require women who want hair care and skin care to visit two different establishments. But the typical spa that offers head-to-toe care is more suited to busy mid- to up-market consumers. It offers them hair and face care, skin, nail, and hands/foot care.

Many spas, particularly the larger-sized ones, also offer body care treatments, wellness and even lifestyle therapies. It is only possible to sell beauty/massage treatments for body parts other than the face/head and hands, where private rooms are available. In the typical spas beauty treatments account for most income, but in hotel spas massages can account for 45% of income.

Easy self-improvement

The spa wellness package is more appealing than what the competitors offer. Spas promise the pleasurable can improve well-being, for example, that a de-stressing massage and water treatment can reduce the negative effects of sedentary, but stressful lifestyles. The message of existing competitors to spas in health/fitness, such as fitness clubs, is more harsh: they only promise well-being to those who work out.

Indeed the numbers of adult Americans who get a massage (40 million who could spend $11 billion a year - estimates vary) is now equal to fitness club membership. The massage, like the spa industry, benefits from demand by ageing baby boomers for gentle wellness therapies. The endorsement of the therapeutic benefits of relaxation by trusted health organizations has had a significant impact on demand for longer established and more familiar treatments.

New entrants

Strong growth of the spa concept has tempted many players to enter the new market. They include those who re-brand a hair/beauty salon or fitness facility (recreational sports, weight loss), or diversify an established business, among them hotels, health care (massage, alternative health, hospitals, nursing home), residential complexes, shopping malls and airports. There are now more than 12,000 spas in the USA -excluding ship-board. Most are new and more than half have opened since 1999.

The many billions of dollars invested in the spa concept by US companies at home --and abroad- is one way of measuring the competition that is out there for consumers' spa dollars. To win that business the different types of spas continue to experiment with the package of services they offer. Many hope to come up with a formula that can be rolled out nationwide.

One of the most recent developments -and most publicized- is the medspa. This fastest growing type of spa combines spa and medical services, largely non-surgical beauty (anti-ageing) procedures. The medspas are raising the ante for all players in the spa market - some have upgraded -once more-to meet the challenges that they pose, in particular the promise of a more youthful appearance.

But the competition in the spa market, particularly for accommodation-based spas, extends beyond the commercial. It now includes what is a residential spa market. That is, billions of dollars spent each year by Americans on bathroom remodels ($7 billion) hot tubs (also called spas), pools, and even the home spa. Indeed upmarket hotels -recognizing the widening gap between the two have upgraded their bathrooms to ensure they are on par with those in luxury homes.

Hotels best placed to benefit

Hotel managers -in many very different countries- tell us that hotels can grow their share of the spa effect market.

Many identify the best prospect as, what consumers see as a prime relaxation amenity: water. Where available, water facilities and programs are among the most popular in fitness clubs - indeed a thermal pool can be more used than the gym. Water is popular with managers of spas and hotels, as some observe: "a full service spa versus a hydrotherapy area - it's a no brainer in terms of costs," and of capture rates. Some managers suggest that water facilities increase profits twofold.

But in a spa market that is dominated by individual practitioners, and small businesses few can profit from demand for water-based relaxation as the initial expense is a barrier for all but the best resourced. Only 25% of fitness and sports clubs offer water-based programs. Some spas try to meet consumer demand for water by partnering with hotels.

Hydrotherapy areas for recreation or therapy can include showers, springs, pools (including "passive exercise" or "counter-current swimming" pools), tubs, baths (steam, thermal, seaweed, Finnish, Roman, Turkish).

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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