Ms. Fenard

Spas, Health & Fitness

Understanding the International Spa Market

By Elaine Fenard, Partner & Chief Operating Officer, Europe and U.S., Spatality

According to the recently released report, "The Global Spa Economy 2007,"* the international spa economy is estimated to be worth a staggering $255 billion per year, $46.8 billion of which are directly related to spa services and operations. Suffice to say, the spa industry has grown tremendously in the past several years as demand throughout the world continues to increase. As developers, owners and hoteliers look beyond their own borders in which to invest and operate, it becomes increasingly important to understand the various markets and their implications on specific spa operations. Whether you are making a forray into new markets, or simply trying to market your existing location to a more international audience, the complexities, sensitivities and expectations for spa around the world will vary considerably, and proper attention should be paid to the nuances in order to ensure success.

Cultural Considerations

While there exist general rules of thumb about all regions and cultures, it is wise to first embark on a markets research and feasibility study to gain a clearer understanding of what "spa" means to your new audiences. Such a study should include a segment on guest research and expectations, thereby guiding you more specifically on a number of considerations such as:

• Gender: What is the expected guest ratio of women to men? Should the treatments vary between the genders? Are co-ed lounge or wet areas acceptable? Do strict divisions between the genders need to exist? Are treatment menus by gender advantagous?
• Treatments: Does the mix of treatments reflect the preferences of a given culture? For example, while visiting a spa, U.S. spa guests book massage 55% - 60% of the time while many European countries view spa as synonymous with bathing.
• Spaces: Are spaces allocated not only to maximize revenue but also to reflect cultural preferences? For example, in Italy, pedicure treatments are often conducted inside of the treatment room, where in the U.S. most pedicures are provided in a separate manicure/pedicure area.

Spa Brand Types: Hotel Brands and Corporate Spa Partners

Paying attention to cultural preferences and expecations is critical in understanding the international spa market, as is selecting the overall type of spa: A bathouse concept, dayspa model, full service resort-style spa? Determining the spa type is one of the most important decisions you make. Be careful not to simply follow market trends without a sound business plan. As tempting as it may be, jumping at a current trend could prove unwise if not thoroughly researched on the front end. The simplest way to ensure you are assessing the opportunity, while also being progressive and guest-focused, is to stay true to the hotel brand and core values. This is evidenced in Fairmont's Willow Stream Spas; Jumeirah'sTalise Spa; Hyatt's Stillwater Spas; Westin's Heavenly Spas; and W Hotels' Bliss.

Applying an existing corporate partner spa is another route. Such spa brands are already developed and have achieved a level of guest awareness and in some cases guest affinity or preference. Spa brands such as Mandara and Nectar do a good job of ensuring that guest expectations are met and that certain standards are maintained, while also offering a 'freedom within the framework' where a degree of customization may be employed into the design and programming to cater to cultural customs and preferences. Additionally, corporate spa partners also can offer financial advantages via purchasing power and marketing efficiencies.

Spa Segments

The growth of the spa industry has given rise to more specific spa segmention, particularly as it relates to regional preferences and practices around the world. For example:

Residential Communities - Canyon Ranch, Miraval, La Prairie and Chopra Centreare all currently planning or launching spa communities with a residential component. While this trend has yet to be proven, according to the Global Spa Economy 2007 report, Global spa report* initial findings show a likelihood for success should the industry continue to trend upward. Many of these residential spa communities are currently being planned in the U.S., Europe and the Middle East where they can be adapted to the local environment and provide healthy living alternatives.

Integrated Health - Integrated Health Spas are traditionally found in destination spas and medical facilities, yet we are now beginning to see them in mixed-use developments with spa as the catalyst for the entire area. This model requires highly skilled staff under the guidance of a physician and a medical team, and content driven programs address the individual from a whole-health perspective. This model actually dates back centuries and can be found in varying degrees ranging from taking the waters in Europe to Ayruvedic principles in India and TCM in China.

Cosmetic Spa - The true cosmetic spa is focused on providing a variety of cosmetic orientated services such as cosmetic surgery, Botox, and the like, where the spa component beomes the driver for the medical services. With the cost and proficiency of cosmetic surgery in many countries becoming well known, the international opportunities are appealing, particularly as cosmetic/medical tourism becomes more common. The marketing appeal is: go on vacation for medical treatment and recover in luxurious, pampering surroundings and arrive back home relaxed and looking 10 years younger.

Fitness/Adventure Spas - Perhaps the most appealing model for a cross section of age groups, especially the active baby boomer and Gen X generations, these spas are focused on living well and offer a variety of fitness activities balanced with education on healthy living, augmented with alternative treatments and an array of traditional spa treatments. We see these models popping up all over the worlds, and it also works well with a residential component as it epitomizes healthy living and general wellness.

The three and four star market - Spa has clearly moved more mainstream as the discretionary income in this demographic has increased and spa treatments are no longer just an aspiration or luxury purchase. It is said this guest enjoys a spa break at any time. Spa brands entering this space should offer a scalable model designed to complement the urban and resort market.

Regardless of brand types and segmentation, one thing is universally clear across all geographic spa markets: The real impact of spa on lift and occupancy. Various independent studies show this realization, as well as the impact that spa guests typically increase length of stay. For example, one study shows the average duration of a stay at a Relais& Ch^ateaux property that has a spa is 32% longer than the global average at a Relais& Ch^ateaux without a spa. Or take for example the figures from the Leading Hotels of the World's experiential spa packages, which in November 2006 showed an average daily rate (ADR) of US $525, with a premium of $110 over the company's overall ADR of $415. Sales of experiential packages doubled in 2006 in comparison with 2005.

Across the globe, international markets are thirsty for spa like never before. It's up to us, the industry, to quench that thirst in the most efficient, sensible and culturally-sensitive way.

*SRI International (formerly Stanford Research Institute)

This article was co-authored by Brad Fixler, a Partner & Chief Marketing Officer for Spatality. He has worked in the field of marketing, advertising and brand building for more than 17 years. In addition to leading Spatality's marketing efforts, Mr. Fixler also serves as president of the Denver-based branding and advertising agency, Fixler Davis, Inc where he specializes in creating brands, brand positioning and marketing strategies. During the agency's tenure, he has worked closely with Spa Strategy to help its clients create new spa brands and marketing campaigns. Mr. Fixler can be contacted at or brad@spatality.com

Elaine Fenard is an integral partner in Spa Strategy, one of the world's leading spa consulting and design firms. Joining in the Spa Strategy quest to create innovative and profitable spas, Elaine brought to the team more than 25 years experience in spa development and operations with one of the world's largest hotel companies and the leading international spa operations company. As an industry pioneer and recognized expert, Elaine is a frequent speaker at many conferences, and is a regular guest speaker at Cornell University. Ms. Fenard can be contacted at 303-573-8100 or Elaine@spastategy.com Extended Bio...

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