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HOTEL BUSINESS REVIEW

JULY FOCUS: Hotel Spa

 

Riding the Hotel Spa Roller Coaster

By Trent Munday Senior Vice President, Mandara Spa | July 2016

As I mentioned here once before, in an earlier article titled Demystifying the Hotel Spa , the hotel spa business has been a bit of a roller coaster ride over the past 20 years or so. Like all good roller coaster rides, the most exciting bit is when you start rolling down from the peak, zigging and zagging, twisting and turning, screaming with a mixture of delight, adrenalin and sheer terror - but that part of the ride is also what puts many people off. It's not for everyone.

In many ways, the hotel spa business today is on that same exciting part of the business cycle. Just like that crazy roller coaster ride, this part maybe isn't for everyone. Some may prefer to get off here. But for those who hang on and ride it through to the end, they'll probably be so glad they did.

The Great Hotel Spa Race

The hotel spa business as we know it today, really began in the early to mid-1990's, but the seeds were sown well before. Prior to 1990, if you wanted a massage in a hotel, it usually meant going down to the gym where they would have one or two small rooms off to the side with a massage table inside. The facilities were pretty basic, as were the treatments. No frills, no soft touches, no nice aromas. Instead, you got a hard table, with a thin sheet and the pervasive aroma of menthol sports oil in the air. Want some mood lighting? Sure. We have two settings - lights on or lights off. These were the days when hotel management knew little about spas and hotel guests knew even less. Yes, things were much simpler back then.

Then came the boom! Somewhere around 1995 hotel spas started springing up all over the place. The Great Hotel Spa Race had begun. In Asia, this coincided with the Asian Financial Crisis. This was a time when hotels all over Asia were being hit hard by unsustainably low occupancies and revenues. At a time when hotels were desperate for any additional revenue they could get, someone realized that if they took the bed, desk and chair out of a few guest rooms and replaced them with a massage table, then hire a couple of masseuses, they all of a sudden had a new service and facility to offer their guests - a spa.

A hotel that could offer a spa now had a true USP. Something that helped it stand out from the crowd. A genuine marketing advantage - and of course an additional revenue stream too. However, as the idea took hold, more and more hotels started to do the same. This is where the boom really began. Hotels were soon locked in a battle of one-upmanship in an effort to win the hearts and wallets of the new spa tourist (be it for business or leisure). And this is where things started to go wrong for hotels. Many of them drank the Kool-Aid. They bought into the belief that, to paraphrase Kevin Costner, ‘if we build it, they will come.'

Unfortunately, as a result of this, there has been a trend over the years of hotels overbuilding their spas. Usually this comes down to something as simple as overestimating the demand. Hotels, due in part to getting caught up in the euphoria of this mystical new thing called spa, often ended up with an unprofitable business unit. Before too long, these hotels are stuck in a bit of a downward spiral of trying to ‘fix' their spa business. For city hotel spas, a simple answer seemed to be getting more spa guests from outside the hotel. Local memberships, guests from other nearby hotels with a lesser spa offering, office workers coming in for treatments on their lunch break or after work were all thrown up as possible solutions. Invariably, whilst these initiatives certainly helped, they usually didn't provide a total cure for the hotel spa that had been overbuilt.

To Be the Best - Or Not

In this situation, your typical city hotel has two options. Firstly, they could double-down on the spa and set about making it truly stand out as the best spa in the whole city. If they do this, then maybe there's a chance they can attract the more spa savvy spa consumers in town. It could almost become a destination spa within a city hotel. The other option is to downsize and minimize. Reduce the spa offering and just have enough to satisfy the basic spa requirements of your guests.

Interestingly, hotels have actually been through all this before - back in the days of the Great Hotel Gym Race. The evolution of the hotel gym was very similar to the evolution of the hotel spa. A few hotels added them, they provided big competitive advantage, then other hotels decided they had to keep up, before long every hotel had one, until today a gym is no longer a USP. Some of the bigger hotel gyms have tried to compete with standalone fitness centers (and usually failed), while most have given up on the dream and just provide the bare minimum gym facility to meet the bare basic requirements of the few guests who actually use it and took back the rest of the space for something else.

The risk with the double-down approach is that it now becomes a more complex marketing challenge, with two main tasks.
Firstly, they need to make sure they have the right offering to be considered the best spa in town. The risk here, is with an industry that has historically been very fad and trend driven and is still a long way from maturity, to have the best often means having not just the greatest, but also the latest. So this will probably mean a big ongoing financial commitment to ensure the spa stays fresh and ahead of the curve in terms of facilities, treatments and products.

Secondly, they need to then spread the message that they do in fact have the best spa in town. Advertising, Public Relations, Branding, Social Media, Traditional Media all play a part in this task.

The risk now though, is that whereas before the market was everyone in the hotel, the market is now everyone in town. Previously, the hotel just needed to convince its in-house guests that an hour or two in the spa is a better use of time than sitting in their room watching TV or pretending to catch up on work. But now, the spa is competing for the attention of a city dweller who is probably so caught up in their day to day life that they don't even see or hear the message the hotel is trying to deliver. The competition is now not only every other hotel spa and day spa and salon in town, but also just about any other thing that city dweller has to or wants to do during the day - not just the lure of slightly uncomfortable armchair and a flat screen TV.

The risk of the downsize approach is that the spa might be seen as so basic that it shouldn't really be called a spa. In some countries there are active spa associations and bodies that set minimum requirements for a spa. If this is the case in your country, if you downsize too much, maybe you can't say you have a spa anymore. The knock on affect here is if your hotel ratings body requires you to have a spa to qualify for a certain star rating, you've just lost a star.

Doing the Double-Down

So which way will your hotel go?

If you decide to hang on for the ride, the good news is it might not be as complicated or expensive as you think - if you follow my lead. Instead of trying to become the biggest and best spa in town with all the latest and greatest gadgets, gizmos, treatments and products, why not try to re-invent what a hotel spa is? Stay with me here.

Why is it that the capture rates (i.e., the % of hotel guests coming to the spa) in most city hotel spas can be as low as 1% - 3%? Maybe it's price? Maybe it's location? Maybe. Or maybe it's simply because the spas are offering something that the guests just don't want. Ever think about that?

Here's a cray idea - why not spend some time talking to your guests. Find out what they want. Don't just ask what sort of massage or facial or manicure they want. Ask them about what sort of services and facilities they want in general while they're in your hotel. It always amazes me that hotels have at their fingertips, every night in the rooms upstairs, the best market analysis tool there is - the customer. Yet how many hotels really use it? I'm not talking about a generic Guest Questionnaire. I mean real discussions with actual guests about what they really want. Find out what your guests want and then ask yourself, ‘How can incorporate that service/offering into my spa?'

Confused?

Here's an example. Say a guest tells you he'd really love to get his shoes shined every night but the first thing he wants to do when he walks back into the hotel after a day of meetings is stop in the bar for a couple of drinks and then by the time he gets back to his room to take his shoes off housekeeping has already gone for the day so he can't get his shoe-shine. How can you give him what he wants? The simplest answer might be to just keep one shoe-shine guy on for a few extra hours in the evening.

But what if you could create a space where the busy corporate traveler could come back in after a tough day pounding the pavement, slip his shoes off and sit back with an ice cold beer, while getting a relaxing foot & leg massage, then when it's over, get his shoes back looking brand new, having just had a thorough polish? You've now solved the one problem the guest told you about - the inability to get a shoe shine after 6pm - but you've also helped solve another problem he didn't tell you about - relaxing after a tough day. And in solving these problems you've created another service that this guest will gladly pay for. So that's another revenue stream too.

Apply the same thought process to the morning ritual of your corporate travelers. Think about the female executive who has to spend time with the blow dryer in the morning, styling her hair, then put on some make up, then maybe touch up the nail polish. How much would she love your hotel if there was a place she could go in the morning to get that all done for her? We're not talking about your typical spa pampering experience. This is more a combination nail salon/hairdresser/make up stand. And all this in a place where she can also grab a cup of coffee and some muesli to kick off her day. Who needs a full buffet breakfast?

Instead of your hotel spa being a place for pampering, think about it more in terms of a functional service center. Just like you drop your car off for a wash and vacuum and have a coffee and donut while you wait, why not allow your guests to drop their body off for a bit of servicing and have some fruit, yoghurt and coffee at the same time.

The Downsize

Now, if you decide the more prudent option is to downsize and reduce your exposure to the high utility costs and payroll expenses of having a full blown spa in your hotel, what can you do?

Remember those early days of hotel spas we spoke about above? Back then, existing hotels wanting to get on board the hotel spa gravy train didn't have the time, money or space to build a dedicated spa facility. What did they do? Converted an existing hotel room into a treatment room, mainly by swapping out some furniture.

So maybe, for the hotel where the spa is just not working, for whatever reason, the best option is to close it down, take the space for something else - an F&B outlet, a mid-level executive lounge (think premium economy class vs. business class), etc. - and take over a few hotel rooms to convert into spa rooms. This way they can still offer spa treatments so they don't upset any guests or those sometimes pedantic ratings bodies, they can re-invent the old spa space with a concept that will work better for their market and create more value, and maybe they don't even technically need to lose room inventory to do it.

If they're smart in the way they do the conversion of guest room to spa room, it would be simple enough to re-convert that room back into a guest room again as, when and if needed. Take out the massage table and bring back the bed, desk and chair. Voila! Sure, in this case they run the risk of potentially upsetting a few guests that may want a massage during this period when the spa rooms are effectively out of order. However, if the hotel is running at 100%, that room will probably generate more profit for the 24hrs as a guest room, rather than a spa room.

This downsizing model can be even more efficient if the hotel can find an on-call massage service to provide the labor. Yes, in the past there has been a lot of negative connotations around on-call massage services, but remember in most of those scenarios, the ‘treatments' are happening in the guest room. In the model we have here, the therapists have a dedicated spa treatment room, properly set up, so there should be less of an expectation of ‘hanky panky'.

App based companies like Zeel and Soothe in the US provide a perfect solution for the hotel who wants to adopt this type of Spa-Lite model. And it's only a matter of time before we see other companies cloning these businesses in other countries around the world.

Here Ends the Lesson

In his play The Tempest, Shakespeare wrote, ‘what's past is prologue'. That phrase has been commonly interpreted as meaning the past determines the future. But what he really meant, in context, was it doesn't matter what happened in the past, it's only what we do in the future that matters. So, instead of worrying about how hotel spas have been done in the past, think about what is needed today. Talk to your customers today and find out what they want.

Henry Ford somewhat scoffed at the idea of market research when he supposedly said if he'd asked people what they wanted back in the late 1800's, they'd have said they wanted a faster horse, not a car. Steve Jobs apparently seemed to think the same way. So, if you think you're as smart and innovative as these guys, then fine, don't bother asking your guests. Alas, for most of us, it's probably fair to say the guest has a better idea of what they want than we do. So let's ask.

Spas have been an important addition to the hotel offering over the past few decades. They can continue to be so in the future. However, we need to remember that the spa industry itself is still relatively early on in its evolutionary path. As with all businesses, hotel spas will need to evolve and adapt to stay relevant.

Don't get too caught up on the past, focus on the now, the future will come soon enough.

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If any provision(s) of this Agreement is held by a court of competent jurisdiction to be contrary to law, then such provision(s) shall be construed, as nearly as possible, to reflect the intentions of the parties with the other provisions remaining in full force and effect. HotelExecutive's failure to exercise or enforce any right or provision of this Agreement shall not constitute a waiver of such right or provision unless acknowledged and agreed to by HotelExecutive in writing. The section titles in this Agreement are solely used for the convenience of the parties and have no legal or contractual significance. This Agreement may be assigned in whole or in part by HotelExecutive. This Agreement may not be assigned in any manner by you without the express, prior written permission of HotelExecutive.

Any and all disputes or controversies of any kind, including but not limited to any performance, duty, obligation or liability arising under or related to this Agreement which are not first resolved informally, shall be determined by binding arbitration in San Francisco, California, in accordance with the rules of the American Arbitration Association. The final award in any such arbitration proceeding shall be subject to entry as a judgment by any court or competent jurisdiction, provided that such judgment does not conflict with the terms and provisions hereof. The jurisdiction of the arbiter (or arbiters) with respect to legal matters shall be limited only by the statutory and common law of the State of California and the United States.

Notwithstanding the foregoing, any and all disputes, which the parties cannot informally resolve, regarding the scope of issues or matter with the jurisdiction of the arbitrator, shall be resolved by a separate dispute resolution process whereby HotelExecutive, in its sole discretion shall elect the dispute to be resolved by either (1) a court of competent jurisdiction in the State of California or (2) a panel of three new arbitrators.

This Agreement shall be governed by and construed in accordance with the laws of the State of California notwithstanding any conflict of laws provisions. You and HotelExecutive agree that the venue for all legal disputes, controversies, actions of any kind arising under or related to this Agreement shall be San Francisco, California. You and HotelExecutive further agree that in case of any litigation regarding this Agreement, you irrevocably and unconditionally (i) consent to submit to the exclusive jurisdiction of the state and federal courts in the County of San Francisco, California for any litigation or dispute arising out of or relating to this Agreement, (ii) agree not to commence any litigation arising out of or relating to this Agreement except in the California Courts, (iii) agree not to plead or claim that such litigation brought therein has been brought in an inconvenient forum, and (iv) agree the California Courts represent the exclusive jurisdiction for all litigation relating to this Agreement.

11. MEMBERSHIP FEES

Hotel Business Review Subscriptions

If you choose to purchase a subscription, member subscription payments can be made in U.S. Dollars, as well as a variety of international currencies. Membership terms are Annual Recurring, and Monthly Recurring. The Annual Recurring subscription is an annual commitment and subscribers will be charged each consecutive billing cycle. Annual Recurring subscriptions can be cancelled after the first billing cycle and within 30-days of the billing date for a full refund. Monthly Recurring subscriptions are ongoing and subscribers will be charged each consecutive monthly billing cycle. Monthly Recurring subscriptions can be cancelled after the first month and within 7 days of the monthly billing cycle for a full refund.

12. PAYMENT AUTHORIZATION

Payment for the services provided to you in, at, through or in association with HotelExecutive may be made by automatic credit card, debit card, direct debit, bankwire or Paypal and other approved payment means offered in, at, through or in association with HotelExecutive, and you hereby authorize HotelExecutive and its agents to transact such payments on your behalf.

You hereby authorize HotelExecutive's Internet Payment Service Provider to charge your credit card to pay for your membership to HotelExecutive. You further authorize HotelExecutive's Internet Payment Service Provider to charge your credit card for any and all purchases of products, services in association with HotelExecutive. You agree to be personally liable for all charges incurred by you in association with your access or other use of any content provided by HotelExecutive or any third party in association with HotelExecutive. You acknowledge and agree that your liability for all such charges shall continue after termination of your access or any type of membership arrangement with HotelExecutive.

In the event that you have chosen to have your membership automatically rebilled, unless and until you notify HotelExecutive that you wish to cancel or terminate your membership to HotelExecutive, you hereby agree and authorize HotelExecutive's Internet Payment Service Provider to automatically renew your membership to HotelExecutive on a continuing basis and to charge your credit card (or other payment means you have selected) to pay for the ongoing cost of your membership. You hereby further authorize HotelExecutive's Internet Payment Service Provider to charge your credit card (or other approved payment means you have selected) for any and all purchases of products, services and entertainment provided to in, at, through or in association with HotelExecutive.

13. PRIVACY POLICY

The following is the Privacy Policy for HotelExecutive

We can be reached via telephone, email, or online at our contact page. When you visit our site we do not log any information regarding your domain or email address. Information Sharing: We do not share user information with any third parties other than via press release distribution as described below.

Hotel Newswire is a newswire service that distributes press releases on behalf of our users. If you decide to submit a press release for distribution through our system we will transmit your entire press release including any personal information therein contained to our media contacts and online distribution points including search engines. This is the only redistribution of your information that we engage in. Your submission of press releases through our system indicates consent with this policy. The information we collect during your registration process is used to notify users about updates to our service and inform users of any special events hosted by Hotel Newswire. This information is not shared with other organizations for commercial or non-commercial purposes.

Cookies: Our system requires the use of cookies to enable the user to log back into our website to access information from the newswire, without having to log in each time using the required username and password.

If you do not want to receive email from us in the future, please let us know by following instructions included in our communication with you. Users who supply us with telephone numbers online may receive telephone contact from us regarding their account, or informing them of new products and services available on the HotelExecutive website. If you do not wish to receive such telephone calls, please edit your account and remove your phone number from your account profile. This can be done from your user account menu.

Ad Servers: We do not partner with or have any relationship with any ad server companies. From time to time, we may use customer information for new uses not previously disclosed in our privacy notice. If our information practices change at any time, we will post the policy changes to our website to notify you of these changes and provide you with the ability to opt out of these new uses. If you are concerned about how your information is used, you should check back at our website periodically.

Upon request we provide site visitors with access to all information (including proprietary information) that we maintain about them. Users can access this information by logging in to their account.

Security: We always use industry-standard encryption technologies while transferring and receiving user data exchanged with our site. We have appropriate security measures in place in our physical facilities to protect against the loss, misuse, or alteration of information that we have collected from you on our site. We do not store credit card information in our systems.

If you feel that this site is not following its stated information policy, you may contact us.

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