Global Spa Industry Trends: Being at the fore front as the industry stabilizes

By Elaine Fenard Partner & Chief Operating Officer, Europe and U.S., Spatality | February 22, 2010

Trends: how you perceive them, what causes them and which ones should you pay attention to... starting with segmentation.

The spa industry has come a long way in recent years, gaining market share and respectability along the way and yet, it is still in itself considered a trend by many. To those of us in the industry it is in fact, a profitable business that is sustainable and more to the point, adds incremental revenue to the bottom line. Add to this the fact that spa is also rooted in ancient philosophy, and you have a business that will increase the value of your asset, and is sexy enough to appeal to the consumer on a level they understand, be it relaxation, instant gratification or lifestyle change.

Spa, now a billion dollar industry in the US, still has a way to go before it stabilizes. Consequently, there are many opportunities for hotel operators to position them selves at the forefront of the industry as it begins to settle and even out. It is no longer a competitive advantage to simply be in the spa business. Both operators and investors now have many decisions to make about the segment they wish to compete in and the guest they wish to target.

Spas and spa- related services are generating mass-market appeal while at the same time developing a sophisticated consumer who frequents spas and seeks a particular experience. This experienced spa consumer, frequently found in the luxury segment, makes travel and wellness decisions based on larger lifestyle and individual needs. While this segment is growing more and more aware of lifestyle wellness spas, the broader population is being introduced to spa services through the resort industry, the cruise ship industry and the local day spa. Because guests' spa needs shift and develop as they begin to become more comfortable in a spa environment, it is evident that each segment of the spa industry feeds the others leading to the conclusion that hotel companies can be in all of the spa markets in the same way they operate in various hotel markets.

This move towards a more segmented spa industry can be helpful in defining and adding to the brand positioning of the hotel. Mainstream spa goers can easily identify the difference between destination spas, resort spas and day spas. Establishing the hotel alliance to one or the other clearly defines who you are and what your spa objectives are. Today's trends diversify the spa world creating a clear connection to the hotel property. As spas manifest into hybrid spas created for niche markets, a thread of continuity emerges that links each of the properties within the portfolio.

Examples of hybrid/ niche markets are...

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The hotel industry has undertaken a long-term effort to build more responsible and socially conscious businesses. What began with small efforts to reduce waste - such as paperless checkouts and refillable soap dispensers - has evolved into an international movement toward implementing sustainable development practices. In addition to establishing themselves as good corporate citizens, adopting eco-friendly practices is sound business for hotels. According to a recent report from Deloitte, 95% of business travelers believe the hotel industry should be undertaking “green” initiatives, and Millennials are twice as likely to support brands with strong management of environmental and social issues. Given these conclusions, hotels are continuing to innovate in the areas of environmental sustainability. For example, one leading hotel chain has designed special elevators that collect kinetic energy from the moving lift and in the process, they have reduced their energy consumption by 50%  over conventional elevators. Also, they installed an advanced air conditioning system which employs a magnetic mechanical system that makes them more energy efficient. Other hotels are installing Intelligent Building Systems which monitor and control temperatures in rooms, common areas and swimming pools, as well as ventilation and cold water systems. Some hotels are installing Electric Vehicle charging stations, planting rooftop gardens, implementing stringent recycling programs, and insisting on the use of biodegradable materials. Another trend is the creation of Green Teams within a hotel's operation that are tasked to implement earth-friendly practices and manage budgets for green projects. Some hotels have even gone so far as to curtail or eliminate room service, believing that keeping the kitchen open 24/7 isn't terribly sustainable. The May issue of the Hotel Business Review will document what some hotels are doing to integrate sustainable practices into their operations and how they are benefiting from them.