Planning a Spa? Avoid the Pitfalls

By Gary Henkin President & Founder, WTS International | October 28, 2008

If you're like most hotel and resort developers, it is likely that your site(s) already have or will have a reasonably sophisticated exercise or fitness center for your guests and/or members. But have you considered adding spa services as well? Growth in the spa industry over the past five years has been dramatic to say the least.

A few statistics are worth considering. The spa business is today the fourth largest leisure industry in the U.S. with over $11 billion in annual revenues. There are an estimated 12,000 spas in the U.S. (inclusive of resort and hotel spas, day spas, medical spas and destination spas) which is up 25% from only three years ago. Consumers can now find spa treatments at hotels and resorts, doctor's and dental offices, health clubs, airports, cruise ships and malls. Women account for slightly more than 70% of the market, but spa utilization by the male population has been growing at a rapid rate during the past several years. Currently, about 20% of all spa goers are 55 years of age and older, but the average age of the spa consumer is 40.

With this information as a backdrop, many hotels and resorts are seeking better ways to delineate themselves in the marketplace while others simply want to stay up with competition. The development of a spa has become, in many instances, an almost required amenity. It wasn't such a long time ago that a hotel's description of their "spa" consisted of one or two treatment rooms offering a very limited selection of services. Further, the facility was often located in an inaccessible area of the hotel. That perception has changed dramatically. Spas have undergone a significant transformation. This includes design and equipment upgrades to the numbers, types and diversity of the treatment and services menu. In today's extraordinarily competitive and stressful environment, travelers are often weary when they arrive at their destination and have come to expect a certain level of sophistication in leisure facilities, particularly at more upmarket hotel and resort properties. With hotels seeking to consistently differentiate themselves while meeting the requirements a sophisticated consumer population, the inclusion of a spa can assist in achieving these expectations. Thus, the addition of a quality spa can become an important deciding factor in both individual and group decisions in selecting a particular hotel or resort site.

How then should one best determine whether to add a spa and what size and scope represents the most viable financial and operational modality? Putting it another way, how should a hotel or resort prepare a spa or leisure complex for operational and financial success? It all starts with the planning process! Before taking a "dart throw" approach, consider the potential benefits which can be derived from a needs analysis (or feasibility) study. This step should receive due consideration prior to expending significant capital in the design, equipment procurement and construction of a spa. A needs analysis study will typically offer valuable information upon which the owner/developer can make the best decision whether to proceed to build the spa and, if so, what type, size, scope of services, and location would be most viable. The report should afford the owner a market study, competitive analysis, recommended space allocation and a preliminary operating pro forma. If a decision is made to proceed, spa planning and design can then move forward based on a more circumspective process.

A spa is qualitatively different from other hotel development amenities. In the end, what is being delivered to the patron is more than a service - it is "an experience." As such, design aesthetics will play an all important role in the consumer's mind and in how the spa will eventually perform from a financial and operational perspective. Before the design process has begun, it is beneficial to develop a concept or "theme" for the spa upon which the design will ultimately be based. Remember that a successful spa appeals first and foremost to the senses. Research should be done in developing the spa theme and concept with regard to unique features in the surrounding locale, possible use of indigenous products in creation of signature treatments and what the most appropriate "story" for the spa might be. That said, each property must also consider potential challenges such as upper floor (or below grade) site locations, remote locales with difficult access, etc.

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Sales & Marketing: Selling Experiences

There are innumerable strategies that Hotel Sales and Marketing Directors employ to find, engage and entice guests to their property, and those strategies are constantly evolving. A breakthrough technology, pioneering platform, or even a simple algorithm update can cause new trends to emerge and upend the best laid plans. Sales and marketing departments must remain agile so they can adapt to the ever changing digital landscape. As an example, the popularity of virtual reality is on the rise, as 360 interactive technologies become more mainstream. Chatbots and artificial intelligence are also poised to become the next big things, as they take guest personalization to a whole new level. But one sales and marketing trend that is currently resulting in major benefits for hotels is experiential marketing - the effort to deliver an experience to potential guests. Mainly this is accomplished through the creative use of video and images, and by utilizing what has become known as User Generated Content. By sharing actual personal content (videos and pictures) from satisfied guests who have experienced the delights of a property, prospective guests can more easily imagine themselves having the same experience. Similarly, Hotel Generated Content is equally important. Hotels are more than beds and effective video presentations can tell a compelling story - a story about what makes the hotel appealing and unique. A video walk-through of rooms is essential, as are video tours in different areas of a hotel. The goal is to highlight what makes the property exceptional, but also to show real people having real fun - an experience that prospective guests can have too. The June Hotel Business Review will report on some of these issues and strategies, and examine how some sales and marketing professionals are integrating them into their operations.