Trends in the Hotel Spa Industry
By Peter Anderson Founder, Anderson & Associates | October 28, 2008
Today in most resorts the inclusion of a spa is no longer a luxury, but rather a standard amenity, expected and ubiquitous. Significant cross pollinating among the day, medical, amenity, and destination spas has created a competitive and comprehensive spa environment that here-to-fore that has never been experienced. This dynamic has created the phenomenon of Spa Wars, where product differentiation is subtle and the competitive edge can be paper thin.
It is ironic that as the spa industry matures, distinctions between spa types are becoming blurred, resulting in subtle levels of segmentation and product differentiation that provide "options" to the savvy spa goer and "confusion" to the rest of us. Historically, hotel and resort spas have been classified as either "destination" or "amenity", meaning they were either the specific reason to travel to a remote location or they were and an added amenity (sometimes created as an after thought) for the an indulgent resort clientele.
In many cases consumers were forced to make a choice between the comprehensive programs of a destination resort and the multi-star, multi-diamond experience of an amenity resort. The decision process is becoming less and less "either/or". While destination spas are expanding upon their services and facilities, amenity spas are beefing up their programming and treatments, both in an attempt to address market expectations.
For both amenity and destination spas this is big business with significant, up-front cap-ex, often north of $500 per square foot. The result is a situation where amenity spas have become one of the main financial drivers of the resort environment, helping build occupancy, drive rate and enhance yield. And in response to the shift in prominence of the amenity spa, destination spas have enhanced the guest experience relying on personalized guest services, careful attention to thread counts and expanded wine lists. The dance continues as market expectations steadily ratchet up the ante. In resort environments where residential, fractional, and condo and timeshare inventories are part of the development luxury spas offer residential guests healthy-living opportunities. There is much common ground; however, within the context of both Destination and Amenity spas there are a number of issues that are germane to both segments. Our top five issues and trends for the spa industry in 2006 are summarized below.
1. Person-Power Shortage
The spa industry needs a few (more) good managers! Good therapists do not always make good managers conversely classically-trained managers focusing on the bottom line can sometimes miss the unique cultural nuances of a smoothly-run spa. Managers who concentrate only on the bottom and the spa's short-term successes often make decisions that tend to increase the level of cannibalization of personnel in the management ranks of spas. It is relatively common to see seasoned managers in a particular market with resumes that include the majority of the competition. Longer-term focus on operations is starting to become the norm. Increased emphasis on management's training and service delivery is what is keeping spas competitive.