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24 Sep 2017 Spa Business Handbook
 

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Spa Business Handbook - Business Talk

Industry insights

From Spa Business Handbook 2016 issue 1
Business Talk


Mia Kyricos tells us about the trends that will have the biggest influence on spa operations in the year ahead

Mia Kyricos, Kyricos & Associates
Brands such as Six Senses are getting much more serious about wellness photo: six senses
name-change to game-change
Massage Envy is one of only a handful of operators to make use of membership models
Sunrise Springs Resort in New Mexico, US, is one of only a few mainstream spas offering mental health recovery
Serenbe wellness community in Atlanta, USA
It’s exciting for spas to be positioned in communities which promote healthy lifestyles

Hotel spas: from name-change to game-change
Over the last 18-24 months, there’s been a considerable shift in spa industry terminology, thanks in part to the 2014 Global Spa & Wellness Economy Monitor which sized the global wellness economy to be US$3.4tn (€3.1tn, £2.4tn). Wellness, originally considered just a type of service offered by spas inclusive of nutritional or lifestyle coaching, leap-frogged in positioning as the umbrella industry representing everything from
spa and wellness tourism to beauty and anti-ageing.

At the same time, the ‘well’-minded consumer has emerged more noticeably. Hotel spas – historically deprioritised behind other departments – have been inspired to reposition themselves along the wellness continuum. In fact, some are successfully extending their lifestyle expertise beyond the four walls of the spa to the overall built environment and programming of the hotel.

This game-change has further inspired a name (and role) change for spa professionals at the property and corporate level. Both Six Senses and Fairmont Hotels & Resorts International (FRHI) now have a vice president of spa and wellness; Hilton a senior director of global wellness; and Lux Resorts a chief spa and wellness officer – all forward-thinkers now better positioned to reconsider the wellness propositions of the entire hotel portfolio, not just spas. We’re seeing similar changes at the property-level as well. Anantara now hosts visiting masters of wellness, while Mandarin Oriental is starting to recruit directors of spa and wellness.

Finally, with Accor’s recent bid to acquire FRHI, and Marriott’s move to buy Starwood, we expect the game-change to continue at the corporate level, hopefully fostering innovation in how today’s hotel spa talent, assets and wellness-related programming are strategically and operationally supported in the months ahead.

Reconsidering revenue drivers: from yield to memberships to retail
According to the 2014 Global Spa & Wellness Economy Monitor, the global spa industry is worth US$94bn (€85bn, £66bn) and while updated numbers are pending later this year, we suspect the sector has likely crossed the US$100bn mark. Various other reports suggest a more buoyant economic climate for spas, increased visitor numbers and new opening. This is largely great news.

At the same time, however, income increases have not always kept pace – the 2015 US Spa Industry Study (see p112) reports a drop of 1.3 per cent in US spa revenues. We believe these modest declines coupled with a rise in competition and consumer awareness for all things ‘well’, will require spa managers to reconsider additional revenue drivers left largely untapped in recent history.

Specifically, we think yield management software programs and membership models, as well as strong retail merchandising strategies, both online and offline, still offer some of the greatest opportunities to secure regular working capital (memberships) and increase revenue per and after visit (retail).

Perhaps most compelling, is the opportunity for spas to better manage dynamic pricing and availability of inventory (yield). This is a practice that software specialists Frank Pitsikalis, CEO of ResortSuite and Dan Chandre, SVP of Booker, both believe spas are still markedly resistant to, regardless of it being long-employed by hotels and airlines and accepted by consumers. Disney Hotels & Resorts just announced that it will offer ‘surge pricing’ in its parks on busy days. Why not spas?

In the end, “gimmicks are outdated, consumers are smarter and you have to be transparent with your offerings”, says Nicolas Ronco, CEO & founder of YeloSpa, an innovator in spa memberships. This includes, we believe, the basic laws of supply and demand.

Wellness lifestyle: from addiction to mental health and recovery
It’s no secret that despite the spa and wellness industry’s promise to cater to the mind, body and spirit, mental health – from depression to addiction – has largely been left on the sidelines of treatment menus. Yet the wellness lifestyle is increasingly championed by cutting-edge integrative healthcare and rehabilitation centres, such as the newly developed Naufar in Qatar. Naufar is a 75,000sq m (807,293sq ft) hospital which specialises in substance abuse and addictive disorders including the related conditions of anxiety and depression.

According to Bryan Hoare, wellness lead at Naufar, the goal of the facility is to improve people’s lifestyles and wellbeing through both clinical excellence as well as wellness-focused awareness and change programmes across 18 focus areas – from movement to massage and nutrition and even socialisation.

Historically, a stigma has existed in the industry around mental wellbeing. Spas may champion mindfulness and meditation as proactive wellbeing practices, but a scarce few use them in the treatment of mental health and emotional trauma. Amy McDonald, owner of Under a Tree Health & Wellness Consulting advises spas to remember when developing programming that “mental and emotional health is paramount for individuals to find and maintain healthy lifestyles”. We’re beginning to see an awareness of this deficit among spa owners and managers and expect it to influence menus and service protocols.

Sunrise Springs Resort in Sante Fe, New Mexico, for example, has modified principles of addiction and mental health recovery to work in a wellness resort environment with a menu of medical, psychological and spa-related services.

Elsewhere, Switzerland’s Grand Resort Bad Ragaz has a mental health department; Green Valley Spa in the US caters to war veterans suffering from post-traumatic stress disorder; and Spa Eastman in Canada promises fresh starts for divorcées. The opportunity now is for spas of all sizes, to no longer leave the mental health of their patrons unchecked. 

Community wellness: from stand-alone spas to standalone cities
In May of 2015, several owners, developers and senior spa and wellness stakeholders, convened for the first time as part of the newly developed Wellness Communities Initiative, which was sponsored by the Global Wellness Institute (see p82). The goal of the group was to meet monthly, share best practices from pioneering sites and provide resources for the effective development of wellness-related real estate – mostly focused on large, multifaceted, residential communities – in the months and years ahead.

Wellness communities are defined by the group as “communities and buildings proactively developed with the holistic health of its residents, guests, environment and surrounding community in mind”. Such sites have begun to surface in earnest around the world, from Latin America to Europe and Indonesia. Some developers plan to extend beyond this: to create an entire residential community, such as Serenbe in Georgia; or an eco-village such as BedZed in the UK. In Florida, work is underway on a full wellness city called Lake Nona, while a Destination Medical City is on the cards in Minnesota, home to the Mayo Clinic.

What’s most exciting about these developments is the opportunity for spas and integrative health resorts to eventually exist in a place where healthy lifestyles are not only promoted in their treatment rooms, but also actively supported as a core value of its surrounding community. Characteristics of these communities may include but are not limited to: access to nature, fitness facilities, mind-body programming, green building, freshly grown and locally-sourced foods, cutting-edge medical and wellness-driven facilities, and in some instances, wellness programming that extends beyond homes to places of work, play and education.

We believe that today’s spas – traditionally standalone facilities in bustling cities or part of hotel brands with disjointed consumer experiences – will soon have the opportunity to serve as the heart of wellness communities purpose-built with health and healing in mind. And one can hope that by existing in these shared communities, more investment can be made in the treatment of consumers versus the marketing historically required to both inform and attract them.


About the author:

 

Mia Kyricos
 

Mia Kyricos is the president of Kyricos & Associates, strategic advisors in spa, wellness and hospitality. During her 20-plus-year industry career, she’s worked for companies such as Spafinder Wellness, Starwood Hotels, EXOS and Exhale.

Email: mia@kyricos.com

Tel: +1 207 200 3683



Originally published in Spa Business Handbook magazine 2016 issue 1

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