17 Jul 2018 Spa Business Handbook
 

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Spa Business Handbook - Skin Deep

Global Research

Skin Deep


Cosmetic services are a fast-growing subsection of the beauty and anti-ageing market, but few luxury hotels are reaping the benefits. Fabian Modena and Matthew Brennan outline the findings from a new study – and the opportunities for the industry

The US represents the largest market in non-surgical cosmetic treatments photo: shutterstock/puhhha
The facial aesthetic market alone could grow at a rate of 10 per cent until 2020

The global wellness economy is growing at an unprecedented rate, and was valued at more than US$3.7tn in 2015. Making up the largest share of this is the beauty and anti-ageing market, which was valued at US$999bn – nearly twice the size of the wellness tourism market (US$563bn).

Within the beauty and anti-ageing market is the subsection of cosmetic beauty services. In today’s market, the word ‘cosmetic’ is used to serve the purpose of enhancing or augmenting external beauty, or for perceived physical improvement – and this subsection is growing quickly. Upscale and luxury hotels have an opportunity to capitalise on this, adding revenue with low-cost/high-margin treatments including longevity, aesthetic and detoxification treatments.

Invasive, non-invasive and minimally invasive
The cosmetic beauty services industry is commonly divided into three subsections: non-invasive, minimally invasive and invasive treatment or surgery. Minimally invasive procedures can be further subdivided into injectables and energy-based and cosmeceutical services.
Invasive treatments are surgical procedures that penetrate the skin by either cutting or piercing, such as liposuction, breast augmentation, eyelid surgery, tummy tucks or nose surgery. Non-invasive treatments do not require any penetration into the skin, and also cover a number of diagnostic and therapeutic procedures, including chiropractic manipulation, physical therapy and heat therapy.

Minimally invasive treatments are a combination of medical and beauty services, where the treatments may incorporate high-tech skincare and result in noticeable cosmetic changes or improvements. This includes injections such as Botox, dermal fillers, lipofilling and microdermabrasion, as well as lasers, chemical peels and cosmeceuticals – a combination of cosmetics and pharmaceuticals.

Medical aesthetic treatments
The international medical aesthetic treatment market is expected to rise to US$6.56bn by 2018, led by non-invasive treatments such as Botox, but also including a variation of energy-based services such as radio frequency and laser treatments, driving future medical aesthetic demand globally. The US represents the largest market in non-surgical cosmetic treatments, followed by Asia and Europe; however, the highest growth rates are being seen in Asia.
Minimally invasive treatments are gaining in popularity, as they require little to no downtime, often deliver immediate results and require very small incision or injection sites, resulting in less pain and very few post-procedure complications.

The facial aesthetic market specifically is expected to grow at a rate of 9.82 per cent until 2020, and a shift from invasive to non-invasive treatments is already evident. Between 2015 and 2016, the most significant growth rate was for photo-rejuvenation – a skin treatment that uses lasers to treat wrinkles or age spots – which grew 36 per cent and accounted for more than 650,000 procedures in the US. This was followed by hyaluronic acid treatments, which grew 16 per cent.

Key opportunities
We believe there are opportunities for upscale and luxury hotels to convert a cost centre into a revenue centre by implementing some medical and aesthetic services, depending on the hotel’s location and its access to relevant supplies.

Aesthetic and longevity treatments will cater towards both male and female consumers; however, our research has shown that aesthetic treatments are more popular with women and the longevity services are more popular with men – especially high-net-worth individuals. The longevity treatment service is a low-cost, high-margin opportunity – with margins above 2,200 per cent. Offering this type of specialised facility within a spa environment creates a niche for hotels to capitalise on this high-margin industry.

Detoxification treatments, such as chelation therapy, liver detox and lymphatic drainage, are intravenous therapies that are in high demand with consumers over the age of 36. The demand for energy boosters, such as Myers cocktails, megadose vitamins (MPV) and ozone IV therapy, as well as immune boosters like QRS treatment or mesenchymal stem cell, is booming for consumers aged over 65. Both treatment segmentations represent an attractive – and relatively straightforward – additional revenue centre for spa facilities.

There are still unexplored opportunities to implement a number of high-yielding cosmetic treatments within the hotel spa environment, incurring a reasonable investment volume and utilising less than 150sq m (1,615sq ft) of space.

Partnering with a third-party provider with a positive track record in aesthetic treatments is another path to introducing these services, and will guarantee expertise, trained specialists and long-standing supplier and industry relations. This can also help as many specialised treatments require associated licenses.

Most luxury hotel spas are not capitalising sufficiently on this ever-growing industry. An efficient implementation with a specifically tailored selection of services will not only elevate the spa facility’s reputation, but it will also open doors to a new customer segment with high disposable income.

Graph 1:

Non-surgical - guest preferences

*Source: American Society for Aesthetic Plastic Surgery & Statista, 2016
 



About the authors:

 

Fabian Modena and Matthew Brennan
 

Fabian Modena is a consultant with Horwath HTL Health & Wellness, and Matthew Brennan is the director. Based in Thailand, Horwath HTL offers a range of consulting and management services for hotels and spas.



Originally published in Spa Business Handbook 2017 issue 1

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