20 Oct 2018 Spa Business Handbook
 

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Spa Business Handbook - Finding Balance in Wellness

US Research

Finding Balance in Wellness


Increasing numbers of consumers are booking longer, more expensive spa treatments as they look to offset daily stress, according to CBRE’s latest ‘Trends in the Hotel Spa Industry’ research. Mark VanStekelenburg reports

An increase in revenues at urban hotel spas has helped drive RevPOR to US$19.17 Dragon Images/shutterstock
Wellness programmes for seniors can combine spa therapies with physical activity Pressmaster/shutterstock
Guests over 65 have the time and money to spend on travel and spa Ruslan Guzov/shutterstock
Practices aimed at stress-reduction are popular with consumers Kzenon/shutterstock

US hotel occupancies are at a record high, as more people are travelling than ever before. The national occupancy level has increased for eight consecutive years, from 2009 to 2017. And with more heads in beds, hotel spas are presented with a greater opportunity to capture more spa customers.

In November of 2017, CBRE Hotels released the 11th edition of its Trends in the Hotel Spa Industry® study, continuing its legacy of providing hotel spas with a valuable benchmarking resource. The data, compiled from 141 US hotels in 2016, shows that spa department revenues increased by 5.2 per cent, just below the growth of rooms department revenue at 5.3 per cent. Spa revenue is also slightly down from 2015 when, for the first time in the study, it grew at a faster pace than room’s revenue, at 5.5 per cent versus 3.3 per cent.

That said, further findings from the latest report show it’s clear that hotel spas represent a key opportunity for hoteliers. With record occupancy levels and the heightened desire for personal wellness, people are looking at spas to help them reduce stress, relax and maintain their wellness routines throughout their stay.

Urban versus resort hotel spas
For hotel spas, spa revenue per occupied hotel room (RevPOR) peaked in 2009 at US$21.82. As the financial crisis lingered, they decreased significantly, to a low of US$14.12 per occupied room in 2012. Since then, RevPOR increased to US$19.17 most recently in 2016. This growth is driven by the increase in spa department revenues at urban hotel spas. Their 2016 spa department revenue of US$17.71 per occupied room (see Graph 1) is the highest ever recorded for this property type and is US$6.76 above 2007 performance. On the other hand, resort hotels have seen a decrease in RevPOR during this same time period. (Survey size and sample vary each reporting year, and therefore do not reflect the same-store data.)

CBRE Hotels tracks customer mix for hotel spa samples, and in 2013, spa department revenue from hotel guests equaled 63 per cent (see Graph 2). Since then, this has decreased each year, and the latest report shows that in 2016, hotel guests represented only 51 per cent of revenues at hotel spas. During this same period, revenue from locals/others increased from 32 per cent in 2013 to 46 per cent in 2016. This segment is growing as an instrumental component of a spa’s business mix and can help explain resort spas’ decreasing revenue metrics.

Spa resurgence
Spas in US hotels are seeing a resurgence thanks to key national trends, like a swing towards older travellers. In 2011, Households 55 Years and Over overtook Households Between 35 Years and 54 Years as the highest share of lodging spending by age, at 45 per cent versus 41 per cent. Further, those Between 65 and 74 and Over 75 are spending 23 per cent and 24 per cent more, respectively, on lodging.

These groups largely represent retirees who have both the time and money to spend on travel. Key services for this demographic include anti-ageing skin treatments, therapies aimed at relieving pain and arthritis, and massages to reduce stiffness and joint/muscle pain. The healing attributes of spa are further enhanced when paired with a physical assessment. Cleveland Clinic’s Wellness Institute in Ohio is an example of how medical centres are using patient history knowledge to create customised wellness programmes, integrating acupuncture, massage, reiki and even Chinese herbal therapy to relieve symptoms. As the elder population is exposed to a myriad of age-related health issues, spas can serve as relief for common ailments.

Further, people are no longer viewing spas as an indulgence, but rather are realising the importance of self-care and how spas tie into everyday wellness. A growing self-care movement means practices aimed at stress reduction and wellness take a priority. At The Spa at Equinox Resort in Vermont, people are booking longer and more expensive treatments that incorporate wellness and complementary modalities, such as reiki, with a key intention of reducing stress. In addition, spas are implementing add-ons to standard treatments, including guided meditations at the end of the service and even a nap session. These additional services provide customers with a non-labour-intensive de-stressing experience. Wellness is key in reducing stress, and no matter one’s age, consumers are looking for various ways to relieve stress and maintain a balance in everyday life.

Market differentiators
Spas continue to differentiate from one another and in today’s social media-based world, it’s important now more than ever to provide one-of-a-kind experiences to not only attract new demand, but to maintain loyal customers. Entire brands have been created to embody a mantra of ‘Instagramable moments’ and hotel spas are now tasked with providing these authentic, local and unique experiences. At Mohonk Mountain House in New York, a Mindfulness in Motion walk guides guests around wooded trails, cliff edges and a crystal-clear lake, while its Signature Elements of Nature facial incorporates witch hazel grown on-site.

Another way to for hotel spas to stand out is via food and beverage. Cornelia Spa at The Surrey in New York has partnered with a vegan restaurant for its Botanical Bar, which provides guests with an additional sensory experience pre- and post-treatment. Further, each treatment starts off with honey to awaken the senses. It’s unique practices like these that help attract new customers and pique the interest of loyal visitors.

Staffing is key
Consumer expectations are increasing and, unsurprisingly, knowledgeable therapists and aestheticians are key to the successful implementation of unique and personalised services in spas.
As digital technologies become ever-more prevalent, human interaction becomes even more valuable in the spa industry. People come to the spa to unplug and feel a sense of calmness and respite from the outside world. New trends in the hotel industry, such as shorter lead times, can create difficulties in staffing and scheduling. Given this, it’s important that spas are able to keep up with consumer demand without sacrificing service standards and individual guest attention. So while in 2018, the hotel industry is expected to see its first occupancy decline in 10 years, hotel spas that continue to provide unique and personalised services, embrace the various needs of customers of all ages, and emphasise a true balanced wellness experience at their facility will continue to see success. l

Graph 1:

Revenue mix per available room and per occupied room

 



Source: CBRE Trends in the Hospitality Industry, 11th edition
Graph 2:

Revenue mix

 



Source: CBRE Trends in the Hospitality Industry, 11th edition

About the author:

 

Mark VanStekelenburg
 

Mark VanStekelenburg is managing director at CBRE Hotels’ Spa Consulting Practice.

Email: mark.vanstekelenburg@cbre.com



Originally published in Spa Business Handbook 2018 issue 1

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