Spas, a business with a life of its own

Reality indicates,  however, that it is not so easy to take on the spa business as an independent unit and everything has its origin in the bases. When hotels decide to open a spa, they are often motivated by the market trend rather than by their own need or strategy. "There has been in general in Europe and even in the U.S. a kind of quick race to have spas," says Miguel Trapé, general manager of Fornavon, a hotel consulting company with extensive experience in the area of spas in Europe and South America. "Everyone wants to reinvent themselves as a hotel with spas or spa centers but it takes a lot to have a spa itself," he adds.

Demographic factors, the basis

In the midst of that crazy race not to fall behind the competition, many mistakes have been made. Because for a hotelier to make the right decision as to the relevance of their project there is a long process to follow, many questions to answer and many factors to decipher. This is explained by Brett Blumenthal, senior hospitality strategist at the Gensler company, a leading architecture and design studio with a worldwide presence. "The first thing is to understand the demographic factors and what customers are looking for and within this you have to take into account the sensitivity to price, the level of the spa experience and knowledge." And he adds "you also have to take into account if these people are from the vacation, business or both segments and how long the stay is normally."

With Blumenthal agrees Cary Coller, president of Blu Spas Inc and Collier & Collier Spas Inc.: "You have to understand the guest market and whether the location justifies targeting either the local day spa market (for example locals and non-locals who visit the spa for a day or part of a day) and / or a local membership." At this time you enter to consider the type of spa that the hotel should have. A decision that determines much of the success.

These factors, added to the purchasing power of the target audience, are the clear signs that a market is mature enough or not to have spas. "Most of the time in big cities they know they need a spa because they get a lot of international clientele," explains Philipe Therene, spa account director at SpaEquip. But there are other factors that determine this maturity such as: when there are inhabitants of the destination who go to spas or tourists who visit other spas. "Additionally when the economy and the local area can successfully support the requirements of a spa for operational success," explains Brett Blumenthal.
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Expert advice

Among the different options available to hoteliers to choose the type of spa they want, confusion can reign. And this is where knowledge about the hotel business is not enough to make a good choice. "The concept is a key factor on which all spa development will be based," says Sharon L. Sedgwick, director of operations and advisory of SpaPro, a spa design and endowment company with offices in Cancun. Mexico. "The concept must be calculated in the architectural plans, the layout of the design and the ergonomic factors for the flow of the operation," he adds. To correctly define the concept of the spa, experts agree on the need to hire a specialized consultancy that will guide the hotelier on the way to make the right decision.

Here the question is why not choose the same planning or investment company that has advised you in the other areas of the hotel? Because it is the spa, another world within the hotel sector. "There are several reasons that explain this phenomenon. One of them is the high cost of implementation in teams," says Carlos Alonso, director of Carlos Alonso & Associates, a hotel consulting company in investment and operation with offices in Bogotá, Buenos Aires and Sao Pablo. "The spa industry is an industry in itself, beyond the hotel industry," he adds.

Because of this particularity of the spa industry, "it is important to have the help of an in-house consultant or contractor who is present throughout the process, from concept development to implementation," agrees Sharon Sedgwick, SpaPro's director of operations and advisory. "This is the relationship that will define the systems for the efficient operation of the spa, also ensuring cohesion with the concept, the spa environment and the spa service menu," he explains.

Do without imitating

Probably those who are considering building a spa inside their hotel have been boosted in part because their competition already has it. Not wanting to be left behind in the business is a good motivation but it can't be the only one. "Many build a spa because they want to have a competitive advantage and not as a way to make money," says Phillipe Therene, director of spa accounts at Spaequip, a North American company that provides different spa project management services, from planning  to design and equipment.

And something is true. To be competitive in today's hotel market you have to have a spa. "But be careful and don't get carried away by the urge to just fill one requirement," says Ellen L. McGinnins, a partner at Spa Development International, a spa development, design and equipment company. Ellen suggests asking yourself as a hotelier, "What makes us different? What is our story? Why would someone choose my spa instead of choosing the resort beyond?" By solving these questions, the  hotelier will be able to define the all-important concept of the spa. Of course, hand in hand with good advice.

"Those who want to develop a spa should first of all see what they like but not imitate, rather investigate who developed that spa they like and then talk to that person and see what the possibilities are," explains Carlos Alonso, of Carlos Alonso & Associates. The possibilities will largely depend on the space allocated for this purpose.

To correctly define all these aspects, the hotelier must be willing to invest from the beginning. "Investment in the form of feasibility study, competitive analysis, business projection for the total costs of construction as well as for furniture, appliances and equipment," says Ellen McGinnis, of Spa Development.  And here again it will be a consulting company of the spa business who can help you in this initial phase. "A good consultant will even warn you if it's a viable investment; one of the biggest mistakes I've seen comes at this stage of the project," Ellen adds.
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The time for profitability

A definitive element to determine the profitability of the spa has to do with the so-called mixture of services. There the treatments to be offered, beauty services, wet area and others will be determined. The result of the RevPAT (Revenue per available treatment room per day) will depend on the number of therapies and treatments. "Consistent with the trend of spas being independent profit centers, it's helpful to look at RevPAT," Andrea Foster and Adam Wohlberg of PKF Consulting and PKF Hospitality Research respectively comment in their article "Hotel Spas as Independent Profit Centres."

"Hoteliers who are familiar with RevPAR will find this new performance measure very intuitive. RevPAT is calculated simply by dividing the total spa revenue by the number of spa treatment rooms," the authors of the paper comment. In this sense, the more treatment rooms the spa has, the greater profitability it can achieve. We must not lose sight, however, that there must be enough demand to justify the addition of treatment rooms.

With a business plan consistent with everything that has been said above, the hotelier will be ready to present the project, as a viable business, to its potential investors.  "At that time the professionals of the development area (architects, engineers) are hired to make their due request and make recommendations," comments Brett Blumenthal of Gensler.

This is the time for the hotelier to keep in mind that the professional and very detailed work that was done from the beginning must continue. "Be careful when choosing architects and decorators," warns Carlos Alonso, of Carlos Alonso & Associates. "Look for someone who knows about the business," he explains. Technical aspects such as water and steam management, among others, have their electrical and plumbing specifications very specific. That is why we must warn of care when starting the construction stage. "This is a business of perceptions and as such it lends itself to everyone believing that they can do it," says Carlos Alonso.

In this sense, the operation and administration of the spa is an aspect in which perhaps the hotelier should reconsider a company specialized in spa management. A topic that can be controversial but that experts recommend in unison. "The hotelier tends to believe that the spa will have the same profitability as the rooms," says Miguel Trapé. "With the significant investment required by the inbound spa, it has a much slower start and a much flatter performance," explains Mr. Trapé. Hotelier to your hotels, the spa is for other professionals, it seems to be the final recommendation.