RENEE-MARIE STEPHANO, President of the West Palm Beach-based MEDICAL TOURISM ASSOCIATION, and DAN CORMANY, graduate student at the UNIVERSITY OF NEVADA-LAS VEGAS, offer hotels a detailed guide to innovative new revenue opportunities.
What’s the outlook for hotel spa development in 2010 ? MIA KYRICOS, Director of Global Spa Brands & Programming for STARWOOD HOTELS & RESORTS WORLDWIDE, Inc., gives us her take via that tried and true standby, a S.W.O.T. analysis.
Spa Benchmarking is one of the “hottest” topics in the spa and hospitality industries. It is a relatively new discipline; therefore, it is filled with challenges and opportunities. While spa benchmarking studies are very much needed, not all studies are useful... some can actually be quite damaging and harmful. There are too many studies that lack credibility, integrity, quality and reliability, yet they receive significant press coverage. Poor information, conclusions and recommendations can be very detrimental when a spa relies on this information to make operational, personnel, marketing and investment decisions.
Skyrocketing healthcare costs in the United States and other nations have spawned increasing interest in seeking medical procedures abroad. The phenomenon, known as medical tourism, is bringing increasing demand to select lodging markets in foreign countries. High demand for this synergy between global tourism, hospitality, and healthcare services has the potential to fuel mutual growth, putting international hotel and resort operations in a position to take advantage.
Many people have said that spas are recession-proof. People go to a spa in tough times to relieve stress, and they go in good times to celebrate. Spas are places for “me” time to relax and find some balance, but they are also places for “we” time to connect with others for personal and professional reasons. While spas can physically, psychologically, socially and emotionally meet the needs of many people, the challenge is to do so in a financially feasible way. Many spas have been their own worst enemy by getting caught up in the “greed” factor (very high treatment prices). This has caused consumers to re-evaluate the genuine “need” and ability for them to visit the spa. Spas are realizing that their “feel good” bubble may burst if they do not respond to the challenging economic realities.
The spa industry mixes time-honored practices and rituals with cutting-edge applications. Assessing their top five expectations for the spa industry in 2009 are Ingo Schweder, Managing Director, and Brad Fixler, Chief Marketing Officer of Bangkok-based Spatality International. Rooted in ancient traditions and long-established regional customs, the practice of spa is centuries old, yet the spa industry is relatively young. The industry’s noticeable growth of the past two decades finds it caught, not unpleasantly, in the inexorable yin-yang of the time-honored practices that have nothing to do with financial models and profit, and of, well, financial models and profit. It’s this juxtaposition that’s truly fascinating; it’s also what makes predicting trends in the spa business a worthy exercise. An exercise that beckons us to view the potential on the horizon while gently reminding us why Salus Per Aquam (“health through water”) exists in the first place. With this in mind, here are five trends we expect to see in 2009.
Spas continued to contribute to the top and bottom lines of U.S. hotels in 2007. Total spa department revenue increased 5.0 percent from 2006 to 2007, while spa department profits grew 5.8 percent. These are among the findings reported in PKF Consulting’s (PKF-C) recently released 2008 edition of Trends in the Hotel Spa Industry, a report that examines the revenue, expenses, and profits of hotel-operated spas in the United States.
A great way to help increase tourist attractions to luxury hotels is to include medical treatments and Aryuvedic medicine practices. During a stay in a foreign country, there are many chances that a tourist may feel uneasy or may witness muscle tensions and spasms due to hiking and long walks. To help ensure their stay is better, Aryuvedic medicine practices can help to relax guests and make their stay a lot better. The use of Aryuvedic medicine is originated from India and consists of massages, yoga and herbs. The practice has been around for thousands of years and has recently become popular in western countries such as the United States.
Ever since waterparks came indoors, under cover, and attached themselves to hotels, the hotel waterpark resort industry has continued to grow at an accelerating pace --- from 24% to 32% annually.
An affluent and ageing society allows consumers to refine their approach to health because they now have the choice of striving for perfect health, as opposed to merely living disease-free. The elderly are the most frequent users of health-related goods and services. Consumers have begun to realise their capacity for longevity and to demand a fit and active lifestyle in their golden years. This means that consumers are searching for ways through which to slow down the ageing process or even discover the fountain of youth. It is not surprising, therefore, to note the rise of medical tourism holidays in South Africa or the greater use of alternative approaches to health, such as yoga, Chinese herbal medicines and spas.
Have you spent much time lately considering ice cream parlors, specialty retail stores, waterslides, or aromatherapy treatments? If so, you could be among a growing number of timeshare resort owners and operators nationwide looking to increase top-line revenue in new and inventive ways. An added amenity such as an indoor waterpark, spa, retail store, or eatery can increase a resort’s overall perceived value to potential owners - resulting in sales at increased point values. Resorts can charge higher maintenance fees as attractions are added, thus passing the cost along to owners. Additionally, resorts with added features can achieve higher annual revenues, especially if those features are available year-round.
Spa … a magical marketing word and “tool” that has permeated the lifestyle industry. We are surrounded by “spa things.” With such a pervasive use of the word “spa,” we are not sure if we are diluting or strengthening, hurting or helping the “real spa” which for the purpose of this article is the multi-million dollar facility attached to a hotel or resort.
In recent months, it seems as if, wherever one turns, hotel owners and hotel .operators are adding spas to their package of products and services. From the most luxurious hotels such as Mandarin Oriental and Four Seasons all the way to Butlins and Centre Parks, everyone is getting in on the act.
It is commonly understood that spas were once an afterthought for operators of hotels and resorts. Yet as living a healthy and better lifestyle has become one of the population’s top priorities, spas have grown in popularity and are viewed as essential elements to a hotel or resort’s success rather than being just a luxury.
An appraisal of an indoor waterpark resort is similar to other appraisals in that it is a professional appraiser’s opinion of value. It is typically required by a lender before financing can be obtained for a new project. The scope of the project, including plans and development budgets, should be well defined prior to the start of the appraisal. When a project is ready for an appraisal, developers and lenders often seek out appraisers with industry-recognized qualifications which go beyond state minimum requirements. One such qualification, MAI membership, is offered by the Appraisal Institute. The MAI membership designation is awarded to appraisers who have met rigorous standards of education, experience and ethics. Members participate in continuing education to stay at the leading edge of their profession. For a project as complex as an indoor waterpark resort, it is beneficial to engage an appraiser who has extensive experience in the hospitality, resort, and waterpark industries.
You have your plans and reports in hand and are ready to start your indoor waterpark resort. Where does the money come from? In terms of occupancy levels and average daily rates, many indoor waterpark resorts are doing far better than hotels without indoor waterparks in equivalent markets. Despite this competitive advantage, financing your new indoor waterpark resort will be more difficult than financing a typical hotel or commercial building. Indoor waterpark resort projects are usually larger in scale and require larger development loans. Additionally, the risks involved in starting and operating an amusement-oriented resort property are higher than those involved in starting and running other types of properties. Also, if you are planning to start an independent property rather than a franchised property, you will have the additional challenge of overcoming the typical lender’s view that independent properties are less economically stable than franchised properties.
One of the most popular marketing terms in the hospitality industry is the 3 letter word called “spa.” Other industries have since adopted this term as a marketing tool, e.g., auto spa, spa tea, spa shoes, spa pillows, spa music, spa candles, spa cuisine, spa lifestyle, etc. Spas have become an adjective as well as a noun. They are a commodity as well as an experience. This is good because it broadens the awareness of the term, but there is a danger in the hospitality industry with people jumping on the spa bandwagon to develop or operate a spa without always understanding what the consumer expects, what it costs to build and operate, what are the economic realities and risks, etc.
If you have always wanted to try out a spa, but are confused with the myriad of centres calling themselves ‘spas’, fret not, for here’s a run-down on the Malaysian spa culture and scene.
Hotel owners are no longer content to have lodging demand generators nearby. Instead, they are designing and integrating demand generators—lodging, recreation, entertainment, retail, office and residential—into destination projects to act as a strong magnet for the region.
In the realm of mixed-use developments, spas can be magnets for attracting hotel guests, meeting and conference groups, residents, retail consumers and local day spa patrons. More than “just another amenity,” spas offer developers an opportunity to differentiate their mixed-use properties. In some cases, adding a spa is a necessary response to local or regional competition. Either way, a spa—if operated and promoted correctly—can add an extremely profitable revenue stream to a mixed-use project.