We all know now that spas are part of just about every new four and five star resort, condo-hotel and lifestyle real estate development. They are also being added to existing properties so the property does not lose its market share or competitive positioning. When my business partner, Patty Monteson, and I started our spa consulting company, Health Fitness Dynamics, Inc. (HFD) in 1983, we believed that resort-based spas were going to be a necessary part of vacation and conference experiences. The growth in spas over the last 22 years has not really surprised us.

What has surprised me, however, are some of the decisions made by developers and operators that can potentially jeopardize the total project. I always tell our clients that they do not want to be in the spa business so make sure the spa enhances their core business. If the spa will not help them sell rooms or real estate, they should not add a spa to their venture. I think creating a successful spa is as much a science as an art. With the increase in competition among spas and resorts, I think competent advice comes from a multi-disciplinary team approach. What is happening, however, is that professionals in many fields are all of a sudden becoming "spa experts" and are going beyond their area of expertise. I think this may be happening because developers are expecting more from fewer people and because some people want to seize the opportunity to jump on the spa band-wagon.

It always amazes me that...

• A developer would think if an architect tours enough spas and takes enough treatments, he/she should be able to plan a spa. Being a guest and being a spa operator are very different. The design team can certainly make a place beautiful, but who is making sure it is market-driven, functional, able to be profitable, etc.|
  
• Equipment companies are being asked to provide design-related consulting services rather than selling equipment and procurement services. Isn’t there a potential conflict to expect objective advice when a company makes its money by selling equipment? Who determines what equipment is necessary and do the equipment companies even know about the guest experience and menu to spa treatments?
  
• There are so many investors, asset managers and hotel operators who say spas are very profitable while there are others who want nothing to do with them? There is a lack of economic reality and understanding from start-up costs to operating statements. The spa industry does not yet adhere to a Uniform System of Accounting so it can be challenging to get realistic benchmarks. Many spa start-up budgets and feasibility studies are based on erroneous assumptions.
  
• Lodging operators think the spa is something very different from the resort business. Why do so many want to out-source the spa? Spas are all about providing a service and not just performing a treatment. A successful spa has hospitality as its foundation. I think there is more to lose by giving up control to an outside spa management company than by integrating it as another hospitality experience.

Lodging developers and operators have full control of whether they create an asset or an albatross. Millions of dollars are spent to build and operate a spa. Don’t waste money and put your project at risk by building a spa that does not enhance your "core" business.

In my recent article "Spa Metrics & Benchmarks: Measuring and Monitoring Your Success" I outlined the importance to understand, compare, measure and monitor some of the key metrics related to your revenues, payroll, operating expenses and net profits. Once you create your metrics, you can establish some benchmarks. Metrics and benchmarks can help you identify potential problems or inefficiencies and monitor your business on a daily, weekly or monthly basis. When you see variances between your ratios and your benchmarks, you can analyze the situation then make the necessary adjustments.

I invite readers to respond to my column and to bring to light any concerns or queries they have regarding spas, and I’ll be happy to respond.

With healthy regards,

Judy Singer
Health Fitness Dynamics, Inc. (HFD)
judysinger@hfdspa.com

 

Judith L. Singer, Ed.D., ISHC, is the President & Co-Owner of Pompano Beach, Florida-based Health Fitness Dynamics, Inc. (HFD) (www.hfdspa.com) an internationally recognized spa consulting company that specializes in the planning, marketing and management support services of spas for fine hotels and resorts, day spas and mixed-use developments. HFD is also actively involved in conducting economic and consumer spa research. Since its inception in 1983, HFD has been the consulting firm to over $650 million of completed spa projects. A partial list of clients includes: Little Dix Bay, Four Seasons Hulalai, Miraval, Malliouhana, Cranwell, Pinehurst, The Homestead, The Greenbrier, Bacara, Silverado, Delano, La Posada de Santa Fe and Hotel Crescent Court. Dr. Singer is also the past chairperson of The International Society of Hospitality Consultants (ISHC). Ms. Singer can be contacted at 954-942-0049 or judysinger@hfdspa.com