Editor's Note: This article is excerpted from Patty Monteson's seminar, "So You Want to Have a Spa" presented May 20, 2002 at the Spa & Resort Expo in New York City, NY.


By Patty Monteson, ISHC
Spa & Resort Expo in New York City, NY
May 20, 2002

My name is Patty Monteson and I, along with my business partner, Judy Singer, am the owner of Health Fitness Dynamics, Inc. (www.hfdspa.com). HFD is a nineteen year old company specializing in planning, marketing and managing health spas for fine hotels, resorts, mixed-use developments and day spas. Since 1983 HFD has completed more than $600 million of spa development.

This session will provide a general overview for planning, budgeting and marketing your spa. I will share some of our firm's recommendations on how to have a profitable and marketable spa.

The format of my presentation will follow a step-by-step process that we've developed and refined over the years. Since this is a Spa and Resort Expo, my comments will primarily focus on resort-based spas.


Our firm classifies spas in 2 major categories: Lodging Spas and Day Spas

The first example of a Lodging Spa is the Destination Spa where everyone is there for the spa program; people usually have a goal they want to accomplish. The components are: exercise, nutrition, wellness and spa services. The accommodations range from spartan to luxury.

The second example is the Resort Spa where guests combine the spa with all the other offerings of the resort. In the 1990's, I believe spas re-defined the resort experience as people began asking for and were using them in record numbers.

As for Day Spas, these often are an extension of a salon, but they can be stand alone developments. Usually they are in an urban or suburban location. In the past few years some resort spas that are located near a dense local population have become day spas to this population.

Our firm has coined a new term, the Hybrid Spa. This is a resort spa that is a very important component of the resort - it makes a statement. This type of spa combines the best of resort and day spas.


Now, let's go over this eight step process which can become the foundation for your spa venture.

  • Define the Market
  • Identify the Objectives
  • Develop the Concept/Guest Experience
  • Plan the Facility
  • Determine the Start-Up Costs
  • Prepare the Pro forma
  • Develop the Marketing Plan
  • Begin Operations

Step 1 - Define the Market

  • Existing Market: You can increase your market share by targeting young, female baby boomers, women over 50 and men
  • You can deepen your market by going after business travelers and young, professional achievers. You should also look into the "feeder" program that Spa Finder has developed.

Step 2 - Identify the Objectives

The first step when we start a new project is to make a site visit and gather information on our HFD Site Visit Questionnaire. This helps us explore all the issues related to planning, marketing, financing and operating the spa. This enables us to determine the size of the spa, cost, projected revenues, etc.

As for objectives, most of our clients want to have a spa that will be a profit center, improve the marketability and profitability of their core business and, in some cases, to help sell real estate. Remember, if you have a mixed-use property and are selling homes; condominiums or even timeshare, you are selling a lifestyle. Often the spa is an important component of this lifestyle.

As for the benefits of a spa, it should be a tangible asset for you. The spa should be profitable. It should also be an intangible asset. Economic research of resort-based spas conducted by our company has shown that spas contribute to the marketing advantage; revenue / occupied room; occupancy and perceived value for the room rate. The spa should also help increase the asset value of your property.

Step 3 - Develop the Concept

Early on you need to determine the type of spa you want to have and what the guest experience will be. This program should drive the facility planning. Some spas will offer a sense of place and the spa reflects the geographical or historical aspects of the area. Others may take a theme, e.g., Asian, and then plan the spa services and facility around this.

A few resorts have chosen to franchise or license another spa's name. When this happens it may affect the concept of the spa. Almost all of our clients have chosen to create their own identity starting with concept, treatments, facility, products, service standards, etc.

When developing your concept, you need to create the experience, touch the senses, evoke the feelings, create the memories and establish "signature touch points." Some spas will create a signature theme such as age management, medical aesthetics, mindfulness, fitness, wellness, luxury, etc.

The key points to remember are to know your market and your competition and then to create something that your market wants, your competition is not offering and will help you increase and deepen your market.

Step 4 - Plan the Facility

When you develop the design theme you need to create the story, set the stage, touch the senses, create the memories. I believe you should provide a sense of place. It is critical that the spa is comfortable for your guests so it really can be an experience for them. Among some of the other things to remember are the spa should be easy to maintain, it should be operationally efficient for staff and must have the ability to be profitable for owner/operator.

As for location, it should not be left-over space that will inhibit the size and flow; there should be easy access for the community without infringing on security and privacy of hotel guests; you should, whenever possible, combine indoor and outdoor space.

The size is based on the market demographics, market mix, hours of operation, concept, objectives, budget, etc. Remember, bigger does not mean more profitable, however some spas may need the size to create the theme. It is imperative to have enough profit centers and comfort zones. If you think there is a chance for an expansion of the spa in the future, plan for it during this stage.

When planning your spa, you need to examine its impact on the resort's existing business. The spa should enhance and complement your core business. You also need to pay particular attention to its impact on existing departments such as reservations, sales & marketing, laundry, housekeeping and maintenance.

Step 5 - Determine the Start-up Costs

Next you need to put a price to all this planning by determining your costs for construction, general FF&E, spa-specific FF&E and pre-opening costs such as training, marketing, etc. It is not uncommon for a four-star quality spa, to cost in the range of $350 - $450. A five-star quality spa can cost $450 - $550 and, in some cases, higher. At some point, you need to evaluate the developmental cost and determine if you will be able to get the return on investment you are looking for.

Step 6 - Prepare the Proforma

Results from HFD's economic studies show that most revenues (55 percent) come from ala carte services. We believe retail is a missed opportunity for many spas - this should be your annuity. Most spas report about 10 percent of their gross revenues coming from retail. As for gift certificates, we believe spas should make sure the recipients use them. Hopefully, they will not only use the certificate, but will purchase retail items and even become regular users of the spa.

Since most of what happens in a spa is one-on-one, payroll is your highest expense. In a stabilized year, payroll can be 35 - 45 percent of gross revenues; with benefits, it can be 55 - 65 percent. Operating expenses can be 13 - 20 percent of gross revenues.

When the spa is being charged in full or on a pro-rated basis for most expenses, with the exception of rent which is typically waived, the profit, as a percentage of gross, is in the range of 15 - 25 percent. If the spa is just responsible for payroll and products, the range is usually 30 - 40 percent.

Step 7 - Develop the Marketing Plan

Your collateral Information should include not only your brochure, but also information for your newsletter, video and web site. Avoid complexity in your message - more is not better and can be over-whelming and stressful. Don't forget to communicate as much as possible via your web site and e-mail address.

As for advertising, most of our clients piggy back the spa with resort ads which have become more regional than national. You may want to have special ads in the local paper for your day spa business.

Editors are always looking for a unique spa story and this is what you should pitch in your PR messages. Focus on what makes you different.

Your hotel guests are a captive market and should be your primary source of spa business. Market the spa to them prior to their arrival, upon their arrival, perhaps with spa dollars to be used within 24 hours, and at their departure, maybe with something to use on their next visit. Educate key resort departments, e.g., reservations, sales and marketing, front desk, bellman, etc. to be ambassadors for the spa.

As for your local guests, gift certificates are a great marketing tool. Offer specials of the week to them, form strategic alliances with flower shops, candy stores, wedding planners, etc.

Step 8 - Begin Operations

The spa director is typically brought on about 6 - 18 months prior to opening, depending on the start-up team and consultants. Supervisors usually start 3 - 6 months out and the reception / reservation department will start about 2 - 3 months before opening. The line staff will probably need a minimum of 2 weeks for training which includes not only their technical training, but also retailing, hospitality training, and resort orientation. In addition to training the spa team, you will also have to orient and train the resort staff.

The soft opening is about 3 - 5 days, but really depends on the size of the spa. This is the time when the spa team practices on one-another; practice on resort staff and then to "outsiders" who have a link to the resort.

Once the spa is open, keep monitoring and training your team. Refine the guest experience when necessary. Make sure the seamless integration of the spa and hotel continues. Stay "on-trend." Make market-driven adjustments - speak with the guests, look at your comment cards, etc. Be aware of what your competition is doing. Don't copy them but, rather, stay true to your unique value proposition.


  • Spas have become and expected amenity at resorts...not just a luxury
  • Define a marketable concept
  • Properly plan a flexible, comfortable and efficient facility
  • Make realistic financial decisions
  • Make sure the spa director is an integral resort manager
  • Provide on-going training
  • Adjust to trends


Byline: Patty Monteson is the co-owner of Pompano Beach, Florida-based Health Fitness Dynamics, Inc. (www.hfdspa.com) an internationally recognized firm that specializes in the planning, marketing and management of spas for fine hotels & resorts, day spas and mixed-use properties. HFD has been the consulting firm to over $600 million of completed spa projects since 1983. A partial list of clients includes: The Homestead; Four Seasons Hualalai; The Salish Lodge; Miraval; Pinehurst; Delano; Bacara; The Greenbrier; Silverado Resort & Country Club; La Posada de Santa Fe; Hotel Crescent Court.

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Health Fitness Dynamics, Inc.
1305 N.E. 23rd Avenue, Suite 2, Pompano Beach, Florida, U.S.A. 33062
Phone: 954-942-0049 - Fax: 954-941-0854
E-MAIL: hfd@hfdspa.com