THE STATE OF THE SPA INDUSTRY

6.29.2011
Raoul Andrews
Senior Advisor
Aspen Spa Management, LLC

During the Global Spa Summit in Bali this past May, I was interviewed by several magazines from China, Europe and Australia. Their questions reflected the perception of the industry of their readership. However they all asked one similar question; “where is the spa industry going, and what is the current state of the industry today?” Indeed when one travels throughout the planet as I do and have done all my life, one cannot ignore the fact that the same word can mean totally different things from one culture to another. With globalization at the forefront of political and economic concerns it stands to reason to analyze any activity through an international filter and then try to identify the future trends.
In a nutshell here is my view: First and foremost the word spa by itself does not mean anything today unless it is used with an epithet qualifying it as per its mission statement, objective, style and location. Very much like the restaurant industry; the Tour d’Argent in Paris and the local McDonald’s both serve food however no one would consider them to be in the same category. The differentiation is easily made, first because most patrons of these eateries know enough about food and beverage to judge the difference and no one today will mistake a fast food restaurant from a Michelin guide rated gastronomical restaurant. The problem in the spa industry however is that the majority of spa-goers really cannot make the difference between the qualities of a service from one compared to another. There are of course exceptions to this; those that travel internationally and have had a taste of what great spa service can be. However in general the consumer market still bases their judgment on superficial elements such as decoration and the apparent luxury of the settings. Next, there is no objective competent evaluation of spa services available today as there are in the F&B industry. No Michelin guide, no Zagat, no Gault & Milau. Not only are there no objective evaluation companies but you can actually buy a rating which only adds more confusion and continues the mediocrity. And keep in mind that to have any value a rating agency needs to have inspectors who are experts in the field not just follow guidelines concerned with hygiene and decoration.
So what will the future hold? In time the consumer will learn to distinguish quality of performance and service, mostly by traveling and being exposed to better quality of services, different deliveries of treatments, better customer service, and then and only then will start requiring that same level of quality when they return home. This same process took place in the F&B industry some thirty years ago! I recall being taken out for a gourmet dinner then, and the menu was shrimp cocktail, steak and potatoes, and for desert a cream de Mint Parfait! That was the ultimate gourmet dinner and it was served with Coffee, Tea, or Milk. We have certainly come a long way since then and hopefully that same thing will happen in the spa Industry.
At the present time the area of the world where across the board there is in general service quality in spas is in the Asia Pacific area and it is easy to see that this is recognized throughout the world as Asian type spas are opening everywhere. The U.S. is at the end of the queue overall (there are exceptions of course), Europe is having great difficulties breaking away from its past and continues to want spas to be exclusively medical where the rest of the world no longer mistake wellness for medicine? What is the bottom line of these considerations? Simply that as usual the cream will rise to the surface, the good will prevail the mediocre will fail, very much like in the restaurant industry where 8 out of 10 restaurants that open each year go under within the first year of operation. This is already a reality in the U.S. spa market. What do you think is the reason for the explosion of Wellness Tourism? What is the explanation of the fact that 2.4 million Germans went on vacation in Asia last year and most identified spa services as one of their primary reasons for choosing that destination? (Incidentally for those who would suggest that the reason for the choice is sex tourism; that only accounted for half of one percent.) To come back to the state of the industry and to use the F&B analogy, it can be summarized that the spa industry is still in its infancy and can only go one way: UP!
In essence for the most part the level of services offered, Asia being an exception, is at the level of McDonald’s or similar fast food outlets. And this is particularly true for spas in hotels including the large luxury brands. One recent example is of the Sofitel in Marrakech; where a colleague of mine went to the spa for a massage and the therapist was not only sitting down during the entire massage but also on a personal call on her cell phone for almost the duration! Most of the large hotel companies still do not get spa and concentrate their efforts on branding, focus on treatment room RevPar (which unlike the hotel industry, spa revenue does not and should not only come from treatment rooms but rather work stations), marketing, benchmarking, and other commonly used management techniques in the hospitality industry but have totally ignored what is the most important element of the service, the quality of the product (and I don’t mean a cream). It is as if in the F&B domain we considered that the quality of food was secondary to everything else. The reason for this is simply that the industry leaders for the most part have no real knowledge of the services their spas offer. Many even consider it below their dignity, or pay scale to acquire the technical knowledge essential to the success of their profession. Can you imagine if a restaurateur thought that preparing food, serving food or cooking food was beneath them?
Overall there are a number of trends that are emerging globally, the most important to date is the emergence of what is referred to as, “Wellness Tourism”. People choosing their vacation destination primarily based on the availability of spas or wellness centers and in many cases based on the quality of these centers. This movement will favor third world countries who either have a history of ancestral healing techniques or simply those who uninhibited by rules and regulations have determined their intent in being players in this arena and have made it easy for those interested in developing skills and knowhow. This is already visible in the flux of Europeans going to Asia or to countries like Morocco to find what they do not have at home: service with a smile, wonderful exotic environment at an affordable price. Europeans in the business are fully aware of this phenomenon but helpless to change their ways, laden down by protectionist and antiquated regulations and labor laws that are so rigid that they do not permit any modifications or adaptation to the new demands of the consumer base. In most of the western European countries the Wellness domain is jealously guarded by the medical profession and the corporatism mentality refuses to let anyone not in the medical traditional family enter the profession even when what is being seeked by the consumers is no longer within the realm of their expertise. Holistic approaches to wellness and treatments like massages that are based on energy flow and mostly an approach to customer care which is totally opposite to their understanding of it. In true European reaction to this type of problem they look to forbid, regulate and ask the justice department to rule against what is not in line with their perception of what the profession should be like. As a result those who can will go elsewhere.
In Asia the mistake that is being made is in thinking that what is done in the West is better and some have been tempted to emulate spas from America and sometimes from Europe as well. The same thing has happened in North Africa. Tunisia for instance, prompted by the French who desperately wanted to export Thalassotherapy have seen their spa clientele melt as butter in the sun to the delight of Morocco who understood quickly that tourists from Europe were looking for exotic cultural experiences and not what was the remains of what Europe has been selling for over a century: primarily water based therapies. As Asia became recognized as the leader of the new spa culture, many of the exceptional technicians have been exported throughout the world. As a result many spa operators, mostly in hotels have gone out of country to find trainers; many of which came from Australia and Great Britain. In the process losing their advantage as those trainers lack the intrinsic knowledge of Asian healing and have introduced western idiosyncrasies in the delivery of treatments, particularly massages. I experienced this recently at one of the most luxurious properties in Bangkok. I found that the traditional Thai massage that I received was not only bad but could hardly even be considered a traditional Thai massage. Half way through my treatment I asked the young Thai therapist who was working on me, “what she was doing” and she said, “Thai massage as you requested sir”. And I replied, “I signed up for a traditional Thai massage and this is nothing like it?” The therapist answered, “I am sorry sir but this is the way I have been trained to give the massage”. (Not in Thailand for sure) “So who taught you this? “I replied. And she went on to explain that the spa had hired a company from the UK and this was the way they insisted that the massage be performed.
The use of spas as a means to better health and wellbeing is very much at the forefront of interest in the Eastern European continent, and fortunately in most cases those former USSR countries have preserved their cultural interpretation of implementation: the Banya tradition in Russia, Ukraine and some of the Baltic states while Hungary continued to entrench itself in Thermalism and Romania, Bulgaria, Austria in Medical spas with an emphasis on water based treatments.
To complete this world review of what is happening I will finish with the Americas; divided by the US influence, found in Canada and Mexico and the rest of the Americas, Central and South. The US spas still are for the most part extensions of beauty salons catering mostly to women. American spas have ridden the fitness craze and many spas in the US belong to the health club variety. The holistic spas are becoming more and more in demand with a change in the perception of wellness and a new interest in what is still referred to as alternative medicines and disciplines. The big negative comes from a cultural hang-up over nudity and a permanent obsession with sex which explains why a full body massage in these spas treat only 2/3 of the body and the most important part of the massage is draping rather than actual proper execution of massage strokes. This will prevent spas in the US from competing with the rest of the world as the spa goers in the US become more savvy and educated in the international spa culture. Canada and Mexico for the most part have emulated US spas. In Central America the Yankee influence is still there but there is a beginning of wanting to be different as they turn to Asia and in some cases to Europe for role models to copy. Brazil on the other hand is favoring the medical spa approach and mostly rides the esthetic surgery reputation it has acquired through the world reputation of the likes of Dr. Pitanguy.
This brief overview of the Industry at large tells a simple story: just like in the food and beverage industry there are and will continue to be opportunities for those interested in the spa industry, and there will be multiple ways to get involved, not just one way decided by a government or a culture. The tastes and perception of quality of the clientele will drive the future of the industry and as the world gets smaller the competition will increase and hopefully only elevate the spa industry on a global scale.