Spa stats hit the summit

Louise Oakley, August 22nd, 2010

An unprecedented and unparalleled amount of new wellness research was presented and discussed at the 2010 Global Spa Summit in Istanbul. Louise Oakley outlines the key findings

The fourth annual Global Spa Summit, held in Istanbul for the first time this year, provided spa professionals with a historic amount of new and important industry research. From vital statistics to consumer trends and benchmarking to delegate surveys, the information conveyed was invaluable to spa managers and hoteliers who are looking to develop their wellness offering.

And while challenges are still there — the industry voted for the second year running that definitions, standards and best practices remain the number one problem facing spas globally — the impact of economic downturn has started to positively affect spa operators.

As GSS board member and SpaFinder.com founder Susie Ellis commented: “The new research presented concurs that not only is the economic turnaround now re-energising the global spa economy, but that a more extraordinary, long-term opportunity is looming: to dramatically increase our industry’s stake in the massive health and wellness markets.

“I’ve attended each summit and I’ve never felt such a sense of momentousness, energy and optimism — such a creative focus on the future and the big picture — and a willingness to break our industry ‘out of its box’ and explore new models, new customers, new partnerships and new technologies.”

A round-up of the research that ignited Ellis’ positive conviction is presented below.

Spas and The Global Wellness Market by SRI International

Commissioned specifically for the GSS, Spas and The Global Wellness Market aims to, following investigation of market forces, highlight key areas of opportunity and intersection where the spa industry can take advantage of growth and partnership opportunities in a myriad of wellness related sectors and provide recommendations on how spa operators can capitalise on these. It included a survey completed by 1077 consumers and 319 spa professionals.

Key findings

‘The Wellness Cluster’ is a US $1.9trillion global industry comprising:

Spa — $60 billion
Complementary and alternative medicine — $113 billion
Healthy eating/Nutrition/Weight loss — $277 billion
Preventative/Personalised health —
$243 billion.
Wellness tourism — $106 billion
Medical tourism — $50 billion
Workplace wellness — $31 billion
Fitness and mind-body — $390 billion
Finally, beauty and anti-aging is responsible for $679 billion.

SRI estimates that there are 289 million wellness consumers in the world’s 30 most industrialised and wealthy countries.
83% of spa professionals use the term wellness in their business; almost all consumers are aware of the term.
81% of consumers are “extremely” or “very interested in improving their personal wellness and will seek to do this via 1) exercise, 2) eat better, and 3) visit a spa.
71% of consumer respondents said they would be “much more likely” or “somewhat more likely” to visit a spa if they learned that a series of research studies demonstrated spa treatments deliver measurable health benefits.
Nine out of 10 industry respondents plan to make wellness-related investments in the next five to 10 years. Almost all of them believe their business will see growth from these investments, and 70% expect their wellness-related investments to lead to more than 10% revenue growth.

The recommendations

Partner with conventional medical establishments to deliver complementary and integrated healing services to medical patients.
Partner with the medical industry to encourage and conduct evidence-based research.
Partner with the medical tourism industry to create complementary services for medical tourists.
Repackage existing offerings and develop new offerings to define and market spas as a wellness necessity.
Provide continuity of care to customers.
Deliver executive health services.

How to move the industry forward:

Develop a harmonised understanding of wellness terminology and concepts in relation to the spa industry, to reduce consumer confusion.
Build a body of evidence-based consumer research that links spa to wellness as per consumer demand.
Connect with wellness-related public sector tourism and public health organisations to leverage their resources and expertise.

New Priorities of Today’s Spa Consumers by Coyle Hospitality Research

The New Priorities of Today’s Spa Consumers survey, presented by Stephanie Perrone Goldstein, investigated what currently drives consumers to spas; consumer internet adoption and the impact of online information; and what “makes or breaks” the spa experience.

Key findings

The number one reason consumers visit spas (89%) is for relaxation/stress management, but a significant 34% report their spa-going has been driven by gifts.
The primary reasons spa consumers visit websites are to find spa deals (62%); view spa menus (57%); and read customer feedback (48%).
The top three online resources that are used by global spa consumers: SpaFinder.com (44%); Search Engines (43%); Facebook (25%).
There is a disconnect between consumer adoption of/openness to online spa booking and the number of spas providing that functionality. Among spa-goers, 47% have booked a massage online, and 89% “would,” but only 30% of spas offer an online booking solution.
Social media usage for sharing spa experiences is growing: 59% are likely to email friends; 48% to write an online review; 41% to become a fan on a social networking site; and 37% to post on a social networking site.
88% of consumers report that they would be comfortable receiving follow-up from a spa post-visit, with the number one preferred method being an email from a spa manager inquiring about their satisfaction with their visit (83%).

The Latest in Benchmarking — Hotels and Luxury Spas by STR Global

Presented by STR Global vice president Jan D. Freitag, this benchmarking update provided a global hotel overview, showing that in all five major regions, there was a positive occupancy increase in Q1 2010. ADR increased in all regions except for the US and Europe. However, while hotels in the US without spas reported increased occupancy averages, hotels with spas continue to have significant ADR advantage: a $55 average premium over hotels without spas. The report then drilled further into the US market.

Key findings

Luxury hotel spas proved less vulnerable than their “room” equivalents during the recession: spa treatment room utilsation actually grew 3.5% in 2009, while room occupancy dropped 8.7%.
Both spa treatment rates and treatment room utilisation trended up in Q1 2010 (over the last nine months of ’09), but discounting continues: the average luxury hotel spa treatment declined from $149 in ‘08 to $142 in ‘09 to $136 in 2010 (Q1 comparisons).
There are numerous bright signs that hotel salon services are trending towards a strong year. Revenue-per-service is up ($61 in 2010 vs. $58 in 2009). Salon services are up roughly 4% this year vs. a 6% decline in ’09. Salon utilisation has jumped from roughly 17% in Dec. 2009 to nearly 25% by Mar. 2010.