A few years ago, I wrote an article for Hotel Business Review about the rollercoaster ride that the spa industry has been on over the past twenty years or so. I think it could be timely to revisit some of the points raised back then.
Like all good rollercoaster rides, the most exciting bit is when you start rolling down from the peak. Zigging and zagging, twisting and turning, screaming with a mixture of delight, adrenalin and sheer terror. But that part of the ride is also what puts many people off. It’s not for everyone. In many ways, the hotel spa business today is on that same exciting part of the business cycle. And just like that crazy rollercoaster ride, this part maybe isn’t for everyone. Some may prefer to get off here. But for those who hang on and ride it through to the end, they’ll probably be glad they did.
The Great Hotel Spa Race
The hotel spa business as we know it today, really began in the early to mid 1990’s. Prior to this, if you wanted a massage in a hotel, it usually meant going down to the gym where they would have one or two small rooms off to the side with a massage table inside. The facilities were pretty basic, as were the treatments. No frills, no soft touches, no nice aromas. Instead, you got a hard table, with a thin sheet and the pervasive aroma of menthol sports oil in the air. Want some mood lighting? Sure. We have two settings – lights on or lights off. These were the days when hotel management knew little about spas and hotel guests knew even less. Yes, things were much simpler back then.
Then came the boom! Somewhere around the mid 1990’s hotel spas started springing up all over the place. The Great Hotel Spa Race had begun. In Asia, this coincided with the Asian Financial Crisis. This was a time when hotels all over Asia were being hit hard by unsustainably low occupancies and revenues. Hotels were desperate for any additional revenue they could get. Then someone realized that if they took the beds, desks and chairs out of a few guest rooms and replaced them with a massage table, then hire a couple of masseuses, they had a new service and facility that their guests would pay for. And we will call it – a spa.
A hotel that could create a spa now had a true USP. Something that helped it stand out from the crowd. A genuine marketing advantage – and of course an additional revenue stream too. However, as the idea took hold, more and more hotels started to do the same. This is where the boom really began. Hotels were soon locked in a battle of one-upmanship in an effort to win the hearts and wallets of the new spa tourist (be it for business or leisure). And this is where things started to go wrong for hotels. Many of them drank the Kool-Aid. They bought into the belief that, to paraphrase Kevin Costner, ‘if we build it, they will come.’
Unfortunately, as a result of this, hotels began overbuilding their spas. They wanted to have a better spa than their competitors. To help justify their extravagant new project, either in their own minds or to their owners, they almost always overestimated the demand. Ultimately, the end result of hotels getting caught up in the euphoria of this mystical new thing called spa was often an unprofitable business unit.
Before too long, these hotels got stuck in a bit of a downward spiral of trying to ‘fix’ their spa business. For city hotel spas, a simple answer seemed to be getting more spa guests from outside the hotel. Local memberships, guests from other nearby hotels with a lesser spa offering, office workers coming in for treatments on their lunch break or after work were all thrown up as possible solutions. Invariably, whilst these initiatives certainly helped, they didn’t provide a total cure for the hotel spa that had been overbuilt.
To be the Best – or not
So now that the spa has already been overbuilt, what can be done? In this situation, your typical city hotel has two options. Firstly, they could double-down on the spa and set about making it truly stand out as the best spa in the whole city. If they do this, then maybe there’s a chance they can attract the more spa savvy spa consumers in town. If they did it really well, it could maybe even become a destination spa in its own right. Alternatively, they could chose to downsize and minimize. Reduce the spa offering and just have enough to satisfy the basic spa requirements of your guests.
The risk with the double-down approach is that it now becomes a more complex marketing challenge, with two main tasks.
Firstly, they need to make sure they have the right offering to be considered the best spa in town. The risk here, with an industry that has historically been very fad and trend driven and is still a long way from maturity, is that to have the best often means having not just the greatest, but also the latest. So this will probably mean a big ongoing financial commitment to ensure the spa stays fresh and ahead of the curve in terms of facilities, treatments and products.
Secondly, they need to then spread the message that they do infact have the best spa in town. Advertising, Public Relations, Branding, Social Media, Traditional Media all play a part in this task. But whereas before the market was everyone in the hotel, the market is now everyone in town. Previously, the hotel just needed to convince its in-house guests that an hour or two in the spa is a better use of time than sitting in their room watching TV or pretending to catch up on work.
Now, the spa needs to compete for the attention of a city dweller who is probably so caught up in their day to day life that they don’t even see or hear the message the hotel is trying to deliver. The competition is now not only every other hotel spa and day spa and salon in town, but also just about any other thing that city dweller has to or wants to do during the day – not just the lure of slightly uncomfortable armchair and a flat screen TV. That is a big marketing challenge.
With the downsize approach, the risk is that the spa might be seen as so basic that it shouldn’t really be called a spa. In some countries there are active spa associations and bodies that set minimum requirements for a spa. If this is the case in your country, if you downsize too much, maybe you can’t say you have a spa anymore. The knock-on affect here is if your hotel ratings body requires you to have a spa to qualify for a certain star rating, you’ve just lost a star. Travel agents too might grade your hotel negatively if it lacks a full-blown spa with all the bells and whistles. We all know the wisdom of not trying to be everything to everyone. But knowing it and actually saying no to requests are two very different things.
Deja vu – The Great Hotel Gym Race
Interestingly, hotels have actually been through all this before – back in the days of the Great Hotel Gym Race. The evolution of the hotel gym was very similar to the evolution of the hotel spa. A few hotels added them, they provided big competitive advantage, then other hotels decided they had to keep up and before long every hotel had one. Now today, a gym is no longer a USP for a hotel. Some of the bigger hotel gyms have tried to compete with standalone fitness centres (and usually failed). Most, however, have given up on the dream. Now they just provide the bare minimum gym facility to meet the basic requirements of the few guests who actually use it.
to be continued…
Next week, in Part 2 of Riding the Hotel Spa Rollercoaster, we’ll consider some possible options for the hotel spa of tomorrow. We’ll also discuss some options for the hotel that wants to get off the rollercoaster and just provide the basics. You’ll also uncover an amazing market research technique. Stay tuned…