Governments and Spas – A Regulatory Tango – Part I


In many countries, the relationship between governments and spas is a complex one.

Government regulations related the spa industry can, of course, vary dramatically from country to country. In fact, they can even vary considerably from state to state within each country. Just to get answers on what rules they are supposed to adhere too or what guidelines they should follow can often be difficult for a spa. Without clarity on the rules and regulations of the industry, much is ultimately left to self-regulation.

Self-regulation in a new industry is a normal thing. Governments tend to move slowly. New industries tend to move quickly. If innovative companies and industries wait until all the necessary rules and regulations are in place, they may never get off the ground. That can work in a nascent industry, for a while. However, eventually, more structure and regulation is required. As an industry grows and matures, it begins to impact many more aspects of the people and systems around it. This creates a need for rules. It’s kinda one of those fundamentals of a civilised society.

Let’s Dance!

The first step in this Regulatory Tango between governments and spas is to allocate the new industry to a specific government department or authority to oversee it. Sounds simple enough. But there’s an interesting dynamic I’ve observed over the years in the early stages of the development of the spa industry in some countries. No government departments want to take responsibility for Spas. I found this a fascinating phenomenon and so I spent a bit of time trying to understand why.

What I came to understand, from my completely outsider, non-expert, non-governmental, purely observational standpoint was this. Government departments really operate much as the same ways as any business. Or perhaps more accurately, much the same as any as any other business unit of a larger organisation. Sure, they are often much less efficient, but the key drivers and motivations of government departments are often fundamentally the same as businesses.

When in doubt, follow the money

Ask the head of any government department, just about anywhere in the world, what their biggest issue is and you will probably get the same answer. Money. And for them, that means getting funding. All governments have their budgets and each department must justify their needs to get their share of it. When a government lays out all the budget requests from all the departments, how do you think Spa would stack up compared with say public schools, roads, hospitals, water supply, etc.? Obviously not so high.

Now, an argument could be made that supporting the spa industry will help increase employment and eventually improve the health of the community. Both these would potentially result in less drain on government coffers. But in reality, any industry could make the employment claim. And when it comes to the health claim, there are two immediate issues that spring to mind. Firstly, hard evidence of the benefits of spas is still lacking. Secondly, spas have traditionally been seen as an indulgence for the wealthy. So, any savings on healthcare costs will be made by the private health insurance companies. Not really much help to the government.

So, without any serious levels of government funding, why would any department want to take the spa industry under their wing?

Seeking a new Home

Maybe the spa industry could be complementary to other industries? Hospitality might be an obvious one as the vast majority of 4 star and 5 star hotels have spas. In some countries, this is exactly what has happened. Spas have fallen under the auspices of the Ministry of Tourism, which also oversees the hotel industry. Such a structure can work, up to a point. However, for most hotels, spas, although a required feature, don’t represent such a big part of their overall revenues. As such, spas are often not a big focus area.

One scenario in which spas can jostle for some more attention is if the Tourism Ministry is trying to leverage spas as a key element of their overall tourism marketing strategy. Countries like Thailand, for example, are well known as destinations for great spa experiences. Being overseen by the Ministry of Tourism in Thailand may well be a great place for the spa industry to be. Conversely, a country like Australia usually likes to promote the great outdoors and abundance of unique flora and fauna. In this scenario, spas would not get much focus as part of the Tourism Ministry.

Health is an obvious complementary area to spas. A potential home for us in terms of regulations and oversight perhaps? In many ways, it’s probably a better fit than hospitality. Do not forget there are lots of day spas in major markets around the world. These would have no natural place under the Ministry of Tourism, unlike their hotel spa cousins. Health ministries are big departments with big budgets. But they also have lots of demands placed on them. If the Health Ministry gets the drug approval system wrong, people die. Same if they get the public hospital system wrong. Nobody dies if they get the licensing requirements for day spas wrong.

What about me?

In this context, even within the bigger department like the Ministry of Health, spas tend to face a constant battle for attention. As already mentioned, there are many other more urgent areas of health for governments to focus on. There are some countries where Spa is allocated to a sub-department like Alternative Therapies or Traditional Complementary Medicine (TCM). In theory, this is a great place to be. With like-minded industries. But in reality, these other smaller industries are also struggling for their own recognition. So rather than being welcomed into their little sub-department, Spa is often viewed as competition for already scarce funds and resources.

No matter how hard governments try to make the pieces fit, the spa industry overall simply isn’t big enough to take a seat at the big table. Until it gets bigger, spas will just have to be happy with standing at the back of the budget room.

Next week in Part II of Governments and Spas – A Regulatory Tango we’ll explore the role of Spa Associations in creating a regulatory framework for Spa. We’ll also consider what other options governments have in the absence of effective industry associations.