GLOBAL REPORT—Guido Kerpel grew up a careful observer of the spa business. As a young child in the Netherlands, he watched as holidaymakers from near and far would visit the local Kurhaus Hotel in Den Haag for luxurious retreats spent idling the days away on a massage bed or in a sauna.
However, today’s post-recessionary environment could not be any more different, he said. At a time when every cost and corporate retreat falls under microscopic scrutiny, hoteliers are shifting the focus from self indulgence to the more palatable notions of health and wellness.
Kerpel has witnessed the transition firsthand as regional VP, Canada, for New Castle Hotels & Resorts. While the independent owner and operator still features many of the same offerings it had before the Great Recession, the group’s resort properties now include various treatments approved and covered by health-insurance providers.
“In our Canadian spas, we make sure that some of the insurance companies have licensed us so that if you have medical issues and you need a massage done because you put your back out or whatever, we’re able to provide those services. And then the cost isn’t actually borne by the guest but by the insurance companies,” he said.
Jack Miller has employed a similar approach as GM of the Fairmont Scottsdale Princess in Arizona, which recently revamped its spa under the Well & Being brand from spa developer Trilogy Wellness. The program takes a more holistic view of health, incorporating onsite nutritionists and medical professionals to address every aspect of a guest’s well-being as opposed to skin treatments and muscle massages.
“When the downturn hit in ’08, clearly spa was looked at as an extravagance by virtually all meeting planners and even leisure travelers. It was not going to be looked at the same probably ever again,” he said.
Faced with that reality, the Fairmont Scottsdale and its owner Strategic Hotels & Resorts began investigating alternatives, conducting interviews with numerous meeting planners and digging into market research.
The result became the new Well & Being at Willow Stream spa, which opened approximately two months ago.
“The reactions right now are overwhelmingly accepting, especially from meetings planners and group planners who see a great opportunity and different opportunities for their groups to take advantage of not only the spa but fitness and wellness side of Well & Being,” Miller said. “The focus of most Americans is not just a massage but how do you take care of your body from a holistic perspective. So it’s been extremely positive.”
“The big piece of this is the wellness piece,” said Tom Healy, senior VP of asset management for Strategic. “… It’s just a common sense thought. Many companies are focusing on wellness. How do we become a preferred employer? How do we become a top ranked company to work for?”
“You always want to deliver a product that delivers on a basic consumer need,” Miller added. “We are going to and have begun to meet a basic need of corporations today.”
Demand and development
While many hoteliers are making their spa offerings more palatable, doing so does not guarantee they will become significant revenue drivers. Hotel spas are not the most profitable business units, although they can drive value to a hotel overall, source said.
“It’s not the most profitable type of business out there, but if you look at what type of group rooms or transient rooms it brings to the hotel, it’s significant. It sure is an amenity that you need to develop and you need to focus on,” Kerpel said.
A 4- or 5-star hotel or resort without a spa would be conspicuous in that absence, said Todd Hewitt, senior spa director for the Four Seasons Hotel Toronto.
“It’s now an expectation that any 4- or 5-star hotel will have a spa. It’s something people will look at when they book a room,” he said.
The same is true for developers or would-be acquirers, Kerpel said. “It is crucial. If it doesn’t have one, it needs to have one,” he said.
But attributing value—either a certain percentage of demand or even revenue—to spas is difficult, sources said. While Miller said the Fairmont Scottsdale has seen a 35% increase in group participation since the Willow Stream launched, others said the correlation was harder to pin down.
“I’m not sure it will drive an increase in room rate because they charge separately … But it certainly ads to the bottom line of the hotel by having a spa,” Healy added.
Spas also can bolster the aura or appeal of an existing hotel. That was the case at the Radisson Blu Plaza Delhi in India, which added a new, accredited spa during a property-wide renovation.
“R the Spa was always intended to add value to the guest experience, not really be a new revenue stream,” said GM Javed Ali. “It has helped reposition the hotel quite strongly in the upper-upscale segment.”
The spa was not only recognized by parent company Carlson Rezidor Hotel Group, which granted the hotel the “Plaza” tier as a result of the significant renovations, but also by the Indian Tourism Ministry for quality and in the form of accreditation from the National Accreditation Board for Hospitals & Healthcare, Ali said.
Every accolade helps in an increasingly competitive market, he added.
“The hotel retains competitive relevance in the face of a huge influx of new and emerging competition.”
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