At 42,000 square feet, the Eau Spa at the Ritz-Carlton Palm Beach in Florida in many ways exemplifies luxury and pampering at its finest.
The newly opened, $30 million facility features private suites with outdoor gardens and a huge outdoor relaxation area with a wading pool, hanging chairs and plants that were chosen to attract butterflies.
Among the largest hotel spas in the country, Eau Spa also offers a variety of indoor relaxation areas, a bar where customers can get custom-mixed body-scrubbing cocktails, public and private beauty salons, a fitness center, a huge hot-tub soaking area and steam and sauna facilities.
Planned and begun long before the current economic downturn, the massive spa is also an example of a host of facilities coming on line at precisely the time consumers have been pulling back from most things luxurious.
Like every aspect of the economy, particularly those associated with luxury, spas have been hurt by the recession. But some hoteliers and analysts say they haven't been hit as hard as one might expect.
"We were open just one hour and we had two guests that each spent $1,000 in retail," said Brad Cance, general manager of the Ritz-Carlton Palm Beach, where the Eau Spa completes the hotel's $120 million renovation.
Granted, Eau Spa is in the midst of one of the country's best-known playgrounds for the rich. But with aggressive marketing and the right packages, hotels around the globe say they have been able to use their spas to help lure locals who are opting for day trips and "staycations" over more expensive travel.
And now more than ever, hoteliers say, spas have become a must-have element for those luxury and upscale hotels trying to compensate for a sharp drop-off in customers in both the meetings and leisure categories.
"To compete in today's world, you have to have a spa," Cance said. "I do believe that a spa is the ticket, the price of entry to the meetings business."
Even in resort locations, where industry watchers say spas are faring the worst, managers say they are still a must-have for attracting customers in down times.
"We have found that spas are critical," said Francis Purvey, director of sales and marketing for Radisson resorts in Aruba and St. Martin. "More people go to spas than play golf. More people go to spas than play tennis. More people go to spas than do anything."
Even in the midst of the downturn, Purvey said, spa services are so crucial that the new resort in St. Martin has dedicated guestrooms to be used as spa suites so the resort can offer services until construction of the permanent spa is completed later this year.
"I think people are still using the spas, and I think because it is a luxury item, people with money will still go to the spa," said Gabby Lerner of PKF Consulting.
"But I think what is happening is that people are offering packages: 'Come stay at our hotel for $200 a night but get a $100 spa credit.' People are still traveling and using them, but they want to make sure they are getting a better value."
Buoyant, not invincible
It is hard to gauge accurately how the spa industry is faring, as none of the few entities that have begun trying to quantify the industry in recent years has base data from 2008, when the downturn hit hard.
Although spa revenue rose 5% from 2006 to 2007, according to PKF, hotel spas have been hit by the reduced occupancy and guest spending that is dragging on the rest of the travel industry.
Still, Lerner and a PKF associate, Robert Mandelbaum, wrote in a recent report that "the spa industry has the potential to be buoyant. However, it is not invincible."
Paradoxically, they observed that a recession itself can drive spa business.
"The dynamics of the spa industry enable it to persevere longer than other industries for several reasons," Mandelbaum and Lerner wrote. "A large portion of its consumers are affluent; an increase in stress can further emphasize the importance of staying healthy; and in difficult times, people tend to seek out experiences rather than material objects."
Yet, even given all that, they warn, "During such economic times, the spa industry inevitably suffers as consumers reprioritize and cut back on luxuries."
An informal survey by SpaFinder, a media company and Internet site that provides global spa listings, found that 54% of resort/hotel spas reported their revenue dropped in 2008 compared with 2007, while 46% reported it actually grew.
"The industry has been affected, like every other industry," said Susie Ellis, president of SpaFinder.
Still, Ellis said she has been surprised by the resiliency of spas during the global downturn. Although she expected to see a jump in spas closing this year, she hasn't seen much evidence of that yet.
"I have been watching that very carefully," she said. "On our website we have more than 5,000 spas listed. ... I was anticipating we would have more than the normal drop-off in January and February. But, surprisingly, I have not seen much acceleration." She added that because "January and February are usually good months" for spas, it might be "a little while longer" before the industry sees more closings.
"I'm sure that we will see some consolidation," she said. "However, I have not seen a huge closing of spas."
Hotel spas are least likely to close, she said, because they are usually owned by the hotel, though some are separate entities or run by third parties.
Because of that, hotels can tie room and spa specials together, which translates to good deals for customers.
Indeed, it seems that specials are what continue to drive traffic to all but the most elite of spas. A SpaFinder poll showed that when asked what was the best way to attract new customers, the top two responses by far were 1) discounts and special offers and 2) value-added promotions.
When asked what changes they most anticipated at their resort/hotel spa in 2009, 76% of spa respondents expected to increase special offers and deals in '09, with 20% expecting to maintain such offers at the same level.
Not surprisingly, no one is predicting that spa-related deals will decline this year.
At the Acqualina spa in Sunny Isles, Fla., spa director Kate Brown said she had been able to maintain revenue and visitor numbers in large part because of reduced prices for services, packages that include spa treatments as part of the room rate or both.
"We are not far behind where we were last year, to be quite honest," Brown said, noting that revenue in January was off 5% from the same month in 2008.
De-stress
And with the constant media blitz about the dismal state of the global economy, the emphasis has shifted from marketing luxury and pampering to marketing stress reduction. That's true even in such remote locales as Quy Nhon, Vietnam.
"Last week, I had a guest tell me she was checking in here so she could check out of the economic mess at home in Hong Kong," said Shane McKirdy, general manager of Life Wellness Resort Quy Nhon, which on May 1 will launch a new series of two-day Discover Life packages. "I'm finding more and more this is what guests want, an utter break from the worries of the day."
More than three times as many people typed the word "stress" into SpaFinder.com's search bar since the summer months than searched that term in January 2008. And weekly site traffic to the category "stress management programs" at resort/destination spas has roughly doubled between November and February.
And there are other clues in SpaFinder's searches to what travelers are seeking from spas. In January, the following search terms were significantly higher, year over year:
"Massage," up roughly 1,900%
"Getaways," up more than 400%
"Spa retreats," up 235%
"Local spa," up roughly 600%
"Tranquility," up 75%.
Just as significantly, searches for the term "luxury spa" were down 75%, while searches for "luxury spa resorts" were down 55%.
"I think that spa is becoming more and more synonymous with stress reductions than luxury," said Acqualina's Brown. "I think more and more studies are showing that [it's essential] to really take the time you need to escape and to have a treatment that really works and is good for your well-being."
In Avon, Colo., home to a new Westin resort and its Spa Anjali, no shift in marketing strategy was required.
The spa is a component of one of the first major green developments in the Vail-Beaver Creek ski region, and it was developed with a focus on wellness.
"It is more about relaxation today than it is about luxury," said the spa's general manager, Suzy Johlfs. "It's about stress reduction. Here we have the beauty element, the healing, mountain and the organic emphasis. We really go a little bit deeper."
Despite the wellness emphasis in its marketing, however, Johlfs admitted it has been a challenge opening during one of the toughest ski seasons the area has seen in years. She said she has focused on customer service and training, as well as on luring new guests with a variety of creative packages.
When the spa first opened last fall, she said, it offered traditional opening discounts. Throughout the ski season, one of the most popular attractions has been Spa Anjali's To Ski or Not to Ski special, which offered a massage during the hours that the ski lifts were running, for the same $98 price as a lift ticket.
"That has been a very good play for us," Johlfs said, noting that the standard price for the massage is about $140. "Our specials have boosted the occupancy in our spa by about 9%."
The discounting dilemma
While those specials can add up to great deals for customers, they raise the same question for hotels that room discounting raises: At what point do the specials devalue the brand and the long-term base rate?
"It is part of the conversation," Ellis acknowledged, noting that spas, like luxury hotels, "like to talk more about value-add than they do about discounting."
She emphasized that some of the top spas in the world are still refusing to cut rates or offer special packages.
"But clearly there are savings to be had," Ellis said. "And there are certainly a lot of creative ways spas are engaging people, like lengthening treatment times, so consumers are getting more value. But just coming out and slashing prices, you don't see that as much."
One reason for that, she said, is that the business models of many spas cannot sustain deep discounting.
"It's not like a hotel room, where half price is better than nothing at all," Ellis said. "With a spa treatment, there is quite a bit of expense involved with labor and such. So you can only cut the price so much."
Day spas seem to be faring the best in the downturn, Ellis said. Urban hotel spas are also doing OK, she noted, because they can attract locals, while resort spas, which typically have the smallest local markets to tap into, are having the hardest times.
Two of Dolce Hotels and Resorts' North American properties feature spas: the Lakeway Resort & Spa in Austin, Texas, and the Dolce Hayes Mansion in San Jose, Calif.
Michael Swyney, Dolce's regional director of sales and marketing, said those properties were doing three key things to keep their spa business stable during the recession: marketing to each property's core group of local spa customers with advance notice of specials and promotions; creating themed massage specials; and reducing prices during soft days and time slots while increasing prices in periods of high demand.
At the urban Sofitel Los Angeles, a new menu is being created with several mini or express treatments at a lower price point than other services.
Kory Keith, spa director of LeSpa at Sofitel Los Angeles, said, "My intention in creating these was, No. 1, to target people who still want a spa experience but cannot afford a $125 massage, and, No. 2, to have several smaller items that can be combined or added to pre-existing services for added value."
The hotel has also created a Neighborhood Card for distribution to Los Angeles markets that includes a 15% discount at LeSpa, in addition to other savings at the hotel.
Those local markets are not only crucial in keeping spa occupancies up but also in attracting locals for weekend staycations or even just visits to hotel restaurants and bars.
It's hard to quantify how much spa specials help in attracting guests, or how the costs are split between the hotel and the spa when the final accounting is all in.
"As important as a spa is, I don't think a spa is going to save a hotel," said PKF's Lerner. "But I think that a spa will always be important for selling a hotel and meetings and for giving you justification for your rate."