At one time, hotel spas were typically a money-losing amenity offered only at luxury hotels and resorts. Today, they are becoming an essential component at an increasingly wide range of hotels.
From Embassy Suites to Marriott's Nickelodeon family resorts to Hilton and the revamped Sheraton brand, the number of hotel spas under development continues to grow, and hoteliers see no sign that the booming hotel spa trend will wane anytime soon.
"Growth in spas, particularly in hotels, continues to rise," said Susie Ellis, president of SpaFinder and a member of the Global Spa Summit board. "There has been a fundamental shift. In the earlier years, there was a lot of association with spas in terms of pampering and indulgence. That now has shifted more toward wellness. With that shift, people are putting more importance on spa activities and not looking at them as much as pampering or an extra."
A number of new reports and surveys suggest that spas are overtaking golf as the must-have amenity for resorts. In urban hotels they are becoming profitable businesses with strong local clientele. And hotel executives as well as new research reveal that when done right, spas not only attract guests but translate into higher daily rates.
Even in tough economic times, Ellis said, "We are seeing that the spa part of a hotel and resort has actually been helping the resort's bottom line as opposed to the first area being cut."
Globally, hotel and resort spas now number 11,489, which represent about 16% of spas worldwide, according to Global Spa Economy 2007, a report released at the Global Spa summit in New York in May.
That report, conducted by the Stanford Research Institute, also made the first attempt to measure the size of the global spa economy, which it pegged at $254.7 billion in 2007. That estimate included $60.3 billion in core business and another $194.4 billion in spa-enabled industries, including $106 billion in spa-related hospitality and tourism.
Because it is the first such report, there are no benchmarks by which to measure growth. But there are a variety of regional reports, including the 2007 Spa Industry Study from the International Spa Association, or ISPA, which show that the spa growth rate in the U.S. averaged 21% from 1999 to 2004. Growth slowed to 9% in 2005 and 13% in 2006. Still, the study found that the actual number of spas was continuing to grow at a robust rate, averaging 16,000 new spas a year.
Medical spas are the fastest-growing segment, reporting a 19% increase in locations, while hotel and resort spas were second, with a 6% growth rate, according to ISPA.
Indeed, hotel executives say spas are no longer optional at many properties.
"If you have a full-service hotel, the expectation is that a spa is somewhere going to be offered," said Mia Kyricos, director of spa development, operations and marketing for Starwood Hotels & Resorts. "In the '80s it was all about the swimming pool. In the '90s it was all about how the hotel has to have a fitness center. Now it is about the spa."
A growing priority
Recent research underscores why hotels are putting such an emphasis on spa development:
• The average daily rate for luxury hotels with spas has been consistently higher than that of luxury hotels without spas over the last 10 years. This rate differential was estimated at $76 in 2007 and is growing, according to Smith Travel Research.
• There are now twice as many adults interested in visiting a spa on vacation as there are adults interested in playing golf, according to the 2007 Leisure Travel Monitor from YPB&R (now the Y Partnership).
• 58% of affluent travelers say a "full-service spa" is their preferred hotel/resort amenity, according to the 2007 Leisure Travel Monitor.
• Travel agents named "spa facilities/access to a spa" as their clients' most important consideration when making their vacation plans in 2006, ahead of proximity to a beach, sightseeing, shopping, nature-based activities such as hiking, golf facilities and skiing, according to SpaFinder's "State of Spa Travel" travel agent survey in 2007.
• Approximately 40% of luxury and upper-upscale lodging projects under development in the U.S. have spa facilities and services, compared with 27% of existing hotels in that category, according to a 2006 report from PricewaterhouseCoopers.
What's more, the spa industry is increasingly adding spas to four-star and even three-star hotels.
"It used to be that a spa was an amenity that would usually be at luxury and resort locations, not something that was necessarily looked at strategically as a profit center," Kyricos said. "And many would lose money. What has happened over the past couple of years is spas have evolved from a luxury resort- or luxury hotel-only offering to be being more upscale and midmarket."
And the spas are making money, according to a recent survey by PKF Hospitality Research.
From 2005 to 2006, total hotel spa revenue grew 9.7%, from $2,886 per available room to $3,166. This compares with an 8.2% increase in total hotel revenue and a 5.9% gain in sales from all other operated departments, PKF said.
But successful hotel spas require a lot more than just adding a few treatment rooms. Most hotels are now focusing on creating or aligning with specific brands -- for example, W and its partnership with spa powerhouse brand Bliss -- and by tying the spa to broader wellness and fitness programs.
"We are tying to develop concepts for different hotel brands," said Alexander Mirza, senior vice president of corporate development for Hilton Hotels Corp. "I think that has been a big push for us. We have about 70 spas today, and we think that is going to be doubling in the next three years.
"If you have a really compelling product partner ... I think it can create a connection and an awareness, particularly for urban spas. In a market like that, you can attract outside guests, and they need that percentage to be profitable. It's kind of like having a celebrity chef."
Even at the high end of luxury, said Rosewood Hotels & Resorts COO Bob Boulogne, owners and developers are insisting on clearly defined spa concepts.
"We have been running spas for probably 20 years now," he said. "Recently, there has been more of a trend of getting around a spa concept. The prevalence of brand loyalty is key to that. We were getting challenged by owners and developers about what our concept was."
So, he said, Rosewood hired a consultant and developed the Sense spa. While each will be unique to the location of the resort and offer local variations, there are baseline standards for treatments and the spa's preferred product, Epicurean.
Likewise, Hilton has announced a partnership with L'Occitane products; Starwood is developing spa brands and different products for its different hotel brands; InterContinental has partnered with brands like LaPrairie and Elemis; and Wyndham is developing the Blue Harmony spa.
"The depth has expanded over the last several years," said Faith Taylor, vice president of innovation and product development for Wyndham Hotels and Resorts.
"For us, our spa program related to Blue Harmony is focused on wellness, and we developed it as a kit of programs" giving different resorts, ranging from five-star to three-star, flexibility in incorporating all or parts of the architectural component, treatment programs, services, products, fitness programs, even an aroma bar program.
Despite the phenomenal growth, industry experts say they are not concerned that spas will be a passing trend.
"Everything in our research shows that this is actually a lifestyle change," said Janis Cannon, vice president of brand management for InterContinental Hotels & Resorts in the Americas. "A lot of that is about time poverty. The pace of life is just as frantic and the expectations so very enormous about what we are able to deliver in terms of balance with family and career. And all that time for health and well-being is just as important, just as critical."
Nor is the trend emerging just among women. Increasingly, spa goers are men and teens.
"Men used to be 10% of spa goers," Taylor said. "Men are now at least 30%, and they are projecting that will grow to 40%."
Ellis said that SpaFinder recently analyzed Father's Day gift certificate sales to spas and found they had increased 80% over last year. "We were surprised," she said. "Men going to spas seems to be much more mainstream than many people think. Maybe all the stress people are having with economic times has made this an even more attractive gift."
As for the growing teens market, Marriott, for example, has begun incorporating separate teen and adult spas into its Nickelodeon resorts.
That creates "a whole generation of new people coming into the spa world," Ellis said. "The possibility of spa interest waning anytime soon is not something we see at all."
The biggest challenge, most agree, is not about creating demand for the growing number of spas, but about finding people to work in and run them.
"Because of the growth, it is hard to find good people," said Hilton's Mirza. "The talent pool has not caught up with the growth. Everyone is stealing everyone else's spa directors. There is not really the kind of training out there that you need for the level of service consistency.
"That's part of the thing that we are trying to figure out and sort out, is how to develop that culture and capability and really have good people, good career opportunities and train them properly."