IHRSA - April09CBI-Spa

‘In Tough Times, Spas Stress Stress’
Responding to members’ greater needs ensures spas’ future success

By Craig R. Waters

As the economy worsens, so, too, does the stress level of most Americans. We’re in the midst of the worst economic crisis this country has experienced since the Great Depression, and with it has come failed banks, bankrupt businesses, home foreclosures, retirement savings lost to Ponzi schemes, and exceptionally high unemployment.

Is it any wonder that, today, nearly everyone seems stressed out?

And is there any question that health clubs can help? Their ambience, caring atmosphere, and many, in fact most, of the services that they offer—from straightforward exercise, to group classes, to yoga sessions—have a positive impact on both the physical and psychological aspects of stress. And nowhere is that effect more pronounced that in a club’s spa area.

Just spend a few minutes considering some of the services that many club spas offer. The list at Chicago’s Fitness Formula Clubs (FFC) includes, among its many options, no less than six types of massage (including Swedish/relaxation, deep tissue and sports, hot stone, maternity, and aroma therapy), a variety of facials for both women and men, waxing, nail care, and tanning. Prominent on the menu of Club One’s Nob Hill facility in San Francisco is a Stress Relief Toning Facial.

Simply reading the descriptions of the services begins to sooth one’s nerves.

The state of spas

The fact that the current environment is unsettling hasn’t escaped the notice of the proprietors of spa properties—whether club-based, as with FFC and Club One, or full-fledged spa resorts, such as those operated by Miraval, Canyon Ranch, and the Golden Door. Neither has the fact that, while a recession poses real challenges, it also clarifies and enhances opportunities—ones that spas are particularly well prepared to explore.

And they’re doing so:

“In Tough Times, Spas Stress Stress,” read the headline of an article that appeared recently in The New York Times. “In late November,” the article noted, “a couple of months after the global financial crisis leaped to the top of news reports, spa lovers at Spafinder.com were showing new interest in a concept fit for jittery times. Along with the usual search terms, like ‘day spas’ and ‘massage,’ a newly prominent word was typed into the site’s search engine three times more often that it had been in the summer. That word was ‘stress.’”

The Times’ research, CBI’s own reporting, and a survey conducted by IHRSA all arrive at pretty much the same conclusions. Spas are under more pressure; the sale of some services is up slightly, while the sale of others has slipped; and in terms of total revenues, spas are pretty much holding their own despite the economic headwinds. A pervasive, widespread trend is that, as consumers attempt to squeeze greater value from every dollar, overall club usage has increased, particularly for activities that are included in membership. Members, however, are tending to avoid fee-based amenities, and, when they do buy, are opting for less expensive ones. Massage is up; the $185 Abhyanga Scrub and Soak is down.

The difference between clubs that are doing well with spa services, and those that aren’t, seems to be largely a matter of focus, commitment, creativity, and, of course, sound business practices. The solid performers have made excellent use of such tools as stress-focused advertising; stress-specific programs; cross-selling by staff; member education; corporate outreach; special spa packages; a results-oriented emphasis; and discounts, though these are generally positioned to avoid the appearance of price cutting.

No spa is an island

The Westmoor Club, on Nantucket Island in Massachusetts, is an upscale, multidimensional facility with an 18,000-square-foot fitness center and a sophisticated spa operation. A seasonal business, as the island’s population fluctuates over the course of the year, Westmoor buzzes with outdoor activities—croquet, grass-court tennis, yachting—during the warm months, and busies itself with indoor ones when it gets cold.

“The only parts of the club that stay open during the winter are the fitness center and the spa,” explains Spa Director Andrea Smith. “The club has 436 regular members, and offers a winter membership for local residents; right now, we have 294 winter members.”

During its high season, the spa employs four massage therapists, two facialists, and, one each, a physical therapist and nail technician. It has eight treatment rooms, women’s and men’s locker rooms, and a relaxation area, and offers massage, body therapies (wet treatments), facials, and nail care. Massage and facials are the most popular services.

Thus far, Westmoor seems to be bucking the economic tide. “We haven’t seen a decrease in utilization yet, and, this year, our winter membership more than doubled,” reports Smith. The volume of facials sold in July and August of 2008 was down by $10,000 over the same period in ’07, but massage held steady at $76,000.

“We’re doing our best to come up with special promotions and very creative spa packages,” says Smith. “We’re offering bulk packages, combination treatments—that sort of thing. But providing packages,” she hastens to add, “doesn’t mean discounting. We don’t want to set a precedent that makes our prices rollercoaster with the economy.” The spa, she adds, is also planning to survey its clientele to pinpoint its preferences “as they start to prioritize.”

Smith’s key response to the current economic crisis: “Special packages for special times.”

Midwest merchandising

Halfway across the county, in Chicago, FFC offers extensive spa services at a number of its seven multipurpose facilities. Approximately 20%-25% of the clubs’ members purchase treatments, and, echoing the general trend, some areas are up, others a bit down. “We have a very strong massage business—it’s holding its own,” says Jan Ryan, the spa and retail director for the chain. “We do see a little change with respect to facials and waxing. If, in the past, people came in every three weeks, now, maybe, they’ll come in every four weeks.”

Part of the operation’s financial solidity is due to the intrinsic appeal and benefits of spa services, but most is the result of FFC’s hard and thorough work. From the moment a member joins a FFC club, they’re familiarized with the spa possibilities. “We present our services at the point of sale,” explains Ryan. “When someone joins, we use our salespeople to educate them about what we do. We might offer them deals—massage at a discounted rate, for instance, because we know that, if we can get them into the spa, we’re going to retain them as a client.

“Having salespeople help us introduce members to the spa has been very effective.”

But FFC’s support of its spa product doesn’t stop there. Eager to keep clients coming back, staff reconnects regularly with core groups of members and attempts to reignite their interest. “You have to keep promoting,” emphasizes Ryan. “For instance, one of our clubs has a large contingent of members from one particular company, so we’re doing a special week just for that firm—a week when all of its people will get a little bit bigger discount on services, will be offered wine and cheese, etc. Targeting specific groups seems to work well.”

So, too, does a new cause-oriented initiative that FFC has utilized to good effect on two occasions. Partnering with outside organizations, and leveraging the power of the Internet, FFC offers people a chance to purchase spa services and, at the same time, contribute to a charity. “So what happens,” says Ryan, “is that people want the services, but they also want an excuse to purchase them. This gives them a chance to do something for a worthy cause—which makes them feel good.

“We did this in October to promote breast-cancer awareness, and in February to promote women’s heart-health awareness,” she says. “It’s been a very successful program for us.”

But if there’s a single practice that serves as a foundation, of sorts, for FCC’s sales building efforts, it’s the spas’ focus on delivering real results. A strength in good times, it becomes a salvation in bad. “I think one of the reasons that our massage business is holding up so well,” reflects Ryan, “is because our therapists and clients work together as a team to produce a given outcome—relaxation, relieving knots, improved range of motion, etc. So clients wind up buying what’s essentially a series of sessions.

“What’s great about this,” she suggests, “is that, at the end of a session, the client feels as though they’re accomplished something—that they’ve gotten something for their money.

“People are still willing to spend money on spa offerings,” concludes Ryan, “but the service has to provide good value and exceed their expectations.”

Bay Area innovation

Meanwhile, on the West Coast, Club One, which has a number of sites and some 40,000 members in the Bay Area, is utilizing many of the approaches employed by Westmoor and FFC—e.g., the active involvement of club staff, cross-selling, member education, and regular needs surveys—but it’s also come up with some notions of its own to drive business.

“Every new member is offered a Getting Started Kit—three one-hour personal spa services for just $150—and about 15% purchase it,” notes Kari Bedgood, Club One’s public-relations and associate marketing manager. “And, periodically, we offer a complimentary 30-minute massage for all new joins or as a member-referral incentive.” Among the chain’s many other approaches, efforts, and tactics are preferred pricing and spa specials for members; customized spa programs; corporate spa parties for neighboring workforces; onsite chair massages in local office buildings; and promotions involving the clubs’ fitness and Pilates departments. “The high level of awareness that we’ve created about our spa offerings has led to steady sales,” attests Bedgood.

Club One’s newest program, now being tested at several of its San Francisco clubs, has been specifically designed to address the recession’s impact on stress levels and sleep deprivation. “We’ve created a Power Nap concept to offer members massage-treatment rooms where they’re able to recharge,” explains Bedgood. “The rooms come complete with a bed, pillow, blanket, and a CD with sounds to help them sleep. Members can book a 30-45-minute Power Nap, in a spa-like setting, and wake up ready to face their day.”

Understanding members’ needs, addressing them in creative ways, and responding to them with professional, precisely-tailored solutions is the best guarantee of continued prosperity. “You have to test the waters constantly, and adjust to members’ needs constantly,” concludes Bedgood. “That’s what it takes to remain successful.”

- Craig R. Waters, c.waters@fit-etc.com