Success takes several forms for a spa or a wellness facility. Reaching the expected return on investment by generating strong revenue flows and a healthy profit is an enviable achievement. A spa may even beat the market in profitability, although that’s a difficult task. Sixty percent of spas in the U.S. hotel and resort sector recorded profit margins of at least 20% in 2018, according to the International Spa Association’s latest annual industry study.
Design contributes to profitability and is a key factor in planning a new spa. Essential questions investors should ask about design before launching a project include: Financial results depend on how well hotel and spa departments complement each other. Success is a mutual affair. Spas should stand on their own financially, but they rely on economies of scale from being within a hotel (including areas such as F&B, housekeeping, laundry and shipping and receiving). In return, wellness facilities can increase hotel occupancy during off-peak periods and generate additional F&B and retail revenues. According to commercial real estate firm Avison Young, a hotel can really bring about a 30% to 35% profit conversion for a spa (excluding unallocated costs like administration and utilities) provided that the offering and design are correct for its market.
- How much wellness is too much wellness? A spa that is too small could fail to capture interest, or it may prove to be interesting in a region dotted with mega spas. A large spa may cost too much to develop and carry too much labor burden to maintain. A new spa may attract markets not previously considered or dissuade an expected market from coming.
- Can the spa be designed around a central feature? A natural or cultural elements can be incorporated into the wellbeing experience even if it is outside the spa walls.
- What are the current industry trends? Some trends can be familiar or even over-discussed (sleep benefits, fitness technologies, CBD treatments, meditation and nutrition), while others require more research (holotropic breathing, painmoons or lagom lifestyle). Spa trends come and go, so it is critical to understand how they will appeal to prospective guests.
- What do customers seek and what makes them return? The right answers to these questions are the golden ticket. There is no one-size-fits-all solution in spa development, and each guest may desire a different experience depending on their wellbeing needs. But one thing is certain: the visit must be memorable, and for all the right reasons.
Good spa performance isn’t only outstanding ROI, revenue or profit. Wellness facilities ultimately need to provide excellent guest experiences to flourish. It is imperative they offer a robust spa menu delivered by an exceptionally caring staff, provide spotless facilities with lovely amenities and personalize services as much as possible, especially in the luxury sector where this is now a basic expectation.
Successful spa developers create facilities that, in addition to traditional relaxation, provide opportunities for fitness and exercise, social gathering, self-service opportunity, heat treatments, cooling services, relaxation areas and places of respite incorporating the great outdoors, depending on the location, the weather and the available budget.
However, specific treatments or services may not be what customers talk about as the ambassadors of the spa’s business. Spa guests tend to speak about their experiences as a whole, share their impressions from before and after treatments and give opinions about the environment or spaces where their spa experiences were delivered.
Intrigue and creativity win here. Customers seek unique spaces and adventures: what it is like to nap on a swinging bed or relax in a secret spa garden, how different temperate pools or a salt inhalation room feel, how they climbed a mountain or biked down a volcano or how they assisted the chef with dinner herbs in the restaurant. An exciting central feature creates a wow factor.
Design is even part of encouraging guests to share memorable moments on Facebook, Instagram or other social platforms. To encourage guests to post about their visit and interact with the spa on social media, spa designers can create special areas for selfies, use video storytelling to present the effects of treatments, add Instagram-able furniture or decorations and create Facebook events for spa programs.
The right design for a spa or a wellness facility incorporating appealing spaces and first-rate touchpoints helps investors, developers and operators reach their financial targets and is essential to customer satisfaction. While wellness and wellbeing be different for each guest, all guests respond to memorable special experiences. When a spa or wellness facility delivers that, it arrives at another level of success.