BW Confidential - Issue #1 - April 2010 - (Page 30)

Wellness report credit: stock.xchng/TouTouke Overview Wake-up call What the spa industry has to gain from the recession by Alissa Demorest he recession has been a rude awakening for the spa business. After years of double-digit growth, industry sources estimate global spa revenue was down by more than 10% in 2009. However spa-goers didn’t necessarily give up going to the spa, but they purchased lower-ticket services instead. According to research from US-based STR Global’s Spa STAR report the average treatment in 2009 came to $135, a decrease of 4.5% over the previous year, while treatment room use was up by 3.5%—perhaps a sign that spa managers are becoming more savvy about attracting clients. The crisis has resulted in a string of spa closures, mainly independent day spas, while hotel spas have been less vulnerable due to their financial link to hotels. “This correction in the marketplace is good for remaining operators as it reduces competition and addresses over-supply pressures,” comments Singapore-based benchmarking company Intelligent Spas managing director Julie Garrow. T in a hotel or not, must be an individual profit center. “The economic crisis has been good for our industry as it has caused a clean-up of sorts. In addition, all major hotel chains “ When the economy picks up again consumers will still be looking for deals. Just because spa-goers will have more spending money doesn’t mean they won’t be savvy about spending it ISPA president Lynne McNees Spa for profit Falling sales have made spa operators face up to the fact that a spa, whether it operates today have a spa division, so the business is becoming more professional,” notes French company Clarins spa activities development director Ghislain Waeyaert. Operators have had to come up with more creative ways ” of generating revenue—gone are the days when a spa’s ‘wow factor’ was enough to attract a steady stream of guests. In reaction to dwindling occupancy, hotel spas have launched marketing initiatives targeting local guests, implemented membership programs and offered package deals. In Paris, The Four Seasons Georges V hotel spa saw its sales increase in 2009 over 2008, which was already a record year for the spa, in part due to its efforts to increase visibility. This was a joint effort between spa and hotel management. It boosted its PR initiatives, rather than opting for advertising, and held spa events for its best clients, which attracted more local customers. The Georges V spa claims a 92% return rate for spa guests. Day spas have also stepped up their efforts to forge local ties. “We’ve seen several spas partnering with established franchises, hotels and local businesses in order to become more accessible,” International SPA Association (ISPA) president Lynne McNees tells BW Confidential. She adds that 46% of ISPA day spa members work with local businesses to incorporate spas into their workplace. Some spas have opted to discount their 30 April 2010 - N°1 - BW Confidential

Table of Contents for the Digital Edition of BW Confidential - Issue #1 - April 2010

Update - Brand and retail recap
Take note - Market facts, figures and trends
Launches - The latest fragrance, skincare and make-up launches
Best of BW - Market highlights
Interview - Sephora international & development md Olivier Schaeffer
Insight: make-up - Category overview
 - Industry viewpoint
 - Trends
Wellness report - Overview
 - Industry roundtable
 - Spa case studies
Travel retail - Europe: little chance of a rebound
Market watch: Western Europe - Regional analysis
 - Germany
 - France
 - UK
 - Spain
 - Italy
Radar - Six up-and-coming beauty brands
Packaging special -  Industry analysis
 - Innovation
Last word - UBS analyst Nik Modi's outlook for 2010

BW Confidential - Issue #1 - April 2010