RESEARCH
Ninety-fi ve per cent of spas have their own website and say this had the greatest impact on sales over any other online service
T e spa activities – and the eco-
nomic factors – that have led to the current upturn in fortunes can be summed up as the ‘four ps’ – pick-up in demand, promotions and market-
ing, pricing and profi tability. ■ Demand on the up. Most oper- ators reported increased visits and revenue in the six-month period from September 2010 to March 2011, compared to the same period one year previously. Six in 10 spas reported an increase in spa visits by their clients. A similar propor- tion (61 per cent) said revenues had risen over the preceding six-month period. Spas were less likely to have noted increased client spending per visit (45 per cent), indicating that the rise in demand has been driven more by an increase in client visits. Across all spa types, trends in revenues
showed a distinct improvement on the 2009- 2010 period. In the earlier 2009-2010 period, 46 per cent of spas said revenues were climb- ing, compared to 61 per cent for the period of September 2010 to March 2011. Spas were also more likely to say they were increasing staffi ng levels, marking a sharp turnaround
in the employment trend. ■ Creative promotion and marketing. Spas have adopted imaginative and proac- tive approaches to sustain and grow business, seeking to attract new clients, build loyalty and increase revenue among their existing cli- entele. T eir strategies show a keen awareness that consumer disposable income remains tight – clients are increasingly conscious of value and sensible use of their money. A key aim of the current marketing approach
is to counter perceptions of spa treatments as indulgent pampering experiences. Many spas are now positioning their services as part of a healthy lifestyle, promoting wellbeing and marketing their treatments as benefi cial to people living busy, stressful lives. Almost all spas (97 per cent) use online
services to reach and motivate consumers, while 95 per cent have their own websites and 81 per cent use social media. Online reviews (used by 52 per cent of spas) and directories (used by 51 per cent) also play an important role. Deal of the day websites (28 per cent) and fl ash sale websites (8 per cent) are used to a much lesser extent.
To reach customers, spas use online reviews (52 per cent) and directories (51 per cent). Daily deal websites (28 per cent) and fl ash sale websites (8 per cent) aren’t so popular
Operators said their own website had the
greatest impact on sales over other online services. Almost three in four spas (73 per cent) reported a ‘major’ impact on revenues from their own website. Less than half of spas, however, saw a major impact on reve- nues from any other online service. Of those spas that use social media to generate sales, for example, most (72 per cent) were likely to describe the impact on revenue as ‘minor’. Rewards and promotions continue to fea-
ture in attracting spa-goers. In 2010, 72 per cent of spas said they off ered giſt card promo- tions, ranging from 58 per cent of resort/hotel spas to 73 per cent of day spas and 75 per cent of medical spas. While innovative promotion ideas were popular, many spas were reluctant to go down the deep discount route, believing it devalued the brand and made it diffi cult to maintain standards. T ey also felt this tactic did not generate customer loyalty. Discounting too, is likely to restrain growth in prices. Almost all spas (96 per cent) are also con-
necting more with their local communities in various ways: donating products and services (85 per cent), hosting events such as open house days (69 per cent) and charity benefi t evenings (62 per cent). Such activi- ties are likely to have an indirect eff ect on building business, by providing profi le-rais- ing opportunities and educating customers on the benefi ts of the spa experience. T e rise in spa visits would suggest this mix of marketing is paying dividends.
40 Read Spa Business online
spabusiness.com / digital
■ Pricing holds steady. Prices for primary services held steady or declined slightly in 2010. T is refl ects the moderate upliſt in consumer demand, and the use of rewards
and some discounting to encourage visits. ■ Profitability. Boosted by increasing demand due to economic recovery, many spas have reported an improvement in profi ts (49 per cent). However, a substan- tial proportion has yet to see profi ts recover. Nearly one in four spas said their profi tabil- ity decreased from September 2010 to March 2011, compared to the previous year. Improv- ing profi tability will remain a key challenge for many spas, against a backdrop of fl at trends in prices and average client spend.
LOOKING AHEAD
T e ISPA research reveals that the spa indus- try continues to face a number of important challenges as it moves towards recovery and beyond, not least because it’s dependent on the pace of growth in the wider economy. Further recovery will come down to fi nd-
ing the right balance between quality and pricing (including the use of discounting) to build demand. T ere’s also a need to edu- cate consumers to appreciate the health and wellbeing benefi ts from spa treatments and steer them away from the belief that they’re merely luxury indulgences. In addition, there’s the ongoing obstacle
of recruiting and retaining qualifi ed, com- mitted and professional staff . ●
SPA BUSINESS 4 2011 ©Cybertrek 2011
PHOTO:
SHUTTERSTOCK.COM/YURI ARCURS
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