OPINION
The Future of Growth
Relevant statistics on performance and the power of branded solutions are crucial to the expansion of the worldwide spa industry, says Richard Dusseau
Richard Dusseau, president, Trilogy Spa Ventures E 110
very industry evolves. As each new industry enters an economy, the two key factors that infl uence its growth and scalability are consumer demand for the products or services provided, and the ability to attract capital
for growth. The spa industry has experienced rapid expansion over the past 10 years due to the growth of luxury resorts around the world. This expansion, fuelled by access to capital from the hospitality and real-estate industry, has allowed spas to extend geographically and compete for discretionary consumer spend- ing. Spas have experienced such rapid expansion that there has been little opportunity for differentiation through brand develop- ment. Typically, spas have offered whatever services would sell at their location, regardless of their brand positioning. Inconsistency within spa portfolios, a general lack of branding and disassociated service delivery have created a fragmented spa industry. Other key indicators of fragmentation include the metrics by
which spas measure their performance. There has been little agree- ment or progress between major spa operators as to which metrics or key performance indicators are essential to the business, and should be standardised. Spas are only beginning to gather and report key performance indicators based on metrics that the entire industry consider valuable and relevant to measuring a profi table operation. Should standardised reporting drive the fi nancial man- agement of the business, the spa industry would be able to deliver consistent information to the investment community regarding
spa business handbook 2012
the fi nancial potential for spas. Currently, a combination of factors including demographics that lean towards an ageing population in the US, much of western Europe and Japan, rising healthcare costs, and increased awareness of preventative health all speak for the potential of spas. These facilities are clearly positioned to deliver the products and services in demand. But what are the key consid- erations concerning the future growth of the spa industry?
More research required The spa industry will need to demonstrate and communicate its overall fi nancial potential to the investment community. Securing the funding necessary to scale the industry will require additional research and data on the size and depth of potential consumer mar- kets, relevant statistics on performance and the power of branded solutions to expand market share. The capital markets, both debt and equity, are actively exploring new growth sectors and which industries are positioned to take advantage of changing trends in consumer spending. Should the spa industry successfully establish itself as a profi table investment opportunity, the industry could attract the type of funding necessary to grow. There have only been a handful of studies that demonstrate
the size of the overall industry or its relationship to consumer spending. It is critical that regional and international associations work closely together to fi nance additional reports that effectively communicate the fi nancial potential in the spa industry. Major
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