spa
membership
HEALTH
CLUB SPA
Rhianon Howells talks to Nick Coutts, CEO of Holmes Place
Iberia, about the company’s spa membership business model
committed to spa
G
uaranteed revenue. That’s music to the ear of any The advantages of a membership-based business model versus
business, and it lies at the heart of the monthly pay and play are clear: it delivers a predictable revenue stream,
membership model of private health clubs. But encourages usage and secondary spend, and makes it easier to
what’s now standard practice for the fitness track customers’ needs and preferences and deliver value.
industry – pay a monthly fee and, in return, use the facilities But there are issues to overcome: the willingness of consumers
at any time – is new thinking for the spa industry, which has to make the commitment needed for a membership pricing
remained largely reliant on ad hoc business. structure to work, for example, and the need to balance the spa’s
This is also the case for health club spas which, although commitment to members with the needs of ad hoc bookers.
benefi ting from the opportunity to cross-promote spa services You’ll also need to decide how much to
to fi tness members, nonetheless tend to rely on people charge for membership, and what benefi ts
dropping in for the occasional treatment. to include, to ensure it offers suffi cient
However, with spa increasingly being seen as a lifestyle added value to members while also being
choice rather than an occasional treat, a handful of of maximum benefi t to your bottom line.
operators are starting to explore the option of offering spa Operators such as Holmes Place Iberia
memberships to guests who are willing to make a serious are proof this model can work for health
commitment to their health and/or beauty regimes. clubs, as CEO Nick Coutts explains.
How many spas does When we decided to have a go of the know-how from our personal
Holmes Place Iberia have? ourselves, we started with one spa and training (PT) business, which is an area
We launched our first spa in Cascais, used that to learn from our mistakes. we’ve very strong in. We’d started selling
near Lisbon, in 2006 and now have 17 And we learned quickly. A spa has all PT in packages of 10 or 20 sessions, but
Zensations spas in our clubs in Spain the challenges of a club, but on a smaller later moved to a direct debit model,
and Portugal. We’ll have three more by scale, and it’s the scale that was the whereby clients commit to one, two or
the end of this year. With the exception main issue: we were over-optimistic three sessions a week and we debit them
of our flagship site in Cascais, which about the margins we could achieve. It’s once a month. It was challenging at fi rst,
offers seven treatment rooms and a hard in Spain and Portugal, as stringent but now 80–95 per cent of the PT we sell
relaxation area, all our spas have four employment laws make it expensive to is by direct debit. We realised that we
or five treatment rooms. replace under-performing staff; if your knew very little about spas, but applying
margins are quite small in the fi rst place, this PT model to the spa business seemed
When and why did you this can kill your business pretty quickly. a real opportunity.
launch spa memberships? We realised early on that the spa
Before we launched the spa in Cascais, business was unforgiving – you can’t
How is your spa
we had spas in our health clubs but the afford to make too many mistakes. membership structured?
management was outsourced. We didn’t It wasn’t until a year after launching Our Zen Client spa membership is open
really expect too much from them – Zensations that we decided to introduce to both club members and non-members.
we’d just get a fixed rate for the space, a direct debit membership scheme for the For 50 a month, they get a 15 per cent
and we’d hope the spa operator could spas. In looking for ways to improve our discount on treatments, additional offers
offer a reasonable service. spa model, we decided to leverage some on special occasions such as Mother’s
Day, and priority booking.
What are the benefi ts
for the business?
Spa membership works not only because
the revenue builds predictability and
forecasting into the business, but also
because it gets psychological and financial
commitment from the guest: it stimulates
them to come to the spa regularly, and
gives therapists and managers the
Successful model: Three more
Zensations spas are planned for 2009
54 Read Health Club Management online august 2009 © cybertrek 2009
healthclubmanagement.co.uk/digital
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