This page contains a Flash digital edition of a book.
PROMOTIONAL FEATURE: PART 1 FEASIBILITY NEW SERIES VALUE PROPOSITION


If you’re thinking of investing in a spa bigger than 300sq m, a feasibility study – at a cost of only US$10k-US$18k – can reveal the business model most likely to succeed. We talk to WTS International president Gary Henkin about the best use of this powerful tool


FOLLOW THE SERIES 1. Feasibility studies


2. Concept & brand development


3. Design consulting


4. Pre-opening & daily management


5. Operational consultancy


A


WTS International carried out a feasibility study for the Wequassett Resort and Golf Club in the USA


feasibility study is important in gauging the viability of a spa development and its potential profitability. It’s also vital in


determining whether or not to proceed with the project and in helping decide the appro- priate size and scope of the facilities.


What exactly do clients get from a WTS feasibility study? WTS undertakes all aspects of the study from assessing the potential market, to recommending the appropriate size and scope of the facility, and from doing the fi rst preliminary space design to assessing the competition. T en, fi nally, we do a full fi ve-year fi nancial analysis. T e market and demographic analysis


examines the number of people and busi- nesses within a certain radius of the property and their income levels and other demo- graphic and sociographic information. T is knowledge is critical to the success of spas – for example – developments in urban areas,


where the spa is in a hotel. T e operator won’t always be able to count on attracting short-stay business guests to the spa, so they need to know the potential for attracting non-hotel guests and then to be advised how they can maintain that traffi c to create a sus- tainable and profi table business.


How do you assess the competition? We give a competitive set analysis which looks at local, regional and categorical com- petition to the spa and what they’re doing – their price points, menus, services, charges and so on. We give a thorough analysis so operators really thoroughly understand what the competition is, as opposed to what they think it might be based on preconceptions.


What about the scale of the investment? As part of our initial space analysis, we tell the owner what the spa should look like based on its square footage. We don’t do a schematic design at this stage, but we look at the breakdown of the space, for example,


54 Read Spa Business online spabusiness.com / digital


we show how big the locker rooms should be and the size of the treatment rooms. The financial analysis includes every


assumption for revenue sources. On the costs side we break down every expense generated by a spa.


What do developers gain? It will help them determine the costs of building and operating a spa. We give cli- ents a real roadmap for understanding what it is they’re getting into, both from a build cost and an operating cost perspective.


Why do spa owners need a feasibility study if they haven’t previously had this as part of their development process? T ings have changed so much compared with six or seven years ago and today there’s no such thing as a risk-free development. Economic conditions are tougher and


there’s a lot more competition than there used to be. As a result, it’s very important to have an informed approach.


SPA BUSINESS 4 2012 ©Cybertrek 2012


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76  |  Page 77  |  Page 78  |  Page 79  |  Page 80  |  Page 81  |  Page 82  |  Page 83  |  Page 84  |  Page 85  |  Page 86  |  Page 87  |  Page 88  |  Page 89  |  Page 90  |  Page 91  |  Page 92  |  Page 93  |  Page 94  |  Page 95  |  Page 96  |  Page 97  |  Page 98  |  Page 99  |  Page 100  |  Page 101  |  Page 102