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US franchise chain


Massage Envy has pared down its offering to


massages and facials only GOING CHEAP BUDGET SPAS F


ollowing in the footsteps of the fast- growing budget gym sector will be the arrival of the budget spa; health


club operators offering a spa will need to consider how this affects their business. All signs point to the fact that the spa


sector is ripe for change: the industry is currently dominated by high prices and relatively low volumes, combined with a large, untapped mass market. As with budget health clubs, budget


spas will have smaller footprints, fewer or no communal facilities, and a pared-down offer focusing on one type of treatment such as a massage, facials or reflexology. Treatments will have a lower, more accessible price point and more often than not will be packaged into memberships – where a set monthly fee will include an


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initial free service and future discounts – to encourage customer loyalty and volume. Done well, with high quality treatments and customer service, cheap doesn’t necessarily mean low-end. While the term ‘budget spa’ isn’t widely


acknowledged in the spa sector, there are already several successful businesses offering an affordable, simpler offering. US-based franchise chain Massage Envy


was acquired for an undisclosed sum by private equity firm Roark Capital Group in October 2012. Since 2003 it has grown its businesses to 800 spas in 45 states, with 1.25 million customers. The company has stripped its offer down to massages and facials – two of the most popular spa treatments – with monthly memberships costing between US$49 and US$59. Other


franchises of a similar ilk include Green Massage and Woodhouse Day Spas, also in the US; endota in Australia; Dragonfly Therapeutic Retreats in China; and Four Fountains Spa in India, which launched in 2009 and plans to have 300 spas by 2014. Nothing in the UK or Europe has taken


off as yet, and even in the countries where they have arrived, there’s room for more competition. Franchising will be a likely model for growth and, given the small footprint and relatively low entry point, growth will happen rapidly when it comes. The arrival of budget spas isn’t all bad


news, however, as they bring new business to the sector rather than just attracting customers from existing facilities: 22 per cent of Massage Envy customers have never had a massage before.


Health Club Handbook 2013 77


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