Recovery Watch: Spas Will Lead The Way
The Associated Press just ran an interesting article that said spas will be one of the first places the economic recovery will show up. "What used to be an afterthought, from ordering wine with dinner to jetting off on a resort vacation, still feels like a splurge," read the article by Jeannine Aversa.
Spas, hotels, restaurants and shops will be amongst the first to see the shift as consumers feel financially secure enough to return to old spending patterns, she wrote. "Taken together, these seemingly minor transactions will likely help lift the country out of its longest recession since World War II."
Todd Walter, chief executive officer of Red Door Spa Holdings, is looking for customers to splurge again on facials and massages, rather than sticking with maintenance services such as hair cuts, color and waxing. "He'll also be watching for first-time customers, of whom there's been a 'fairly significant falloff' during the recession." Walter is also looking for a rebound in sales at resort spas, which were hurt more than day spas as people cut back on vacation travel.
Good info Anitra,
I certainly hope for the sake of our industry that the general premise of this article is correct. However I must say that Walter has no idea of what he speaks if he thinks that resort spas have been hit worse than day spas.
Day spas have felt the economic pressures since Jan-Feb or 2007 when their downturn began (I wrote about this in a January 2007 article for Spa Management). This timeframe may differ by region but most US day spas were feeling the pain in 2007.
Conversely, resort spas did not begin to feel the (real) pain until late spring or summer of 2008. This is self evident by the fact that resort treatment prices continued to rise until about September 2008 while day spas were struggling to hold their existing pricing throughout 2007 and the first half of 2008, followed by a subsequent deep discounting phase from late 2008 to now.
Resort spa business is down and most report revenues down 9-15% certainly no more than 20%. While day spas would love to have lost only 20% of its business as I hear numbers like 40-45% frequently. Frankly they lost 20% of their business before resorts had felt any downturn.
Best Wishes & Healthy Profits
Skip Williams
Resources & Development
Thanks for that data, Skip. It’s pretty sobering.
One of my massage therapist friends said that a lot of therapists he works with have gone back to school for medical tech training. They’re planning to leave the industry.
Let’s hope things improve soon!