Saturday, August 23, 2008

Recession? Relax: Five Ways to Build Your Spa Business

Spas are a $9.4 billion business in the United States, employing more than 234,000 workers, according to the International Spa Association. But traffic has been flat or declining in recent years, even as the number of spas has tripled since 1999.

And, now that consumers are feeling anxious about paying for basic needs like gas, shelter and food, some spas are having to respond with a strategy to push business in the door. Here are five ways to attract and keep business, that is working for many of the top Spas:

  1. Reach Out to Corporations
    Companies are looking for the perfect outing to entertain their best clients or reward their best employees," says Pamela Margolis, co-owner and president of the Hotel Ivy Spa Club in downtown Minneapolis. "You don't have to be good at spa-ing -- there's nothing to practice. It's more flexible than organizing a round of golf ... and it doesn't take six hours out of your day."
  2. Discounts
    A recent web site headline from Green Valley Spa in St. George, Utah. read, "RECE$$ION DEPRESSION?" Alan Coombs, owner said, "We kind of looked at this recession we're in and said, look, for the next few months, or until this recession can somehow be evaded, let's cut our core program price in half." "Even in recessions or difficult times, spas are busy because people need what we have to offer."

    Another example is, the Oasis Day Spa in New York City who has been running a Two for Tuesday special for the past two years. Customers who book two 60-minute treatments on a Tuesday, usually a slow day, get the second one for half price. This year, the spa also is doing a Wednesday promotion with some massages and facials priced at 1998 levels.
  3. Internet
    "I think the Internet has been kind of a win-win for both spas and consumers," says Susie Ellis, president of SpaFinder, a Web site that publishes spa reviews and deals.
    Following the example of airlines and hotels, which long have relied on technology to adjust their prices based on changing supply and demand, more spas are using this strategy to beef up bookings during slow times. For the most part, these deals involve midweek and off-season discounts, last-minute specials and packages that are cheaper than booking several services a la carte.
  4. Focus on Service
    Many spa owners should focus on their existing customers and clients for a boost in revenue. With this in mind, TJWeaver, owner of Douglas J Salon, suggests focusing on service. "It is one of the best ways to add value without costing money," he says.
  5. Employees
    When the going gets tough, the employees you have will be your productivity all-stars. Make boosting productivity within reason, of course a focal point. For those that rise to the top, be sure to reward them accordingly. "You don't want to lose your most productive people at this time. Consider offering vacations or time off, which can be cheap incentives.

1 comment:

ComfortSoul said...

Hi Anna,

I think this is a great blog entry. Even though past recessions have not affected the spa industry as much, this current one is a bit of an anomaly because of the strength of the downturn.


Our company, ComfortSoul Spa Furniture has actually seen a spike in sales because of the recession. We see that our customers want to cut costs, while not sacrificing Service as you point out. Having a comfortable spa table is essential for providing great service.


Spa owners are now doing a lot more research to get the best VALUE. When times were good, it wasn't necessary to find the best value. Now it is necessary.


Companies like ours do not have a large marketing or sales budget, but we spend a lot of resources on maintaining product quality. Instead of marking up our products because of a massive marketing budget, we pass the savings to our customers. It taks a bit of research to find us, but when our customers find us they are very happy because they found such a great deal! In fact, we are the #1 result for "facial chairs" on Google because when customers find our company, they really do stay on our website and find what they need.


The economy is definitely a downer right now, but if your Spa cuts costs where it counts without sacrificing quality, you will be a lot better off when the economy bounces back!