Category: Cover Story

In recent years, the global Spa and beauty industry has witnessed tremendous growth – over 30% annual increase. What changes has China’s Spa industry undergone in the past 15 years? By Fifi Kao

Just one year before the foundation of SpaChina Magazine in 2004, the first Spa opened in Shanghai. Nowadays all real estate owners, including hospitality people, around the country realize the influence of Spa and therefore build Spa into all high-level clubs and hotels. As more and more people love to go to Spa, almost all five-star hotels are now equipped with this facility to meet the needs of their high-end guests and to represent their own quality standards. Fifteen years have passed, and Spa is still a rising element of the economy with continual rapid growth.

Recent data show that the Spa industry in the United States is undergoing the fastest growth of all the leisure and tourism industries, while in Europe, more than 20 million people go to Spa every year. According to ISPA, Spa has become the fourth-biggest leisure industry in the U.S., generating even more profit than theme parks and cinemas. In China, the wellness and beauty economy has been increasing by an average of 18% each year, a much higher rate than the growth of GDP. The “Wellness Economy” has become the fifth consumer driver in China, following real estate, automobiles, e-commerce and tourism.

In the global market, there is a rise in male Spa goers, now occupying 39% of total spa-goers. However, in China, including Taiwan, and East Asia including Japan and South Korea, female guests are still the mainstream, contributing 89% of the total. Guests’ average age in the globe Spa market is 41 years of age, while the figure in Asia in 38. China particularly sees a younger tendency. People who seek the comfort of body and mind are much willing to pay $100 for 1-to-2 hour beauty or Spa treatments.

In May 2017, China’s National Health and Family Planning Commission, National Development and Reform Commission, National Ministry of Finance, National Tourism Administration and State Administration of Traditional Chinese Medicine jointly released the Guidance for the Development of Health Tourism, which advocates the creation of diverse health tourism products relying on featured resources – nature, culture, ecology and location, and important travel destinations, and developing a health tourism industrial chain by focusing on a series of key fields including high-end medicine, specialized subjects, recovery and rehabilitation, and combination of treatment and convalescence with the support of medical establishments, health management institutes, rehabilitation centers and wellness retreats. The Chinese government has recognized the health industry as a key sector for the stable development of the nation’s country. Undoubtedly, health has become a necessity for Chinese people.

As health becomes a must, beauty, Spa and wellness start to draw more and more attention. So in this context, what changes has Spa undergone in China?

Spa goers become younger

Just like 15 years ago when it first came to people’s attention, Spa is still a symbol of high quality life. But its forms and the age of guests have changed. Spa has now become a charge station for the body and the mind, covering appearance polishing, body shape improvement, character and mentality cultivation, energy refueling and stress alleviation. It is also a way to demonstrate the lifestyle of modern people.

Meanwhile, the main drivers have changed. Fifteen years ago, the mainstream clients were people born in the 1960s and 1970s, while now most Spa goers are products of the 1980s, 1990s or even 2000s. These modern young people exhibit different consumption habits and health needs compared to their counterparts 15 years ago. Today’s consumers emphasize the overall experience and seek both the time and space for freedom and entertainment. They are the main players of the We-Media world, and they are keen to share the facilities, hardware and treatment details they have seen and experienced with others via social media, and by so doing celebrating their own lifestyle.

They are willing to pay a lot for “more beauty, uniqueness and self-expression”. In other words, they aren’t really pursuing health; instead, they are more interested in appearing perfect, having unique experiences and showing off their own personalities.

Social platforms gather birds of a feather together

With its diverse functions, Spa has attracted different types of people, ranging from ordinary workers to high net-worth individuals with treatments priced at no more than 100 yuan to over ten thousand yuan. Finally, birds of a feather still flock together. Guests who share the same goals of health, beauty and mental cultivation, who recognize the value of certain Spa operators and who follow the same brands, will go to the same types of Spas. Such energy pooling will play a vital role in the future development of the Spa industry and therefore serve to differentiate the services and offerings among the Spas. It is the consequence of market competition.

Higher demand for products, technology and services

Perhaps you have already discovered that the layout of China’s department stores has changed in during the past couple of years. The main sections of stores are now: international supermarkets offering high quality foods and daily products, F&B, cinemas, family time facilities, child education, and wellness & beauty. Experiential consumption is now the mainstream.

As Spa has now insinuated itself into people’s daily life, there are sometimes more than one Spa on the same level of the malls. Obviously, the competition has become much fiercer. Moreover, today’s guests are more mature and sensible in terms of their consumption attitudes. Therefore, only those who can pass the test of the market will be left standing. Spas with inadequate services, techniques and products will be knocked out.

Spas offer a wider range of services

A healthy body, good appearance, bright and clean skin and perfect body shape are what Chinese customers are always after. Currently, in China’s Spas alone, there is a broad array of services on offer including hydrotherapy, thalassotherapy, aromatherapy, thermotherapy, music therapy, de-stress, detoxing, color therapy, halo therapy, skin management, weight management, natural hot spring and more. Spas providing international-level equipment and products, personal beauty and fitness programs, and health consultations, are becoming increasingly popular. Nowadays, people are placing Spa treatments on their routine schedules, and regard them as important as a good diet and regular exercise.

Biotechnology skincare enjoys popularity

Beauty programs featuring high technology and equipment now make up over 70% of the total offerings in city Spas and in beauty salons overseas. According to preliminary research by SpaChina, such programs make up over 40% of offerings in China’s Spas and salons as well. More and more people are beginning to have the same requirements for Spas as for beauty salons, meaning a wider range of services, especially anti-aging treatments and biotechnology skincare. International Spa brands have been launching highly effective anti-aging products and non-invasive high-tech equipment treatments. The best sellers at city Spas and beauty salons currently are hyaluronic acid injections and minute bubble (AHA, BHA) cleansing treatments that are based on biotechnology. Although many beauty salons perform violations using invasive equipment, there is no doubt that high-tech treatments have become a trend, and high-tech equipment stake its due sh the market.

Chains’ management of city Spas and beauty salons

From the perspective of market share, chain Spas and beauty salons have done perfectly well during the past two to three years in China while hotel Spas are not doing so satisfactorily. China’s market has huge potential and thus attracts large flows of foreign investment to open regular chain beauty salons or franchise chain stores. French brand SIYANLI entered the China market in 1996 and then expanded from Shanghai to Beijing, Chengdu, Shenzhen and Guangzhou. The German brand Beauty Farm has also strongly expanded the number of its chain stores in China. With time, however, a centralization of chain brands will occur. There are tens of thousands beauty salons and city Spas in China while chain stores occupy only 10% of the market. In Europe and America, however, the proportion of chain stores has reached 50%.

Spa product and equipment suppliers update their services

If a Spa doesn’t offer high-tech and highly effective products or equipment, it will be regarded as inferior. So the next five years will be the golden age for quality Spa product and equipment suppliers. Moreover, these suppliers will also carry out business and professional training, marketing and promoting activities, and some may even provide franchising programs, treatments collaboration, financial diagnosis and management planning.

The future of Spa industry

The Spa in the future will by no means simply be several treatment rooms. There will be more and more high-tech equipment and products, as well as VR experiences. Some fitness companies have already integrated VR into their equipment to make the work-out more entertaining. This can be also applied to treatment rooms, to show different scenes and effects with VR technology.

With the development of technology, Spa treatments will deliver more amazing effects, even catching up with that of medical treatments. But at the same time, there will be a surplus of medi-beauty in the next five years. Consequently, traditional treatments which emphasize body and soul recovery will return to the stage, which may cover the concepts of energy, magnetic fields, heart and soul, universe, self-healing and self-capacity stimulation. The Spa in the future should be able to offer holistic experiences integrating yoga, aerobics, brain awakening, healthy diets and personalized fitness…

Fewer staff and more equipment is the trend, which will largely improve operational efficiency. But staff will not be completely replaced. Staff and equipment will reach a golden balance where customers can both feel the warmth of manual manipulation and the effects and efficiency of equipment.

The wellness industry is changing so fast; it is hard to keep up with the launch of new products and machines. However, there are two over-arching trends that I’m particularly enthusiastic about: the first is a movement known as ‘biohacking’; the second is a trend in demand for services targeting seniors.

Biohacking is an approach to wellbeing that started quietly in Silicon Valley around 10 years ago, but has grown exponentially and become global over the last couple of years. In essence, biohacking is about manipulating your biology, psychology, lifestyle and environment to get the best possible health outcome in the shortest time and with the least effort. Innovations range from food to fitness; mindset to mood enhancement; sleep to stress management; energy to environment…it covers all the bases for successful living.

One example is from fitness: we’re now able to do the equivalent of 2.5 hours heavy weight training in twelve minutes. Using computerized resistance that responds to each user’s ability, the workout is not just more effective – it’s also much safer, so is equally beneficial for elite athletes as for fragile seniors with conditions such as arthritis.

Speaking of seniors, I’m delighted to see so many businesses targeting this market – especially in China. Many of the biohacking innovations effectively manage the aging process and reduce the incidence of chronic disease, however the movement is still young so the market requires education. The technology is also currently limited in its availability, however China moves so fast in adopting new technology, I’m sure it will catch up soon!

Physically, apart from the muscle strength training previously mentioned, we can boost bone density in as little as 10 minutes a week, and cardiovascular fitness in 21 minutes a week; again from a very safe machines specifically designed for aging populations. These workouts also boost youthful hormones and reduce inflammation in the body, so are fantastic for overall rejuvenation.

Even more exciting are the interventions around brain training, as loss of memory and cognitive function is the number one fear in aging populations. Using technology from simple apps to high tech headsets, significant improvements can be made, not just in memory and intellectual capability, but also in mood – helping to alleviate depression and anxiety. Results are even better if we combine with food therapy and other lifestyle interventions.

A new wave of tourists from China is changing the outlook for the spa market in Thailand – for the better. But the spas need to adapt. Asian Spa veteran Samantha Foster explains

China has indeed become the most important inbound market for Thai spas. Language is the key requirement, and many spas are employing Chinese-speaking staff or developing multi-liingual menus and tools to help with communication.

The independent traveler tends to visit high-end spas and so, to attract and meet the needs of these clients, Thai spas should up their game in terms of digital marketing and e-commerce. I am stunned at how quickly China is becoming a cashless economy, with everything being searched for, ordered and paid for online. Thailand is way behind in this respect, and so spas need to ensure they have a strong and attractive presence on WeChat, strong organic search on Chinese search engines and be set up to accept electronic payment – ideally via WeChat or Alipay, although I’m not even sure if that is possible in Thailand yet!

While the number of independent travelers is growing, a lot of Chinese business is still done as groups, organized by the many specialist agents who arrange spa visits ranging from basic massage through to cosmetic procedures and rejuvenating cell therapy.

Group bookings sound attractive, but they do create challenges for operators. Hefty commissions (up to 50%) are payable to the agents, making profits quite tight. Also, groups are often noisy, and so spas have to create systems to manage these guests in a way that fosters the social connection of the group while at the same time ensuring peace and privacy for other guests, such as by limiting group size, blocking off the spa at certain hours, or creating dedicated group facilities.

I have lived in Asia since 1993, including three years in Shanghai before coming to Thailand in 2011. There are big cultural differences in the way of doing things. Everything in China is faster, and people are more demanding. It is well known that the Chinese people work hard and long hours, which has been great for prosperity in the country generally, but it also creates a lot of stress, with related problems in sleep, mental health and especially cardiovascular disease. Add to that the burden of environmental pollution, and it is no surprise that Wellness has become a priority for many Chinese people and for the government alike.

This is a generalization, of course, but the Thais do tend to be softer and more relaxed in their approach, which translates to a slower pace of life and less stress. The biggest health challenge in Thailand is diet, as most food is laden with sugar. It used to be rare to see an overweight Thai person, but today around 32% of the population is considered overweight, including 9.6% obese and 10% having the diet-related illness of diabetes. (WHO 2016 statistics). Sadly, there seems to be little public health education in this area.

In terms of business, there are pros and cons to each of these cultural approaches.

The Wants and Needs

The wants and needs of clients from China and from Thailand are quite similar, varying more by client type, gender and age rather than by nationality.

If a spa is targeting tourists, as many spas in Thailand are, its clients are usually looking for something connected to the location that they are visiting. Thai massage and body treatments using Thai spa products such as scrubs and wraps continue to be popular, as are treatments such as foot massage, which are very cheap and serve the needs of weary travelers. Likewise, visitors to China share a desire to experience treatments drawn from Chinese culture; with treatments often based on element theory with TCM techniques and ingredients.

Local clientele from both countries enjoy massage as part of affordable health maintenance, although the Chinese clients generally prefer a more vigorous treatment.

For Thai ladies, manicure and pedicures are routine, and treatments that relate to appearance are also popular – be it slimming, whitening, anti-aging or cosmetic enhancements. Thailand is a regional hub for cosmetic procedures. Younger ladies embrace quick-fix procedures, ranging from botox to get a V-shape face through to eyelid, nose and breast surgery. Older clients are increasingly turning to rejuvenation treatments, including cell therapy. Stem cell therapy is theoretically illegal in Thailand, however it is being offered for anti-aging under the guise of ‘fat transfer’.

Many Chinese clients are coming to Thailand for these treatments, as there is greater trust in the aesthetic service quality, and cell therapy is still very limited in China.

One key difference in China, especially amongst the older clients, is a preference for traditional medical systems. While Thailand does have its own system of traditional medicine, it is not well known by spa professionals (except Thai massage), and it is not integrated into everyday life the way TCM is. We find that senior Chinese clients are most comfortable to engage in spa services if they include TCM, and so I am sure we will see more authentic TCM emerging as it is also in alignment with the government’s five-year plan.

The Services

There is a perception that Thailand has a natural sense of service culture and that China does not, but this is a generalization. I have had exceptionally gracious service in China, and quite rude service in Thailand. So it is not impossible for Chinese spas to deliver world-class service, but it takes intention, commitment and time to build the right business culture – and it needs to be done from the top down.

If the spa owner wants their staff to treat their guest a certain way, they have to set the standard and treat the staff with respect and fairness. It needs to be clear, in communication, working conditions and practices, that it’s not all about the money.

Service starts with hiring the right personality – someone with warmth and emotional intelligence – not just the right skill set. It is then developed through continual training. Sadly, many Chinese spas don’t like to invest in training because they are worried about staff turnover, but in my experience, if you demonstrate to the staff that you have their interest at heart, and that you are willing to continually help them grow and develop, they can remain loyal over many years.

In cultivating a service culture, if Training is the ‘carrot’, then Performance Appraisal is the ‘stick’. Every staff member should have both KPI’s (Key Performance Indicators) that evaluate what they do, and Professional Behaviours, which evaluate how they do it. In an HR approach known as balanced scorecard, employees receive incentives based not just on achieving financial targets, but also on meeting expectations for things like: service, timeliness, teamwork, positive guest comments, etc.

In Thailand, a 60-minute aromatherapy massage at a reasonable quality day spa like Let’s Relax costs around THB 1,200 (RMB 240), although it is certainly possible to find it for THB 800 or less. The same service at China’s Green Massage, which is comparable quality, is RMB 398, or about 65% higher. I suspect that the lower pricing in Thailand is because the market is far more competitive. In Bangkok, there is at least one spa in every block… if not more!

Pricing at international hotel spas tends to be similarly priced across countries, as hotel brands want to create consistency in perceived brand quality and positioning.

Medi-spas are much harder to comment on, as they vary so much within the home market. For example, an ‘official’ Botox treatment (using Allergan) product in China will cost you around RMB 4,000+, but if the Chinese generic product is used, it can be half that.

Government Support

Thailand has become a lot more regulated in recent years, with regulations introduced in 2016 covering five areas: premises and operator now must each be licensed; therapists must be government certified and registered; services, products and safety measures. The Thai Spa Association works closely with various government departments, and so there is a good deal of mutual support.

It is more difficult for holistic wellness centres, as this is an emerging category and the government doesn’t quite know how to deal with it. Often classified as clinics, hospital-style rules are imposed for facilities and staffing, with which wellness centres struggle to comply.

I am less familiar with licensing requirements in China, but I do know that the Chinese FDA regulations that require animal testing on all imported cosmetics are still making it very difficult to get high quality natural products into the country, despite the great demand from Chinese clients. Ethical brands are not willing to compromise their values, but I understand that the FDA is now looking at alternative testing methods. China is the last major country to require animal testing, so when it does finally abolish this requirement, it will be a huge boost to quality and the industry.

Doing Business in China and Thailand

I love working in China because things get done. People are keen to learn, and willing to stretch their knowledge and skills to reach new heights. Generally, Chinese people and companies are good at embracing change; they have an appetite for the ‘new’ and adopt new ideas faster than any country I’ve ever worked in, which is exciting.

However, there is a downside to this need for speed. Quite often unrealistic deadlines are imposed, and insufficient time is allowed for research and planning, so projects race ahead with implementation leading to compromises in quality and functionality. Often things get put on hold and openings pushed back because of the need to go back and re-do elements. It would have been more efficient, both in terms of time and money, to have allowed a little longer in planning and implementation to begin with.

Similarly, the race to embrace the ‘new’ also allows products and services to take off in China without proper evaluation of their safety and efficacy. As a result, there are a lot of gimmicky healthy and beauty products on the market, which is not great for the integrity of the wellness industry, but unfortunately it can also be dangerous. Thai medi-spas receive a lot of clients from China who are seeking ‘repair’ after having had their skin damaged by sub-standard equipment or poorly-trained therapists, although this trend seems to have improved in recent years.

The pros of working in Thailand is that we usually have more control over the spa development program, and that it is easier to find qualified staff. Language used to be a challenge, but given the importance of tourism to the Thai economy, it is now increasingly easy to find experienced Thai spa staff who speak English. It is a different story if you need to hire expats, however; the Thai government is making it more and more difficult to get work permits. It is also very difficult to import products or equipment, taking a long time and demanding enough paperwork to destroy a small forest.

As a result, Thailand continues to be a regional centre for Spa, with an emphasis on manual therapies and locally made products. It is also highly regarded for medical aesthetics and anti-aging, typically offered in hospitals and clinics. However, it is not so advanced in the more high-tech holistic Wellness services. I expect China will easily overtake it in this sector.

I am currently working on an integrated wellness centre in Bangkok, pretending to be a slimming centre. We have found that the phrase ‘wellness centre’ tends to attract two types of people: those who are already wellness-savvy, and those who have had some kind of health scare and need to take desperate action. We wanted to target those in-between, to improve their health before a crisis occurs. Called BodyConscious, the program differs from the typical slimming centre in that we don’t offer diet pills or miracle creams; we look for the root cause of the person’s weight challenges and create a personalized program to fit. Guided by a comprehensive medical assessment, solutions include nutrition, movement, counselling, TCM, hydrothermal, body treatments, and – for some – may also include intravenous nutrition and natural hormone supplementation.

Our projects in China include a new wellness resort near Shanghai, due to open early 2019. Currently the site has an existing 98-room resort, a successful medical body-check clinic and a conference facility. Our job is to convert them into a seamlessly integrated whole, offering a variety of wellness packages for both individuals and corporates wanting healthy meetings. The site has extensive gardens and a fabulous organic farm. Combined with the owner’s vision to modernize TCM in an authentic, accessible way, we look forward to this property becoming a jewel in Chinese wellness hospitality.

DSM has also recently been appointed to convert a 250-room hot spring hotel in Beijing to a wellness property. Part of a mega-masterplan which also includes a medical centre and seniors’ living community, this client has ambitious plans to be the gold standard of wellness resorts in China. It will be a challenge to apply our personalized approach to wellbeing at such scale, but we’re looking forward to it!

My current thesis is that hotel spas, as they are today, are broken. At the very least, they are sub-optimal. And that is exciting! Why? Because it means there is a massive opportunity for those of us in the industry who can work out how to fix it. And believe me, the market wants it to be fixed.

By Trent Munday

Let’s think about the perception of the spa world is today. I think it’s the perception of people both inside and outside the industry.  Spa is centered. We are all spiritually, emotionally and physically, aligned. The business is great, life is wonderful. All is good. All is well. But is this perception in fact the reality? The challenge is that those outside of the industry often don’t really look that hard. So they may not ever really know for certain. And those within the industry, often tend to be quite insular in their perspectives. We just communicated with others who share similar perspectives to our own. We attend spa conference and events and come away reassured that we’re on the right track.

The challenge with these conferences – and I think it is the same with any industry event, in any industry – is that because we are surrounded by like-minded people, we get a form of confirmation bias. Everyone in the room believes a spa is great. We all think wellness is the one of the most important things in the world and everybody needs to know about it. But when you talk to people outside of these rooms, sometimes you get a different response. That’s why I always like to see to seek out the non-spa people when I go to these events. The Finance guys, the Investment guys, the Owners, you get their perspective because sometimes I think the reality can be quite different. Sometimes, if you invite others in from outside and show them the facts, without any previous knowledge or bias, you’ll get a very different perspective on where you are at.

So why do I say the hotel spa model is broken?

Capture Rates

Firstly, Capture Rates are generally low. For those who don’t know, Capture Rate is the percentage of hotel guests who come down and use the spa. In a city hotel, most spas will have a Capture Rate of somewhere between 1% – 5%.  In a resort spa, and by resort spa, you could expect anywhere from 7% to 15% Capture Rates. And by resort spa, I’m talking about one that is easily accessible so guests are not forced to stay within the resort grounds the whole time. A resort where you could drive in and out every day. Locations like Bali in Indonesia, Phuket in Thailand, for example.  Finally, for a remote resort spa, somewhere like Maldives, where the guests stay on those small islands for the duration of their stay, spas should be able to achieve Capture Rates of up to 25% to 30%. But many won’t.

So, if we look at it in another way, what that says to me, is that anywhere between 70% and 99% of the guests in a hotel, don’t want what we are selling. Or at least they are not buying what we’re selling. To any unbiased person, that does not sound optimal. So, something has to change.

Profits

Another reason I feel that the hotel spa business is broken right now, is that overall profits are declining. I was actually at a spa event recently where one of the local spa operators came up to me and asked, “Are you guys still making money?” That of course suggests to me that he probably wasn’t making money. And this is not a unique conversation. I get that question often, from both hotel operators and also from spa operators. The issue is, quite simply, that our costs keep increasing, but our revenues are not necessarily increasing along with them, at least not at the same rate. And increase in your top line revenue of say 10%, could quite easily end up as only a 2%-3% increase in your profits. By the time you’ve covered the increase in your staff salaries, rising product and supply cost, rising utilities costs, etc., you could easily eat up well over 5% of your gross revenue increase. So, if your owner is looking for a 10% increase in her profits next year, that will mean your spa needs to increase top line revenues by at least 15%, maybe more.

Treatment Prices

I also think we have hit the ceiling of what we can charge for a treatment. We cannot expect our customers to keep pulling out more money from their wallet for a one hour treatment than they already do. I believe we’ve reached the limit of what is a fair price for the services we are providing. When I first started with Mandara back in 2005, the conversations around budget time each year, was all about how much we are going to increase our prices. Not if we would increase, but by how much we will increase. And I am talking about above and beyond whatever increase we had in our operational costs. It was really a question of how much we felt the market (ie: the customer) was willing to pay. We would simply increase 3%, 5%, 7% every year, because we could. Because that is what the market would take. Today, the conversation is more about can we actually increase at all, or do we need to think about maybe a decrease?

Occupancy Rates

It has always been interesting to me that even though we operate in hotels, we rarely talk about the Occupancy Rate of our spas. Occupancy is of course a key statistics for hotels, but not so for hotel spas. Maybe part of the reason for that is that this is another metric that doesn’t look great for most hotel spas? 30% Spa Occupancy is about the average rate. If you have a spa with four single treatment rooms that operates for 10 hours per day, that would mean you could do potentially 40 hours of treatments per day. If your spa is running at a 30% Occupancy Rate, you would only be performing only 12 hours of treatments per day. If a hotel was operating at 30% occupancy, the General Manager would probably lose his job. But in spas, somehow, we just seem to accept a number like this as the norm.

Therapist Utilisation

Everywhere I go these days I keep hearing that we need more therapists. But I actually think the real issue is we need more customers. That’s what the numbers seem to suggest. Because most therapists are only doing three to four hours of treatments per day, on average. Assuming that they are there to work for eight hours a day, that’s not very efficient. If we consider that treatment hours performed is what generates 85%+ of most spas’ revenue, it is simply not sustainable to have such a low level of productivity. And yes, I do understand that massage is a little bit different, because it can be physically quite tiring. But let’s be honest. In most cases, with most therapists, in most hotel spas, that is not really a major factor. The simple fact is, we need to be able to operate more efficiently. We either need more treatments booked, or fewer therapists – not more.

And often when we do these conferences, we’re in nice hotels with maybe nicer spas; so those numbers are a bit higher. In my job, I tend to travel around a lot, I go to a lot of different spas in a lot of different hotels, in a lot of seasons, in a lot of different countries and these are the numbers that aren’t getting back when I talk to people.

For sure the hotel spa business was not always like this. But today, like everything, the hotel spa market has changed. Unfortunately, we are not changing with it. Once upon a time, if you wanted a decent spa experience you had to go to a hotel spa. Today, with the proliferation of Day Spas, customers have many more options for a quality spa treatment. We have to evolve. Because our whole environment is changing and if we don’t I think we are at risk of becoming a little bit obsolete, at least as far as our guests are concerned.

Same Same…But Different

Every spa manager or owner that I speak to believes that their spa is unique. Truly different from all the other spas. But what do our customers see?

There’s an easy way to find out, Just type in the word ‘spa’ into your favourite search engine, then click on the Images tab. What you will find is a lot of images that all look very similar. And these are not usually stock photos. These are photos that these spas are having produced themselves. They are paying professional photographers thousands of dollars to take a unique photo of their spa – that looks just like all the other spa’s photos.

Here’s another way to check just how well we are doing in differentiating ourselves, in our customer’s minds. Take a look at any of the spa magazine or websites that cover hotel spas. Have a look at the images for each one. As mentioned above, they all look very similar. But also read the words. Look at how spas describe their benefits and features. Once again, you’ll find there’s a lot of Same Same.

So as far as our customers are concerned, there’s not really much difference. Why would they choose one spa over the other? What’s compelling? It’s time for hotel spas to take a long hard look in the mirror at all aspects of our business and see ourselves as our customers see us.

The Circle of Life

It’s important that we don’t beat ourselves up over this. The current state of the hotel spa business may not be great, but it’s also not that different from many other businesses. Indeed, all businesses essentially follow the same cycle of Idea – Growth – Maturity – Decline – Death. What separates those companies that survive and flourish over time, is Rebirth phase. Somewhere between Decline and Death they find a way to innovate and adapt to the changing market conditions. And this is what’s really exciting about the hotel spa business today. We are right around that Rebirth stage of our business life cycle. If we can innovate and adapt, we will then grow from where we are today to an even bigger and more impactful industry. If we don’t, we run the risk of dying off. That is the opportunity.

So, the challenge before us is one of innovation. What can we do differently? What new ideas and concepts can we come up with to get us off this path of decline? Here’s a few suggestions…

THE FUTURE OF HOTEL SPAS The Third Place

Starbucks is not just a place to drink coffee. The brand vision of Starbucks was to be the place you go between home and work. The Third Place. A place to get some work done, or to have a discussion with friends or colleagues or to eat some food or even, if you really want, to drink some coffee. Hotel spas have a great opportunity to become a Third Place too. At the very least, a place between the hotel room and outside. But I believe the opportunity is bigger than that. I see no reason why spas in general can’t rival Starbucks for the title of the Third Place. Spas no longer need to be a passive place. Instead, they can be a place to do some work, answer some email, make some calls, meet some colleagues, have some food, learn something new, be entertained, etc. The opportunities are endless, if we just release our minds from the constrains that we have imposed upon ourselves because this is a spa – and a spa is XYZ.

Organizational Face of Wellness

A good friend of mine and of SpaChina is Professor Gerry Bodeker. Gerry once said to me that spas have the opportunity to be the Organizational Face of Wellness. At the time, I had no idea what he was talking about. I later found out that Gerry meant was that we have an opportunity to be the door to the Wonderful World of Wellness. We can be the guide for our customers to discover and benefit from some wonderful new techniques – or sometimes ancient techniques that have been rediscovered – of wellness, of health and of relaxation. People don’t necessarily trust the little shop or clinic or the day spa on the street, but we are a hotel spa, they trust us. So, we have the opportunity to lead them. It is definitely a feasible innovation for us, but I don’t believe hotel spas have yet begun to exploit it.

Spa +

We all know that time is the most valuable asset for most people today. So, instead of your hotel spa being a place for pampering, think about it more in terms of a functional service centre. You can drop your car off for a wash and vacuum and have a coffee and donut while you wait. So why not allow your guests to drop their body off for a bit of servicing and get some other things done at the same time?

Let’s say a guest wants to get his shoes shined every night, ready for the next day. But the first thing he does instead when he walks back into the hotel after a day of meetings is stop in the bar for a couple of drinks. By the time he gets back to his room to take his shoes off, housekeeping has already gone for the day so he can’t get his shoe-shine. How can you give him what he wants? What if you could create a space where the busy corporate traveller could come back in after a tough day pounding the pavement, slip his shoes off and sit back with an ice-cold beer, while getting a relaxing foot & leg massage. Then when it’s over, he gets his shoes back looking brand new, having just had a thorough polish? You’ve now solved the one problem, the shoe shine but you’ve also helped solve another problem – relaxing after a tough day. And in solving these problems you’ve created another service that this guest will gladly pay for.

What we need to do now is to think differently. What we are doing right now just doesn’t seem to be working anymore. At least not like it used to. Imagine if the concept of a spa didn’t exist at all. Imagine there were no such thing as a spa. Now, if you are a hotel owner or General Manager and you have this available space and you want to try and find a way to generate more revenue for your hotel or your service for your guests, what would you put in there? Remember, spas don’t exist. What would you put in that space today? Would it be a spa as we know it today? Based on the numbers we shared earlier, probably not.

So, I think that is what we in the spa industry need to do. Imagine if a world without spa, then reimagine spa for the next generation.

We are truly at an inflection point. And that represents an incredible opportunity.

As Theodore Roosevelt once said …

Do something now. If not you, who? If not here, where? If not now, when?

Wellness was once associated with spas (and spas alone), before a wellness travel spree fast caught on. Today, the same word has been anointed with a more holistic meaning, deeper understanding and new insights. By Jenny Lo

It is an exciting time, when wellness is gaining the global traction it richly deserves, opening up a whole new world of opportunity powered by innovation. It is more than a social mission, it is a belief, a conviction and a driving force. Let’s take a look at how the culinary industry, architectural firms and energy-efficiency practices are adapting to the changing consumer perceptions influenced by wellness.

Planting a Future

From baby boomers to millennials, their growing interest in healthy eating and concern for environmental issues have sparked a plant-based food revolution worldwide. Look around, there are now more plant-based alternatives to meat and dairy products than ever before. Even more impressive, these substitutes look, taste and appear like the real deal. In response, chefs, farmers, educators, policy makers, startups and food giants are working together to secure a future where there is sufficient access to nutritious food.

Global food giants Cargill, Tyson and Unilever, along with startups like Impossible Foods and Beyond Meat, have invested heavily in creating plant-based protein alternatives. The Los Angeles-based Califia Farms is a noteworthy example. Dubbed one of the 25 most innovative consumer brands by Forbes’ CircleUp25 in 2016, they are leading the plant-based food and beverage revolution, committed to making healthy and great-tasting premium beverages through transparent, socially-responsible manufacturing from farm to shelves.

While it may sound far-fetched to have vegetables as carbs, jackfruit steak, tuna tomatoes or meatless burgers that ‘bleed’, these items will feature heavily in restaurant menus in years to come. Where beef was once king at fast-food chains, more companies are expanding a serious vegetarian line, such as UK’s Veggie Pret and new veggie chains taking the lead like Amy’s Drive-Thru and Plant Power Fast Food. Closer to home in Shanghai, the one Michelin-starred Fu He Hui has glorified Chinese vegetarian cuisine with an haute spin, while offering diners an awe-inspiring journey of discovery of exotic plant-based ingredients from China.

Farmer-chef collaborations are also reaching new heights, with chefs becoming farmers and vice versa, resulting in restaurants bringing the table to the farm. On the global stage, lists such as Plant Forward Global 50, which honours industry stalwarts and innovators who have taken steps to introduce plant-centric menus, will become as celebrated as The Michelin Guide and The World’s 50 Best Restaurants list.

Now, imagine a world where pesticide-free fruits and vegetables are produced in cities and grown within former shipping containers using renewable energy. Sounds like a pipe dream? Due to a growing number of millennial engineers and agronomers, such as Agricool, which sells strawberries in the middle of Paris, these “mini farms of the future” could soon be found in major cities all over the world. It does seem achievable, after all.

Wellness by Design

Wellness design and architecture are high on agendas. Design plays a significant role in human health, both biological to neurological. From basic environmental factors like daylight, air filtration and sound, to more specific personal likes and dislikes. How our environment looks and feels is integral to our well being. These days there is even a term for designing for wellness – ‘salutogenic’ design – and it is the ultimate investment in people.

Creating healthy living spaces as an antidote to the stresses of modern urban living is critical, especially in burgeoning developing cities, many of which struggle with the growing pains of rapid development – endless construction, traffic congestion, overcrowding and, of course, pollution. Working towards a world in which our built and living environments are sustainable and make us feel good is a challenge gaining traction with designers.

As buildings get taller and cities denser, it is vital to instill a sense of community and nature into architecture. Beijing-based Ma Yansong of MAD Architects designed the undulating Fake Hills apartment complex in the coastal city Beihai to look like the surrounding mountains, a visual standard-bearer in the fight against those standardized housing blocks of Mainland cities.

In Taiwan, Tao Zhu Yin Yuan, the 21-storey carbon-eating tower by Vincent Callebaut Architectures of Paris, will soon celebrate its opening. Shaped like the double helix pattern of human DNA, the tower is covered in 23,000 trees and shrubs in a bid to help purify the city’s air. Experts say this is a small but significant step forward in eco-friendly architectural design.

The bucolic natural scenery and meandering waterways of the Xixi Wetlands in Hangzhou appeal to those who want to get back to Nature. A new 40-unit floating village-style residential project by British Firm David Chipperfield Architects taps into the ancient appeal of living on the water. Canals weave in and around the complex, with dark stone cubic buildings rising like floating monuments. Large windows welcome Nature in, shutters filter direct sunlight and the waterscape acts as a cooling agent to counteract the summer heat and humidity. Also in Hangzhou, on scenic Qiandao Lake, is the Ripple Hotel – the name inspired by the movement of the water on the lake – with Bauhaus-style architecture by German firm GMP and interiors by Shanghai firm XL-Muse. Here, the 12 duplex villas reflect a microscosm of Hangzhou’s natural landscape, incorporating natural materials like woven bamboo, wood and splashes of muted colour.

Wellness design and architecture is also about creating experiences. Calvin Tsao of New York-based Tsao & Mckown Architects knows this well and has recently created the Sangha Retreat by Octave, set on 47 acres overlooking Yangcheng Lake near Suzhou. An all-encompassing wellness retreat of private houses, apartments and two hotels, Tsao conceived Sangha’s master plan, buildings and spaces to encourage both congregation and quiet individual introspection, mindfulness, and self-expression.

Sustainability First

Environmental challenges are prompting architects and designers to work hard to reduce – and even eliminate – their impact on the world around us.  Some design thinkers advise that we should pay less attention to ‘form follows function’ and instead concentrate on ‘form follows environment’ in a bid to create meaningful projects that positively impact human behaviour. This rings particularly true in China where decades of development have led to stresses (pollution, congestion, industrial production) which negatively impact health and lifestyles.

Yet China has always embraced innovation and it is heartening to see this played out in eco-aware projects currently underway. Stefano Boeri Architects’ greenery-filled Nanjing Vertical Forest, backed by Nanjing’s Yang Zi State-owned National Investment Group is one example. The project, inspired by Boeri’s Bosco Verticale project in Milan (2014) is set to be Asia’s first vertical forest.

Two plant-clad towers (the tallest 200 meters high) form the centerpiece of the 6,000-square-metre site that contains 600 tall trees and 500 medium sized trees (23 local species) as well as 2,500 cascading plants and shrubs. Aside from regenerating local biodiversity, the vertical forest will provide about 25 tons of carbon absorption each year and about 60 kg of oxygen per day.

Inbuilt bioclimatic features help reduce energy and water consumption. When American architecture firm Perkins & Will designed the Shanghai Natural History Museum they saved 15% on energy consumption compared to a standard-design museum by including automated windows and skylights to naturally ventilate public areas and installing a geothermal heat pump which reduced heating needs by a staggering 86.2%.

On a more modest scale, a rundown cave house in Weinan, Shaanxi province, was renovated by architect Shi Yang of hyperSity who used the energy-efficient elements of traditional cave design (warm in winter, cool in summer) as the basis for his redesign. Shi preserved the existing arched walls and used rammed earth (mixing local clay and sand) for construction, redesigning the interior as a series of courtyard spaces and punching a circular glass light well in the northernmost area for additional natural light and ventilation.

Sustainable design was also the starting point for Beijing architectural firm OPEN’s new modular building system HEX-SYS. The award-winning project – a prototype of which was recently built in Guangzhou for developer Vanke – is composed of hexagonal units which can be disassembled and re-configured according to different site and programmatic needs. Light, industrialized, flexible, energy-efficient and reusable, HEX-SYS comes in three different unit types, each sitting lightly on the ground. A central column supports the funnel-shaped roof and collects rainwater at the same time.

SPA – Fashion Orientation

Now let’s return to our SPA industry. With the coming of the Internet Age and a boom in the “net star” economy, traditional SPA has undergone great changes. Nowadays more and more multiple and trendy packages are available at SPAs where innovative elements are combined together including beauty care, hairdressing, experiential retail, VR experience, private trainers for body shaping and yoga, and popular café and juice bars… In this way, SPA is creatively and closely connected to the lifestyle of modern young people.