The spa, that's you
Round Table led by Laure de Lattre, Beauty Congress in Lausanne, October 2006

 
The word "spa" seems to be on everyone's lips these days but very few people seem to know what it really means. One thing is obvious from the outset, though, and that is that spas are proving to be lucrative businesses. Whether it is a simple phenomenon or a case of true evolution.

So, where does one begin when opening a spa and, even more importantly, is the spa concept suited to you? Or perhaps more importantly, is your set-up suitable for the world of the spa? Here is what the spa experts had to say at a round table discussion held at the Beauty Congress in Lausanne in October last year:


• Marie-José Joly, Director of the Swiss beauty school Vio-Malherbe,
• Olivier Aron, Founder and Chairman of the Massage Academy, a school based in Paris that specialises in advising and training its clients within the spa and beauty industry on the subjects of marketing and sales associated with massage,
• Jean-Pierre Demeerlaere, Manager of DJP Spa Consulting, who has been involved in the creation of over 50 spas across the globe, from hotel spas to urban spas as well as spas on ships and in private homes. He manages his own spas and is a registered trainer in spa disciplines.

Definition of a Spa

MJJ: When one speaks about a spa, you immediately conjure up images of a place of relaxation, well-being and rejuvenation. This destination has evolved beyond the beauty salon. It is the future.

JPD: The term, "spa" has become a real junk yard. It is a word that has been in existence for a long time. Everyone has tried to assign their own definition to it and I don't agree with any of them. I am under the impression that these days, the spa is become a means of change, which can have a positive impact on your establishment provided that certain requirements are met. Be careful that you do not simply change the name of your establishment from "salon" to "spa". Be very cautious.

OA: The consumer's picture of a spa is a place of well-being and pleasure without necessarily incorporating water treatments.

The Boundaries of Spas and Beauty Salons

JPD: There are no real boundaries separating spas from other beauty establishments. As with all professions, we are subject to trends and certain things work better than others. I think that a traditional beauty establishment, like the Patricia Institute, for example, is a tad passé. It is each one's personal responsibility to evolve with the times. The spa could be the vehicle required to evolve. But to break into the spa world, one needs to create a new offering.

There is no real boundary separating spas from beauty salons.

OA: The difference between spas and beauty salons is signified by the shift in focus; we are moving away from looking good, which is the domain of the beauty salon, towards feeling good, which is the territory of the spa. As the services offered come to promise more in the way of well being rather than improving one's appearance, so the distinction of these two establishments becomes clearer.

MJJ: The difference between a spa and a traditional beauty salon is a movement away from the universe that occupies itself with looking good, which is the territory of the beauty salon, towards the universe that occupies itself with feeling good, which is spa territory.

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The Notion of Profitability

JPD: The essential component involved in the eventual metamorphosis from beauty salon to spa, is that of profitability. A beauty salon knows how to turn a profit, how many hours of treatments need to be booked in order to cover costs. As a general rule, when people think of a spa, they picture a hammam, baths and a Jacuzzi but those are not money makers!

OA: Don't forget that the bottom line of a salon or spa's profitability is governed by the sale of products. All the international experts are in agreement on this point: there is a golden number, which oscillates somewhere between 20 and 40% representing the sale of products and this guarantees the profitability of a spa. In a pure spa i.e. one that is not also a beauty spa, product sales account for closer to 10 to 20% as opposed to a beauty salon, where this figure sits at around 40%. The beauty salon model, therefore, already operates at a significant profit. It makes sense, therefore, to retain this sales potential. It is for this reason that the odds of making success are even more likely in your case. It is possible to gradually mould your establishment into a spa rather than undergo an overnight transformation, without knowing enough about the industry first. The person who does this puts himself at great financial risk by investing in some very costly changes.

MJJ: If you have decided that you would like to make the cross over to urban spa, the first thing you should do is NOT outlay exorbitant amounts of cash on new equipment but rather to put your hands to work. Your number one tool as a beauty therapist is your hands. It is the use of your hands, your massage techniques, the warm and welcoming manner in which you receive your clients and other small things which create a sense of well being and which will ensure the profitability of your establishment. To achieve that, you don't need to spend millions!

OA: I agree 250%! You already possess the fundamental qualities required for the success of a spa!

Spa Training

JPD: Specialised training is essential every time you offer a supplementary service.

OA: Like Jean-Pierre Demeerlaere, we are often called on to intervene as fire fighters, if you will, and the situations we come across are sometimes catastrophic. The worst is when people have invested too much and too quickly only to find that these apparatus are not what they were hoping. First and foremost, spa owners should invest in body treatments and training in massage techniques, which represents 70% of a spa's turnover.

MJJ: Your hands are what will earn you money and, as far as spa training is concerned, some schools are lagging behind. The reason: for a long time, spas have seemed a distant reality. We have spoken about them in the same way as a much anticipated holiday. It was not something immediately accessible to us. It is clear today, however, that the treatments forming the basis of the spa offering need to be incorporated into training because spas are appearing in more and more locations.

You and the Spa

JPD: You are the first to possess the know how to be able to open a spa and run it at a profit. These days, increasing numbers of people are opening their own spas in the hopes that they will make money simply because spas are the "in" thing! It often ends in disaster. The start up costs are often significant and you may be afraid to make that initial investment but you truly are in the best position to make a success of a spa business.

It is important that you remember the primary area where you will make money is in your facial treatment room. The secondary area where you will generate money is in your body treatment room. The reason for this is: the hourly rate, which should be around 80 euros per hour, will be approximately the same, whether you are charging for a facial or body treatment. But after an 80 euro facial treatment if you have taken the time to offer your client valuable advice on the products best suited to her skin, she will spend anywhere between 100 and 300 euros purchasing products from you. And that is when your hour becomes lucrative because the profit margins on product sales are significant. With a massage it is more difficult to promote product sales because the treatment doesn't really lend itself to home use products. People who open spas without any background in the beauty industry don't have an appreciation of these aspects. They decide to open a spa featuring a hammam, a tea bar or a tea garden but where does one make money on that? Nowhere! The use of the toweling gown, slippers, two or three towels, the electricity costs of running a hammam.... All of these have a cost attached to them which need to be factored into the profitability and feasibility study of your spa. And yet I am constantly confronted with examples of people who have opened spas that are magnificently decorated but which are failing dismally at turning a profit. It is a pipe dream pure and simple.

OA: If we liken it to a large retail chain: a massage treatment is like bottled mineral water. People will go to the store to buy mineral water but this is not where the retail store makes its money. Generating turnover by attracting to clients to your spa through massage treatments is a good thing, but your profit margins need to come from elsewhere.

Spas have a need for beauty therapists because of their skill set. Realistically speaking, a massage therapist cannot physically perform more than five hours of massage per day and yet, you are paying them for a full eight hour day. Therefore, ideally, you need to build in three hours of facial therapy per day so as to ensure that you are getting full value from your salaried employee. Spas therefore find beauty therapists desirable employees as they are qualified to administer both massages and facials and are thus a real asset..

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Flexibility at Every Level

JPD: Since the inception of spas, the key word is "flexibility". For starters, a multi-purpose treatment room is important because, even though it is a spa, at five o’clock in the afternoon everyone wants to come for a massage treatment whereas at nine in the morning, the place may be empty. It also means that all therapists need to be trained in the administration of massages in order to cope with the demand. All the equipment, the tables as well as the treatment rooms themselves must be multi-functional in order to be able to cope with the demand for massage therapy. Your client should be able to experience a facial treatment, balneotherapy and a massage treatment all within the same cubicle and performed by the same therapist. The ability of your staff to administer any and all of the treatments you offer is crucial and the therapists most likely to be able to perform these variable treatments are aestheticians, like yourselves!

OA: Within each discipline itself, i.e. within the discipline of body massages, your therapists need to be multi-skilled. You cannot have only one therapist skilled in the art of Californian massage, only one who can administer Shiatsu and a third whose speciality is Ayurvedic massage. All of your therapists need to be able to administer all the different types of treatments offered by your establishment. That is why we teach students all the different techniques when they study at the Massage Academy.

MJJ: Here, too, you are at an advantage because after having worked in a beauty salon, you are already aware of the fact that your treatment rooms need to double up as facial treatment rooms and massage treatment rooms.

From Beauty Salon to Spa... Taking Small Steps

JPD: You have already mastered the art of running a beauty salon. In order to understand what is involved in managing a spa, do not hesitate to seek out the advice of your old training college, the director of the school or a number of other qualified individuals who can assist you and steer you in the right direction. Do your homework and make sure that you only take calculated risks. Make sure that your investment is matched by return on investment. It is not a complicate formula to work out how much you need to spend to launch your spa and how you intend to cover these costs through the services offered by the spa. When thinking about opening your own spa, you should start with this formula. If you already operate a beauty salon, you will already have a turnover figure upon which to base your calculations. You will also have a projected figure of how much your turnover will increase should you make the transition to a spa. But is this figure realistic and achievable? Are there competitors in the vicinity who may try to lure your clientele away? Is there a big enough clientele in your area? What methods can you employ to attract new clients? In other words, what can be done to attract clients to your beauty spa who currently do not frequent a beauty salon?

The word "spa" resonates within the consumer's mind and conveys a number of important messages: it speaks of a concept that is modern, offers professional and ethical body treatments to both men and women equally. New clients will be enticed by the image projected by a spa as well as by the new ambiance created by your spa. When you go to the physio, you may be confronted with a faint scent of perspiration and an austere room with a simple towel on a bed. When you go to a beauty salon, the smell of depilatory wax may linger in the air. However, if you are running a spa, there can be no trace of these kinds of smells otherwise people will be turned off and will not return. Everything about the spa should exude discretion, warmth, sophistication... the ambiance is completely different.

The kind of clientele who wouldn't set foot in a beauty salon will be attracted by this kind of environment. And don't forget about the men! They will form an important part of your clientele in the years to come. They tend to be loyal and are willing to spend money without question as long as they feel they are receiving benefit from their treatments. On the other hand, as far as product sales are concerned, they need to be cajoled somewhat because they are not accustomed to using skincare products at home. But rest assured, once they get into the habit of using these products, they will become some of your best clients. Don't neglect this promising avenue of potential clients.

MJJ: If you already operate a beauty salon, you still have to invest in your establishment. If your aim is to slowly and subtly make the transformation to a spa, rather than invest in sophisticated equipment, spend the money improving your treatment rooms and focus more on massage and relaxation therapies. The initial investment required to open a beauty salon and a small spa is not that different.

OA: After completing your studies, you could start by opening a beauty establishment that focuses largely on body treatments. I have a firm belief in the birth of the third generation spa, which is the beauty spa. This spa combines under one roof treatments which can be offered to both men and women and also offers clients the option of beauty treatments. When you ask consumers to put a definition to the word "spa", they will often come up with something like, "A place of well-being that offers massages and often includes a hammam". Consider this: a treatment room, a shower, ultimately a cabinet de toilette and an accueil and voila, you have successfully opened your own spa! A spa does not have to take up a lot of floor space. There is a spa in Paris that consists of 40 square metres and the beauy therapist who owns it is making a fortune.

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The Spa, Just Another Fad?

OA: It's much more than just a fad or a trend. It is a deep seated desire, which was first fanned into flame along the coastline of California, in the United States some fifteen years ago. Today, it is the third largest industry in the leisure market in the United States, generating a turnover of some thirteen billion US dollars, which reflects an increase of 14% during the space of a year. The spa wave only hit Europe quite some time later but in spite of this delay, gained considerable momentum in a short space of time thanks to the hotel chains. In fact superior hotels with a rating of four stars, and even three star hotels, almost automatically included a spa in their offering to their guests. There are even plans underfoot to incorporate spas into two star hotels! The motivation is fairly simple: hotel chains noticed that their occupancy rate was effected by whether they had a spa or not. It was the same with the swimming pool in the eighties. In those years, guests would choose to stay at a hotel that had a swimming pool instead of one without a pool. Today guests prefer to stay at a hotel that has a spa, even if they do not make use of it. Hoteliers realized that spas generated a fairly small profit, but at least they did not operate at a loss, especially when compared with restaurant facilities. Part of a hotelier's job is to find ways of attracting clients to their establishment as opposed to someone else's as well as how to get clients to extend their stay at the hotel. Most hotels had large, often empty, basement areas as well as laundries. They have since closed down their laundry departments, outsourced the function to a third party and opened a spa in its place. The result has been a considerable increase in profitability for the hotel due to higher occupancy rates.

From Beauty Salon to Spa, with the Same Brands?

JPD: To keep up with the spa phenomenon, it appears that most cosmetic brands have launched a range of spa products. They are in most cases almost the same products packaged differently and with different names. In my opinion, it is not necessary to switch brands.

MJJ: It is all a question of marketing. If you have a spa, you need to have spa products on your shelves. It is true that most cosmetic companies have launched a spa range. It is up to you to decide which brand to offer your clients.

OA: What will distinguish your spa is the initial investment but also the ambiance, personal flavour and taste which make up your spa's identity. The cosmetic brand used in your spa adds to this ambiance and it is important, therefore, that this brand fits in with the overall look and feel of your establishment. Your spa should reflect your essence and who you are. When you put your heart and soul into your spa, you will achieve something that echoes your most beautiful dreams and the authenticity and sincerity of your offering will be evident to your clients. Don't try to turn your establishment into a Zen Spa at any cost, if that is not who you are. Turn your spa into something extraordinary and unique by adding touches that reflect your personality. One of our clients spent a holiday in Polynesia and when she decided to open her own spa, she created a strong Polynesian character within her establishment, which works very well.

JPD: Individual character is very important. Every spa, whether it be in a hotel or in the city, must be given its own personal identity to suit the environment within which it is situated. Some big brands have opened spas in luxurious locations. It is really just a publicity stunt because three quarters of them are not turning a profit!

MJJ: If you would like to you can sell mass market products, even if they are available from the perfume store just around the corner. The confident consultation and invaluable advice you offer your clients will make all the difference!

JPD: I agree 100%. I would also discourage you from stocking five or six different brands in your spa as that is too many. Instead, it would be advantageous for you to identify some exclusive brands that are not readily available at your corner store or in the big retail outlets. On the other hand, you may argue that the marketing of the brands found in retail outlets assists with the sale of these products. As a consultant, I need to keep a neutral opinion on this matter so it is up to you to decide what works best for you. If you are operating in a very prestigious location, I have had to recommend that spa owners stock certain brands purely because the clients they service will only use these brands. Let me use the example of a big spa in Lebanon with a floor space of 3000 square metres. I advised them to use a lower end brand, which delivers good results, in their treatment rooms, a brand with a slight Japanese flavour like Shiseido or Annayake and to cater for a more prestigious clientele, a well known French brand like Guerlain or Carita. As it turns out, the Lebanese importers of the brand put a cap on the price of the lower end brand, which effectively meant that the profit margin was only 30%. The owner of the spa decided he would prefer to stock a brand where he could put a 200% mark-up on the product rather than one where the mark-up was capped at 30%, which is quite understandable.

MJJ: There has always been a bit of a tightrope to walk between cosmetic brands and beauty salons, or spas. Without selling out to them, it is important to remember that you do have a need for these brands. It is never a clever idea to stock only one brand and give yourself the freedom to change brands if need be. Because if there is one thing that is inevitable in life, it is change. People change, they evolve and they want to inject new life into old routines. But whatever you do, remember that coherency should play an important role in your decision making.

OA: In terms of marketing, the spa offering may be broken down into the following three different models:
• Brand name spas born from brands like Nuxe, Caudalie or Cinq Mondes.
• Hotel spas, linked to a particular hotel chain, where there is lots of scope for expansion. These spas often underplay other cosmetic brands and shine the limelight on their house brand. An example is the Accor line used by the Accor spas. Other examples are the Shangri La Asie group and the Four Seasons USA group. Commercial cosmetic brands melt into the background while the hotel's signature line comes to the fore.
• Individual spas who have their own unique theme, such as "La Ferme de Ginette". If your concept merits its own identity, then don't name your spa "Sophie's Farm". It's YOUR place! Other brands need to fade into the background while the theme or overriding concept of your spa takes centre stage.

Now, whether you have one brand or more than one, my only recommendation is that you don't have too many because if you do, you may spread yourselves too thin and never really receive strong support from any one brand.

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Basic Advice before Opening a Spa

JPD: Do a forecast for your proposed business. Everyone makes this mistake. Everything else is ready, except for the cash flow forecast. And it's quite simply really; the people who neglect this crucial step end up facing disaster. As a consultant, I turn down more than half of the urban spa proposals sent to me for review. I advise these people to can the project. Those who seek out advice from a consultant understand the importance of a professional opinion. They are not afraid to invest. They arrive with their proposal but when I show them that X + Y is not going to earn them any money, I do not take the job. And it is not a question of size. You can earn good money from a small spa just as much as you can from a large spa. But, whatever the project entails, if there is too large a gap between the investment and the spa's capacity to generate a profit, it cannot work. Always take the number of treatment rooms into consideration. You have built ten treatment rooms but you only have three therapists. So why build ten when four would suffice? You need to respect these basic business principles in order to establish a profitable spa. I think too often people are living in fantasy world. They have dreamed of opening a beautiful spa and done their homework about how it should look and what décor to use but they haven't done a profitability or feasibility study. I am faced with the same problem in the hotels. Imagine a spa that covers 3000 square metres and incorporates eight treatment rooms. Think for a minute about the cost outfitting 3000 square metres with basins, changing rooms, fruit juice bars, tea gardens... it all looks very pretty but it is definitely not profitable! Do a quick calculation: eight treatment rooms x eight hours per day (and it is rare that these cubicles are used for a full eight hours every day!), that gives you a maximum potential usage of 64 hours of treatments per day at an average of 80 euros per hour. Now you will be able to calculate your maximum daily turnover. Now work out 60% of this figure (and, believe me, if you manage to achieve 60% occupancy in your spa, it's good) and now you will have an indication of your potential daily turnover. No matter what the business is, the one thing we do know in advance is what the expenses are going to be. As far as the exact numbers are concerned, it is always an estimate. Working out your expenses is not complicated. They will include: salaries, rent, advertisement costs, electricity, water... and once you have done the maths you will come out with a number. Often when you calculate this number, you will be surprised.

OA: Never forget this basic rule of marketing: the closer you are to your product and the greater your productivity, the better your return on investment. Think of a spa like a perfume. You need to begin with the essence. If you only have one euro to spend, spend it developing your product offering: with a perfume, this means focusing on the scent and with a spa, it means concentrating on the services you offer. Start building your spa from the centre, the heart of the establishment: What treatments will be offered? Who will administer them? What training do your therapists need to have? Paradoxically, it is this area of development which will cost you the least but which will yield the greatest return on your investment. After that, comes the treatment room, which is like the perfume bottle encapsulating the scent. The rest of your salon or spa is your universe and the shop window symbolizes your communication with the rest of the world. Whatever you do, do not start with the décor. I have lost count of the number of spas who have invested 90% of their budget in the décor but who do not have a single qualified massage therapist and have not spent a cent on training. Clearly this route will only lead to one thing - bankruptcy!

MJJ: Have a clear picture of exactly what you want to do and what you would like to offer. Training is an indispensable part of developing a spa. Think about consulting a specialist, especially with regards to the management of your spa. A spa is a business that is seldom built alone so it is vital to make sure that you have surrounded yourself with good people and have sought out the necessary advice. Those who try to make a go of it by using one friend to help out with the accounts and another to do a few of the treatments...It ends disastrously!

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The Qualities of a Spa Manager

JPD: If you think you may like to become a spa manager, I would really like to encourage you to consider it because there is a genuine shortage of suitable spa managers. And working as a spa manager is a golden job: a spa manager starts on a salary of 3000 euros per month, net, without taking food and lodging into account. You must be fairly fluent in English and you will need to have a good technical understanding of all the treatment procedures. You will need to learn everything to do with receiving guests, taking reservations, managing schedules etc and this is often not something that is taught at beauty school. If the manager of a spa is not a beautician, she is often a hotel reception manager. These young women possess the relevant training: they speak a number of languages, know how to answer the phone, manage schedules, book appointments and issue receipts. On the other hand, they lack knowledge relating to the beauty profession. They cannot be called on to administer treatments but they can learn what is involved in these treatments and how they are performed so that they are able to explain them to others. This is the route that a number of spas have gone - fairly successfully I might add. But I would prefer to see you filling these positions first as it is after all within your domain. So what are you waiting for - get moving!

OA: The ideal spa manager should have been trained in four different areas: firstly, in hotel school management, secondly in business, thirdly in beauty school practices and finally in massage therapy.

MJJ: In Lausanne, we have an excellent hotel school that has established a spa department which teaches spa management. It is a compulsory part of their training because, these days, a five star hotel will always include a spa! But sometimes hoteliers find themselves in a difficult position: the spa manager is an excellent manager but they lack the finesse and technical understanding of the treatments. So they are looking to you, the therapist, to help them. You have many desirable attributes so it is up to you to pursue a career in this industry if you choose.

Be aware that an ability to communicate in English is a highly sought after quality in the hotels spas. A word of advice before you launch a spa business of your own, get as much experience in the industry as possible and see how things are done elsewhere. He more you learn about how other spas conduct their business, the better placed you will be to bring something novel to your own spa. To any students who want to start their own spas, I urge them strongly to consider working in other spas across the world to gain experience and knowledge.

JPD: If your goal is to work in a hotel spa then English is clearly an indispensable tool. In urban spas located within big cities, the potential to attract international clients is such that it would be well worth your while to be able to speak English in order to achieve this. Obviously, if you plan to open a spa in a small provincial town where you will only be targeting local inhabitants, it is not essential.

The spa industry is a real plus for you as it opens a whole new set of doors. The evolution of the beauty salon is a reality now. If you decide to follow a new direction, the spa will offer you new opportunities such as increasing your potential turnover and improving your overall lifestyle. Pursuing a career in the spa industry would definitely be a good move for you.

Some Things to Reflect On...

JPD: You were born to take your place in the spa industry! There are treatment techniques that have been adapted for use in spas - make sure you keep up to date with these developments. The profession is well structured now and there are a number of people offering the relevant training as well as professional spa consultants who are available to assist and advise you. Don't close yourself off to exploring the possibilities and don't struggle along on your own. These days it seems like you need to have a big opening launch if you want to make a success of your business. But your should remember one important thing: never be envious and/or discouraged when you look at the big, flashy spas popping up all over the place. These are often owned by financiers who have made investments with long-term goals in mind. Don't be fooled into believing that just because they look impressive and have a beautiful shop front, that they are making money. The majority of them are not, they are operating at a loss. For you this is not an option because you are investing your own hard-earned cash or money borrowed from your family and mistakes are not permissible so make sure you prepare every detail with absolute scrutiny. You are also working from existing capital and that is your existing client base. You already have clients so be in touch with them to let them know about the additional services you will adding to your existing range of treatments. They already have confidence in your services and that is a big plus!

OA: Think "return on investment"! Every time you make a decision about the extension of your existing establishment, ask yourself what you need to put in to achieve this change and how quickly these costs will be recouped. This is the best way to ensure that you do not over-extend yourself. Always remember that you represent one of the only professions, along with hotel management, that possess the necessary skills and knowledge to make a success of this..

MJJ: Don't transform your beauty salon into a spa based on a whim. Think long and hard about this and ask yourself whether it will be worth it in the long run. Ask yourself whether you want to open a spa because everyone else is doing it and you don't want to miss out on the big trend of the moment or is it what you would really like to do? Will your existing clientele follow you? Give this decision the serious consideration it deserves before you go ahead.

Good luck with your spa adventure because as we have reiterated, the world of the spa is just waiting for you!
 

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