As participants of the Global Spa Summit finalise their meeting schedules and begin making their way to New York to attend this second annual conference (taking place from May 18th to the 20th) at The Waldorf-Astoria, attendees are preparing to wrestle with laying the foundations for the future of the spa industry. It seems there are a several facts that must be considered when considering the future of the spa industry:

1. Operating a spa requires a skilled labour pool for which there is a shortage of trained practitioners.
2. Spa treatments are often considered a luxury item, which may be cut from the family budget in tighter times.
3. Assessing spa performance requires meaningful data. A highlight of this year’s Summit will be the presentation of the first-ever “Global Spa Economy” report, conducted by SRI International. The report will be the first major study to define the size and economic impact of the global spa industry.
4. The global spa industry continues to lack universal standards, which often makes service delivery inconsistent.

The industry has evolved to be a US$10 billion a year business in the United States alone. This growth has attracted returns-driven investors and spawned the creation of new brands, management companies, and consultants focused entirely on the sector. In certain instances medicinal and therapeutic aspects complement discretionary indulgences and beauty treatments in medi-spa concepts that represent a collision between the spa and healthcare sectors.

With so much change afoot in the global spa industry, what does the future hold? Each year, Spa Finder publishes its top 10 spa trends, with the most recent highlighted in this article. Given the uncertainty in the US economy, we believe this list of trends will change significantly in 2008, as discussed below:

• Stress reduction. Spa Finder noted Healthy Sleep therapy as a trend in 2007. With mounting financial pressures in this country, we believe anything to do with stress reduction will continue to influence spa operations for the next year or two.
• Retreats. Fewer individuals will be able to indulge themselves with longer retreats in the near-term as people tighten their purse strings. This may work in favour of better day spas.
• Medical Tourism - In search of affordable health. With ever-increasing medical costs in the United States and Europe, the trend of seeking out affordable healthcare the world over is likely to continue. Countries such as Thailand and India will likely continue to benefit. However, medical tourism in South Africa (home to organizations catering to this market) may start to wane, with political uncertainty mounting in that country.
• Spa Lifestyle Communities. The cancellation of the Canyon Ranch condominium property in downtown Chicago may signal the abatement of this trend for the time being in the United States. Individuals and investors are backing away from residential real estate due to over supply, declining values and lack of available financing at attractive rates.
• The Bottom Line. With the participation of more financial players in the sector, the bottom line will play an increasingly important role in the next year or two. With increasing competition and an abundance of new product having come on line recently and scheduled to open, we may see consolidation in the sector with those undertaking disciplined business practices emerging as the dominant forces. Those not implementing such practices and smaller operators may struggle to compete with these larger companies.
• Green. Green remains a major trend throughout the sector, with environmentally sensitive spas and non-toxic products finding a receptive market. As discussed hotel operators are now also catering to the green lodging sector.

In addition to these trends, we believe spas offering medi-spa treatments such as those that counteract the effects of aging and sun damage, as well as non-invasive medical-beauty treatments, will continue to perform well. On the flipside, salons that have also hung the “spa” sign on the door may struggle. However, true day spas offering superior service at a reasonable price are likely to perform better.

As a final thought, we believe the spa industry will continue to standardise and be increasingly dominated by branded products controlled by financially-motivated investors. This is likely to result in a loss of some of the soul the industry has historically prided itself on, which will be to the disappointment of long-time participants in the sector.

It will be interesting to see if the participants of the Spa Summit agree.

Interesting and related links:
This link provides some interesting history about the spa industry.