Thursday, August 26, 2010

Global Spa and Wellness Briefing Paper: Part 2

Last week, SpaBooker VP of Operations, Dan Chandre, explored the impact of the recent economic climate on the spa and wellness industry in the United States. Here, Dan looks further at some of the statistics and innovation in the industry.

What would you consider to be the most interesting statistic to come out of your region in the past 12 months?

The most intriguing, and at the same time troubling, statistic that has emerged in the US spa and wellness industry in the last year has been the overwhelming percentage of single item transactions. Looking at a sample size of over 800 operating spa locations, over 80% of the transactions that occurred over the past 12 months only contained one ticket item[1]. The implications of a statistic like this point directly to the much discussed economic situation and reveal two key conclusions.

First, spa and wellness organizations in the US are doing a poor job of up selling add-on services to compliment the primary treatment. Additionally, the overwhelming majority of the single item tickets are for only the treatment performed, meaning that spa and wellness facilities are not doing a sufficient job at adding retail items to tickets. The importance of a successful retail selling operation is well documented, and adding retail to less than 20% of treatment tickets is not a positive statistic.

Second, the high percentage of single item transactions reflects on consumer buying habits in the spa and wellness arena. Ultimately it is the consumer that makes the buying decision, and this statistic implies that the consumer, while still consuming to a degree, is focusing on the core of their spa and wellness experience and not purchasing peripheral items. The silver lining is that it leaves room for improvement once the consumer loosens the proverbial “purse strings”.

What innovative things have you seen in the spa and wellness arenas in your regions this year?

One innovative trend that we’ve seen in the spa and wellness arena in the US is the growing importance of offering online booking for spa services. As simple as it sounds, the spa and wellness industry has been well behind the rest of the hospitality arena when it comes to offering the convenience of online booking to their customers, and in kind, customer adoption of this method of booking. In Q1 of 2009 across all businesses offering online booking on the SpaBooker system, there was an average of 10 online bookings per month per spa. In Q1 of 2010, that number has jumped to 29 online bookings per month per spa[2]. That’s a 190% increase in the number of online bookings made per spa per month with online booking available.

And what have you done to innovate your own business recently?

Since SpaBooker is an online, SaaS (Software as a Service) tool for spa and wellness companies to manage their business, we’ve focused on helping these businesses more easily connect with the online consumer, and more specifically, the mobile online user. The first avenue we took was to develop the SpaFinder iPhone Application, which allows consumers to search for spas directly on their iPhone, and through integration with the SpaBooker Platform, actually book appointments in real-time. This is a revolutionary step forward for the spa and wellness industry as it brings the concept of real-time booking to the fingers of the world’s most technologically savvy individuals. Secondly, we have optimized the online booking engines of all of our clients to adapt to mobile devices and provide an easy-to-use booking platform for all of our partners. The significant innovation in this regard is that we’ve done the mobile adaptation on their behalf so the individual businesses don’t need to commit time and expensive resources to have it done.


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