Printed from : LMD

10 Dec 2013

Balancing profit with reputation
   BY Liz Terry

This year's market research numbers have just been published for the US spa market, showing continuing signs of recovery. ISPA's 2013 US Spa Industry Study, PricewaterhouseCoopers (PwC), found the five main measures of trading: visits to spas, spend per visit, total revenues, staff levels and total number of spas, have experienced growth (see our report in Spa Business 2013 issue 4 page 48).

The PwC team found total revenues were up us$1.2bn – 4.7 per cent – to a healthy us$14bn (€10.1bn, £8.7bn) against a pre-recessionary peak of US$12.8bn (€9.3bn, £7.9bn).

As at May 2013, there were 19,960 spas in the US: an increase of 1.1 per cent over the previous year and a great deal healthier than 2009-10, when closures outpaced new locations for two years.

Hard on the heels of the ISPA report came Trends in the Hotel Spa Industry from PKF Consulting USA (PKF).The two reports make interesting reading – especially when considered together. This is especially true around the area of staffing.

The ISPA research found that although employment increased by 1.2 per cent – up a percentage point on the previous year – there was a "marked shift" from full-time employment – which declined by 7.2 per cent – to part time employment, which was up 13.2 per cent. PwC says this could be an indication of "wider changes in American working practices," or that it "reflects the spa industry's commitment to maintaining a flexible workforce."

The industry's approach to employment is highlighted by the PKF report, which found that while payroll expenses for hotel employees average 29.6 per cent, spa is running at 22.8 per cent – a whopping 6.8 per cent less. They attribute this to the fact that "many spa technicians work as independent contractors and therefore are not eligible to receive a full package of benefits."

The recession has given operators unusual freedom to re-engineer the employment terms of staff and they've done so in ways that enable them to gain many commercial advantages.

Although profitability is vital, if we're to build a reputation as a credible industry that offers good careers and practices what it preaches, we need to be mindful of the need to balance these two demands.

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