Spa Business Model Series : #1 Self Manage

Spa Business Model Series : #1 Self Manage

It still amazes me today, even after the 20+ years of this hotel spa industry, how many hotel owners or general managers seem to have no idea of what their options are when it comes to operating a spa in their property. The most common belief is that they have two options – either operate it themselves or rent the space to an outside operator to run the spa. This is a good starting point, but there are other possibilities worth considering. At the very least, if you are that owner or general manager, you need to be sure that you have thought through the pros and cons of the different business models available to you.

In this section we will take a look at five basic business models – Self Manage, Management Company, Product House, Spa Consultant and Rent the Space. Chances are most hotel managers and owners will find that one of these models can work for them. Maybe a hybrid model that combines elements of one or more of these models is the best answer for your spa.

The most  obvious option for a hotel looking to add a spa to its service offerings would be to simply manage the spa themselves. Go ahead and hire a spa manager and some therapists and you are good to go. Just like any other department in the hotel.

But while hotel managers are often happy to take responsibility for any other department in their hotel, regardless of their specific skills or experience, when it comes to spa, more often than not, they throw their arms in the air and call for help.

I still consider myself a hotelier by trade, having spent the first half of my working life directly in the hotel business. My second act has been involved with spas that operate inside hotels. As a former hotelier, I find this instant submission a fascinating phenomenon. In the old days, the path to becoming a hotel general manager was via either the rooms division or food & beverage. In more recent years, alternate paths have been found via sales and marketing or finance. Regardless of how they make their way to the top post, I know of no general manager today who would be considered an expert in all functional areas of the hotel they oversee. Just look at the title they hold – general manager. By definition, they are a generalist.

I will never forget the interview I had with the Managing Director (MD) of a hotel company I had applied to for my first General Manager’s (GM) job. He had been a Four Seasons general manager for many years and knew the business. I was the resort manager for a high-end boutique property, so I was probably a reasonably qualified candidate but it is always a big step from Number 2 to Number 1. As the interview progressed, the MD was suitably impressed with my CV and we seemed to be communicating well. Then, he hit me with his biggest concern – I was a ‘rooms guy’. I had taken the rooms division path and had limited experience in food & beverage. How could I possibly be the general manager of a hotel without significant food & beverage experience?

My response was that that my job, as general manager, would be to oversee the technical experts, otherwise known as department heads. My job, I said, was to manage people, systems and processes to deliver a complete experience to our guests. I got the job. So why, then, does this same generalist theory not hold true when it comes to spa?

The benefits of the self-managed option are total control of the entire spa experience from start to finish and full control of the financials. Many hotel managers and owners also like the idea of running the spa so they can use it for service recovery. If a hotel guest is unhappy with their meal, give them a free spa treatment. Too much noise from those conference guests hanging out at the pool last night? A free massage will make it all better. So, given the added flexibility of self-managing the spa, why doesn’t every hotel choose this path?

The single biggest reason hotels prefer not to manage the spa themselves, is the difficulty in identifying, hiring, managing and retaining good quality spa people, especially spa managers. Unlike a Restaurant Manager or a Front OfficeManager (FOM), there simply are not as many quality spa managers out there to choose from. Just ask any hotel GM what he looks for when hiring a spa manager.The response is more often than not, “I do not really know.” Ask that same GM what he is looking for in an FOM hire, he can probably tell you what hotel school he looks for, what brands of hotels, if not the specific hotels themselves, that the candidate should have worked for, what PMS (PropertyManagement System) they need to have experience with, how many years of management experience they should have, etc.

With the possible exception of the academic qualifications, there is really no reason that the same basic criteria cannot easily be applied to the search for a spa manager too. If a candidate has managed a spa at a similar quality hotel, that is in some way a confirmation that they should be able to manage your spa. Spa software systems are many and varied, but in this day and age, adapting to new products or versions really should not be too much of a problem for any reasonable spa manager candidate.

Unfortunately, to date there are very few academic institutions that have managed to establish themselves as producers of high quality spa managers. For the most part, spa management courses have been introduced under the purview of hotel management schools. In many ways this makes perfect sense. But the main focus of these schools is always the hotel programme, so the spa programme often is seen as a niche elective, rather than a core element. The alternative to these hotel school spa manager courses is independent courses run by spa consultants or spa therapist training academies. As you can imagine, the quality of these courses can run the gamut from very good to very, very average.

So, for our hotel GM, looking for a good spa manager so he can operate his own spa, the landscape is confusing. As a result, the recruitment process tends to focus on past work experience. I am a big believer in practical over theoretical anyway and I always defer to work and life experience over academic achievements.

The same holds true when it comes to recruiting spa therapists, to a degree. Experience is what matters. Still, we need to be mindful that a massage therapist does need to understand at least basic anatomy and physiology. Of course, that does not necessarily require a formal education either. I have met many great therapists who have an in-depth knowledge of the body, but would probably fail the test at a college. However, unless the GM or the Human Resources Manager are able to interview and test for this knowledge themselves, which of course most cannot, they will need to defer to some form of reputable certification.

Another deterrent to hotel managers running their own spas is the overall lack of understanding they have of the spa industry. Many perceive it as a trend-driven, or worse still, a fad- driven business. How will we ever be able to keep pace with all the latest developments in treatments, products and equipment, they ask themselves? We could question the accuracy of this perception, but it still exists and that in itself has created a barrier to entry. We in the spa industry have done a great job of making our world seem somewhat mystical and intangible.

At the same time, spas have become a staple facility for any 4 star or 5 star hotel. The end result is the hotels need us. The problem is they often do not understand us. Thus, despite the benefits of control that they would get in managing their own spa, many hotels prefer to find another solution. Coming to this realisation is only the first step. Now the challenge is finding the right alternative solution to fit their specific needs.

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