CAMILLE HOHEB - Spas of North America

Spas of North America A COMPREHENSIVE REVIEW: STATS, CONSUMER PROFILE & TRENDS

CAMILLE HOHEB M.S., HEALTHCARE ADMINISTRATION BUSINESS ADVISOR & SPA TRAVEL WRITER WWW.GLOBALSPAANDWELLNESS.COM

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Industry Highlights: Spa Composition in the U.S. (2010) Day spas: 16,300 /79.0% Slight decline - 79.5% in 2009 Resort/hotel spas: 1,810/8.8% Medical Spas 1,790/ (8.7%), marginally below the # of resort/hotel spas.

Other :club, mineral springs & destination Source: ISPA 2010 US Spa Industry Report

Highlights: Revenue Composition & Visits Treatment

Retail

• 4 service categories

! Retail accounts for 12%

• Massage/bodywork

of spa revenue ! Skin & hair care products account for the majority of spending typically.

account for 78% total revenue • Skin

care • Hair Nails

1:10 spas - fitness or 143 million client visits in 2009 sports services • Wellness – offered by 17% of spas •

Source: ISPA 2010 US Spa Industry Report

Industry Highlights: Services & Products Primary

“New Trend”

! 143 million client visits

Wellness Programs

in 2009 ! Wellness programs,

Primary Treatments ! Massage services (86%) ! Salon services (68%) ! Skincare - facials, scrubs and wraps (9%)

including weight management and healthy eating, are offered by 17% of spas; ! 1:10 spas offer fitness or sports services.

Highlights: People Employee/Staff

! The spa industry

employed more than 330,000 people during the spring of 2010 ! 89% of spas provide a range of benefits to employees.

Consumer ! 1:4 -been to a spa ! 32 million active spa-goers ! Mostly female clientele ! Average age - 44 ! Actively seeking to diversify

client base ! 45% targeted men ! Customers spent an average of $75 a service Source: ISPA 2010 US Spa Industry Report

Highlights: Location & Square Footage Where & How Much

! The largest

concentration of spas are in the Northeast (24%) and Southwest (23%). ! 76 million-square-feet of indoor space

How Space is Used ! 2:3 have massage-only

treatment rooms ! 71% contain skin care-only rooms ! 4:10 spas contain hair styling stations ! 1:2 contain makeup stations ! Mani/pedi stations in 85% of resort/hotel spas & 65% of day spas.

Source: ISPA 2010 US Spa Industry Report

US Spas Managed the Recession by: “Big Five” Indicators

1. Revenue 2. Visits 3. Locations 4. Square

footage 5. Staff

Reshaped their workforce: ! Less hours, independent contractors, rental space, etc Identifying new ways to remain competitive: ! 75% introduced shorter treatments (30 minutes or less) to provide a less expensive option for clients with busy schedules. ! Adding wellness services Source: ISPA 2010 US Spa Industry Report

The Worst Economic Downturn since 1930’s‌ Annual revenues fell by 15 % Stark contrast to double digit growth the 10 yrs prior US Spa market worth $16bn Will remain stagnant until 2012 (Source: Diagonal Reports)

Impact of the Recession

US- Healthcare Model US $2 Trillion

5% Prevention

95% Treatment of Disease

“Alternative Medicine is Mainstream", Wall Street Journal, Jan 2009

75% of America’s healthcare costs result from chronic conditions that can be prevented or controlled

Condition

Lost Productivity

Cardiovascular disease & stroke

$143 billion

Smoking

$80 billion

Obesity

$56 billion

Diabetes

$40 billion Source: Kaiser Permanent Thrive 2009

Harmony in mental, physical, spiritual health with a desire to live a healthy lifestyle and actively protecting one’s health

What is Wellness?

_________ The ability to perform family, work and community roles and ability to deal with social, biological , psychological stress WHO, 1984

Wellness Institute

More Interpretations of Wellness

Wellness is a dynamic concept comprised of an interrelated set of dimensions including emotional, environmental, financial, intellectual, occupational, physical, social, and spiritual factors. Wellness is an active, lifelong process that involves expanding knowledge, skills, values, practices, and supportive environments that increase one’s ability to enjoy a balanced and fulfilling life.!

University of California at San Diego

A Shift and Re-orientation to Wellness

Current Conventional Healthcare To solve Problems

Integrative Health To Improve the Quality of Life

• • • •

• Proactive • Health-oriented • Whole person approach • Identify Risk & Minimize it • Partnership –based • Lifelong planning

Disease-oriented Reactive Sporadic Find it & Fix it

Workplace Wellness To Improve Morale, Productivity, Reduce Claims & Work Injuries

American Culture & Lifestyle ! The affluent are leaders in

extreme exercise. ! 12% of Americans who exercise do so 5 x’s/wk ! 44% earn over US$75,000 Source: NIH survey/ 2008.

! The importance of exercise

& the obesity epidemic are seen in popularity of fitness television shows and health oriented shows, such as ! !

! Interest in adventure

racing has grown significantly. ! 2009 - 194 races, up from 11 in 1998 Source: US Adventure Racing Association.

! !

The Biggest Loser Dr. Oz Jamie Oliver’s Food Revolution The Biggest Race

Marketing Wellness to Baby-boomers What We Want • • • • •

Consumer Expectations Authentic healing traditions Natural, indigenous ingredients Social responsibility Support of ecology/ sustainability • More savvy • Demand high quality experience • Spas are returning to historical origin Prime market

What We Need Baby-boomers: • 6:10 will manage 1+ chronic condition • By 2030 half of Americans will be 50+ • Projected 8x more knee replacements by the year 2030 Men: 2010 9% of cosmetic procedures Nose reshaping, eyelid surgery & lipo Botox, laser hair & microderm Motivation – divorce/dating

What Changes Have You Made in the Past 5 Years in Response to the Wellness Trend?

Source: SRI –GSS 2010

Spa, Health and Wellness Models Current Models ! ! ! ! ! ! ! ! ! !

Day spas w/ wellness Medical aesthetic spas Hotels w/wellness & medical Destination resorts w/medical programs Destination resorts w/wellness Hospital w/spa services & Hotel Spa Alliances Anti-aging spas Medical, Health, Wellness & Spa Tourism Wellness Communities

Convergence & Transitions ! From sick care to optimal

wellness ! Hybrids, lifestyle mgmt & integrative health ! Demand for nurturing, healing environments ! New approach to architectural design ! Interest in cultural, traditional, indigenous healing

Spa, Health & Wellness Integration Models Hotels w/ Medical

Resorts w/ Medical

Marketing to the Younger Population

Infertility

Sleep

Stress

Weight Loss

Life Balance

Cosmetic

US Spas Response to Wellness

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2.

3.

4.

5.

6.

7.

Adding services that address specific health concerns Alignment opportunities: providers & causes Partner with med, health & wellness tourism industry Using clinical studies to market Delivering exec. health services & workplace wellness Importing healing traditions Expanding scope of service and market reach Cumulative Effect Growing role of spas in day to day well-being

Alignment Opportunities

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Partnering with medical providers • Deliver continuity of care & integrated healing.

• i.e., Cancer patients, Fertility, Addiction Med • Spa/beauty treatments for ill patients.

• Subcontracting, Feeder to spa facility

Supporting associations and causes Heart Spa Project

Involvement in research studies

Beth Israel Medical Center Continuum Center for Health & Healing Massage Reflexology Reiki Cranio-sacral Acupressure Lymphatic Meditation

Mind Body Medical Institute of Harvard Univ.

Center for Women’s Health Hackensack University Medical Center Beyond Day Spa

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Aligning with med, health & wellness tourism • Create complementary services: • Pre-op • Post-op • Recovery phases • Companion travel

US Consumer Choices & Medical Tourism Individuals want greater

control over health and medical care.

High-deductible plans, & higher co-pays prompt

patients to act

more like consumers.

Employers, health plans and policy-makers recognize the importance of patient engagement to reduce healthcare costs .

Health plans – offering resources & incentives for patients to take a more active role in their care to reduce cost, help engage patients in their own heath decisions.

Internet -information about conditions, diagnostic results, and treatment options.

Factors Fueling Wellness Tourism

! Escape from work, stress & every day life ! Increase in work hours leading to isolation ! Breakdown of social interaction vs. virtual

communities ! Need, desire, interest to improve one’s self ! Specific, goal-oriented programs ! Travel to beautiful places to rest ! Spiritual guidance, counseling or quest

Spa Tourism – Canada Uniquely Canadian Wellness Experiences “Canada – Keep Exploring”

Unique Experiences

! Indigenous ingredients ! Rosehip oil - British Columbia Commission ! Maple syrup - Ontario & ! Spas best aligned to the Quebec national tourism brand. ! Sea salts mined in ! Sought to integrate spa assets Saskatchewan ! domestic & global marketing ! Glacial clay, seaweed wraps efforts. &lavender from the Pacific west coast ! 57 spas selected, in 8 of 10 ! Vino-therapy: grape products provinces.

Niagara

! Canadian Tourism

Source: Spas of America

All aboard! Take a seat on the ‘Route to Well-being’ Spa hop on VIA Rail’s Ontario-area train with 18 pampering stops

Videos: Ancient Cedars Spa at Wickaninnish Inn http:// www.youtube.com/ watch? v=VGXH6NKsnVM Rest & Relaxation http:// www.youtube.com/ watch? v=xfHHn60E5_M

Spa Tourism Canada Uniquely Canadian Wellness Experiences Canada – “Keep Exploring”

! Canadian Tourism

Commission

Sought to integrate spa assets ! Domestic/International ! “Best in class” – aligned with national tourism brand ! Selected 57 spas: 8/10 provinces !

Indigenous Ingredients

! Canadian specific ! Rosehip oil – British Columbia ! Maple syrup – Quebec ! Sea salt mined in Sasktachewan ! Glacial clay, seaweed wraps & lavender from Pacific west coast ! Vino-therapy: grapes from Niagra

New Trend…

Spurning luxury & excess Pushing to the extreme.

Want challenging, results-oriented experiences to improve well-being Extreme fitness junkies & biz execs

Wellness Tourism in America Stressed out consumers seeking boot camps, hiking, adventure…

Example: The Ranch at Live Oak Malibu (www.theranchmalibu.com) ! US$5,600 per week ! Targets exes, celebrities & moms ! 10 hours of daily exercise, including hiking, yoga & weight training. ! Guests are attracted by the ability to shed 5% of their body fat

Predictions on Deprivation Holidays Increase in tough fitness programs -seekers of physically and mentally transformative experiences.

Opportunity for harsh climates & rugged terrain to develop into unusual destinations.

Potential for strong niche globally -consumers driven rising healthcare costs & obesity.

Growing interest in fitness is expected to develop philanthropic and green Consumers want to improve themselves and the environment.

Source: Global Trends Report - Euromonitor International, 2010

Health Promotion: Educate via Clinical Data

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Use existing data & clinical studies to market spa services through education •  Explore ways for individual spas to get involved and support specific research studies.

Growing Interest in CAM

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Greater Interest, More Potential

CAM use greater among adults: • Women (42.8 percent, compared to men 33.5 percent) • Those aged 30-69 (30-39 years: 39.6 percent, 40-49 years: 40.1 percent, 50-59 years: 44.1 percent, 60-69 years: 41.0 percent) • Higher levels of education (Masters, doctorate or professional: 55.4 percent) • Those who were not poor (poor: 28.9 percent, near poor: 30.9 percent, not poor: 43.3 percent) • Those living in the West (44.6 percent) • Those who have quit smoking (48.1 percent) NIH, 2007

Protecting Corporate Assets

5

Tapping Into Employee Wellness

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Stress in the Workplace

25% of employees view their jobs as the #1 stressor in their lives.

--Northwestern National Life 75% of employees believe the worker has more on-the-job stress than a generation ago.

--Princeton Survey Research Associates Problems at work are more strongly associated with health complaints than are any other life stressor--more so than even financial problems or family problems.

--St. Paul Fire and Marine Insurance Co.

Job Stress & Health: Studies Suggest!

Cardiovascular Disease Increase cardiovascular disease risk.

Relaxation - # 1 reason to spa

Musculoskeletal Disorders Increases the risk for developing back & upper-extremity disorders.

Psychological Disorders Mental health problems (depression & burnout) Workplace Injury Decrease safe work practices & increase injuries Suicide, Cancer, Ulcers, and Impaired Immune Function The link between stressful working conditions and these health problems.

(Encyclopedia of Occupational Safety and Health)

By 2020 top 5 disease conditions share underlying factor of stress (who.int)

Where are the Opportunities?

(Corporate Health & Wellness)

• • • • • • • • •

Insurance companies Government agencies Executives Human Resource Professionals Benefit Specialists Self-insured companies Corporations Meeting planners Incentive Travel Professionals

Executive Physicals

Concierge Services

Incentive and Awards

Pre and post conference services Corporate Wellness Programs

Future work comp?

Travel Trends for USA ! N.American planners less likely

to postpone/cancel or rebook ! Optimism in meeting volume ! No longer concerned about negative publicity re: luxury properties/destinations

Source: EIBTM Global Industry Trends and Market Share Report

Incentive Travel: ! Market recovered slightly in 2010 – but less than the meetings sector ! Incentives now well defined ROI ! Avg # of nights/trip has fallen from 6.5 to 4 ! Trips -less extravagant ! Primarily domestic or shorter haul international ! Business to economy class ! Every meeting now includes a business element e.g. discussions about corporate strategy & direction

Traditional/culturally-based therapies

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Opportunities to Widen the Scope of Delivery

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Scooops Kid Spa Geared towards children ages 4 to 15 Ice-cream themed manicures, pedicures and hair treatments The Mall of America 40 million visitors each year Great Wolf Lodge Resorts is North America s largest family of indoor water park resorts owning Scooops

Scooops Kid Spa Opens in Mall Of America â&#x20AC;&#x201C; largest retail complex in the US

(4)1.5-HR PSYCHOTHERAPY GROUPS (1) 1 HR REIKI SESSION/ WEEK (1) 1 HR MEDICAL MASSAGE SESSION (1)1HRACUPUNCTURE SESSION (4) 1 HR MOVEMENT THERAPY GROUPS (4) 1HRR ART THERAPY GROUPS (4)"-HR MEDITATION GROUPS (1)1"-HR LIFESTYLE EDUC. GROUP (5)"-HR POWER WALKS (2) 2 HR WATER POLO SESSIONS (4) 1" HR PHYSICAL TRAINING (1) 4 HR THERAPEUTIC OUTING 1 - 20 MIN. MED. MANAGEMENT APPT EVERY 2 WEEKS

Warrior Resilience Program Schedule

Red Door Spa Holdings

Top Spa Operators in North America

Hyatt Hotels & Resorts Four Seasons Hotels Starwood Hotels & Resorts Worldwide Hilton Hotels Corp World Headquarters Spa Chakra Marriott International Fairmont Raffles Hotel International Others: Canyon Ranch, Miraval, Noble House, Omni Hotels, Wyndham International

Green & sustainable practices Operational efficiencies Lowering operating costs Big expansion plans

Observations on Marketing Internet & Social Media Web searches: wellness (516,000,000) wellness + spa (5,000,000) wellness + trends (1298,000) wellness travel (42,300,000)

Observations on Marketing Help consumers find the solution to health conditions • Lifestyle management programs • Evidence based therapies Emotional triggers in marketing Packaging & pricing: • Bundled for better value • Loyalty programs/memberships – “Belonging” • Shorter treatment times/longer treatments • Social Media

2009 US Resident Travel to Europe Report

2009 US Resident Travel to Europe

2009 US Resident to Europe Report

US Commerce Department Office of Travel & Tourism Industries

2009 US Resident Travel to Europe

Thank You

To participate in industry surveys, networking or for more information, please contact: Camille Hoheb M.S, Healthcare Administration Business Advisor & Spa/Wellness Travel Writer Global Spa and Wellness www.twitter.com/camillehoheb www.globalspaandwellness.com Skype: camille.hoheb camille@globalspaandwellness.com