With the economy sinking further into a recession, Bay Area spas find themselves in hot water this holiday season. As the purse strings get pulled tighter, day, medical and resort spas must convince customers that their services - be it facials, massages, manicures or laser hair removal - are worth the expense.
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San Francisco is a particularly spa-heavy town. According to online reference site Spa, there is one spa for every 5,100 city residents, compared with one for every 15,300 in New York City, so local spas have been working hard to differentiate themselves from one another. Some have gotten creative with payment programs such as I-Spa and International Orange's membership drives, while others, like Spa Gaia in Napa and San Francisco's Epi Center, look to attract eco-savvy customers with their green buildings and practices. As befits the season, holiday discounts and open houses abound.
"Are we worried about the economy? Yes, we are," said Hina Muftiof, director of the InterContinental San Francisco I-Spa. She came up with the idea of a membership system - which works like that in a gym - to personalize services and keep clients returning. "The idea is to get people on a program and regimen - to take a holistic approach," she said, adding that the membership packages come in a variety of increments (three months, six months, a whole prepaid year) and "make an ideal gift for the holidays."
The spa industry had been booming through 2007. According to the International Spa Association, the number of spas in the United States has grown annually by 20 percent over the past eight years. One in 4 Americans has been to a spa, which makes sense, as Spa claims there are more spas in this country than there are Starbucks outlets.
Lynne McNees, president of the International Spa Association, likens the current economic situation to the post-9/11 era. "We thought, discretionary income will be down, people will stop going to spas because they consider it pampering," she said. "Well, people flocked to spas."
While there are no 2008 statistics out yet, McNees pointed to last month's survey of her association's members as proof that it wasn't doom and gloom for the spa industry: 89 percent of spa providers reported that their income was the same as or higher than last year.
McNees did note that even as 2007 saw a record number of spa visits, the average income generated from each visit was down. "(People) are spending less. It's like - 'I didn't eliminate my cable TV, but I reduced the package.' People are polishing the edges," she said.
Hospitality industry expert Paul Boger, an associate dean at the Conrad N. Hilton School of Hotel and Restaurant Management at the University of Houston, had a different perspective. His research shows that some spas are reporting that business is down by 40 percent. Those, he said, tend to be spas at resorts, which are more susceptible to changes in the economy as travelers forgo vacations or stay closer to home. He is in the midst of a nationwide study of 1,000 spas. His initial findings indicate that 12 percent of the spas have disconnected their telephone lines during the past two years.
"Many will have to change their business model to survive," Boger said via e-mail. "Spas will be built smaller, compensation for the employees will be adjusted, they will need to renegotiate their leases and become better business operators. Is being beautiful a necessity or a luxury? I am not sure if you can cut the two apart. Combining health while being pampered is probably the key."
SpasWorldwide said spas have also been making a huge effort during the past few years to move away from the idea of "luxury" and toward that of "wellness," a shift she thinks will serve spas in bad economic times. In the coming year, Ellis predicts that novelty treatments such as fish nibbling away dead skin on hands and feet and gold flakes embedded in facial creams will fall away in favor of "evidence-based" quasi-scientific services such as DNA analysis and vitamin customization. Even brain health will become a spa concern as spas compete to be seen more as a medical service than as an indulgence.
But of all the trends Ellis lists for 2009, specialization is the overwhelming theme. "Spas are interested in having a niche - and making it visible and unique," she said. For the Bay Area in particular, one of the most logical ways of doing this has been to promote sustainable, green, organic practices.
Epi Center, a med spa (i.e., it focuses on corrective treatments, such as its original Photofacial procedure and laser hair removal), has been a leader among green spas. Last year, the spa decided to move into a new suite in its longtime home at the historic 450 Sutter building, and in doing so, radically transformed its practice. Epi Center says it is the world's first LEED (Leadership in Energy and Environmental Design) gold-level certified spa.
"We really wanted to be the first to marry medical treatments with the organic, green concept," said Epi Center President Margaret Mitchell. The certification process was extremely rigorous, she said, and the building's historic status posed particular challenges for instituting eco-friendly heating and ventilation, among other things.
The employees might appear to reap more benefits from those steps than customers, but Mitchell said profits are up from the same time last year.
Another local establishment, Gaia Napa Valley Hotel and Spa, calls itself the "world's first and only" gold-level LEED-certified hotel. The spa itself doesn't have LEED certification, but it's a thoroughly green business.
"I think people buy into integrity, and when you have integrity of purpose, it shows," said Spa Gaia manager Kate Riley, who said that Spa Gaia uses only eco-sensitive, sustainably produced products, found ways to cut down on towel consumption, reduced energy consumption in saunas and even switched to organic uniforms with eco-friendly dyes. "The reason a lot of people come here is for that experience," she said.
Traditional attention-getting sales techniques also abound. In the holiday season, many spas focus on seasonal savings and heavily promote their gift certificates. San Francisco spa institution Kabuki Springs and Spa sent out an e-mail detailing its "first ever" discount of 10 percent off massage and 15 percent off body treatments weekdays through the end of the year.
International Orange offers a $40 discount to people who buy $300 gift certificates online. Spa, who said that surveys show that one-third of all spa customers got introduced to spas through a gift, anticipates a strong holiday season.
"Another one of the trends that fuels the spa industry is the challenges of the medical community. ... If people don't have insurance, they seek out alternative care," Ellis said.
But spa owners should take heart: Ellis says that spas could actually do better than many other industries in a recessionary economy.
"The spa industry has been fueled by a variety of trends, and increased stress is a huge trend," she said. "Even though the financial arena is turbulent, spas have been resilient. People might not fly to Europe for a spa experience, but people need to de-stress."
For freelance writer Justine Sharrock, 31, getting regular massages isn't a luxury - it's a way to cope with work-related carpal tunnel issues. But even the former San Francisco magazine spa reviewer is cutting back. "I went from going once a month to going once every four months," Sharrock said. "I'm trying to do other things, like physical therapy exercises, instead." In general, she says, she has been very judicious about spending any money on cosmetic goods or services. "I stopped dyeing my hair for a while."
Eventually, though, she said, she went back to the salon - "it was too depressing" not to.
