A partnership that makes a spa profitable in the long run

AnnikaHeadShotOct 2014Annika Jackson is the Director of Business development at Raison d’Etre. Annika first joined the company in 2012 as Managing Director and have since this past year shifted her focus on client relations and development only. Prior to moving back to Sweden after 28 years abroad she was most recently the Vice President for Enchantment group and the Managing Director at Enchantment resort and Mii amo Spa, in Arizona based in the US.  In her role at Raison d’Etre she is working closely with new and existing clients and all potential new projects and developments. We caught Annika in between meetings and talked to her about the value for a spa and/or a hotel when partnering with a Spa management company, such as Raison d’Etre.

In reality, what does it mean for a spa to have a Management agreement with Raison d’Etre?

Annika: “Typically a hotel or a developer does not have the level of spa and wellness expertize needed so we bring in this crucial piece that entails spa operations, wellness services, training, nutrition and membership, to ensure that the spa will be profitable in the long run. Most effective is also when we are brought in early, at the planning stage so that we can from both a spa operator’s and consultant’s standpoint guide the architects and interior designers from the start. This avoids costly building mistakes and ensures a more effective operation and therefore profitable spa.”

Who is the typical client for a Management agreement?

Annika: “Most often we are approached by a developer who is embarking on a new hotel-, resort and spa project. Other times it is a freestanding spa and wellness facility, but in most cases connected to real estate component such as a luxury residential community, villas or condominiums in a high-end development. One good example is our (soon to be open) LivNordic Spa, at Cayan Towers in Dubai. The client gets both a spa brand, but also a professional spa operator. From a real estate perspective the spa brand adds value to the whole project and the developer do not have to worry about the spa operations.”

How can a client get the most out of a co-operation with a spa company such as Raison d’Etre?

Annika: – “In ideal cases we, as a spa company, are involved in the project from the start as mentioned above. The most successful projects are the ones were we are involved at the planning stage already. We can then guide the architects and interior designers, from a spa operations perspective, to create an effective spa. A spa which will be financially and environmentally sustainable in the long run. Often however, we are unfortunately asked on board a spa project at a later stage, where the construction already has taken place and it might be too late for major changes. It’s a bit frustrating when you see a lot of space that is wasted on areas that will never generate income or revenue. Normally we can of course still do many changes and improvements, even in later stages, but it will obviously be more complicated and can cost more.”

“I was recently on a vacation in Spain and I stayed in a brand new hotel. As I entered the spa, which was beautiful, I immediately noticed all the mistakes made and would guess that there was no professional spa consultant or operator involved and felt bad honestly for the owner. There were only a few treatment rooms (very few compared to size of hotel and the rest of the spa areas), but enormous wet areas, which will not generate revenue. I know this spa will not be able to succeed financially as it was not constructed in a smart way. I also noticed significant wet area upgrades such as an abundance of experience showers, waterfalls, whirlpools, saltwater pool “walk” of 10 meters which are all a huge investment and costly to run with almost no return. The staff was also not trained at all and guests were not guided thru a spa journey and even very basic things such as checking guests in, preparing them for spa services with robe and locker etc. was missed – the staff had no idea what to do or how to do the most basic things”.

Our job is often to be the “voice of reason” and to find that balance between facilities, the initial investment and we have a very scientific way of calculating guest usage, membership potential revenue and overall spa revenue and from there we go about recommending and creating the space planning and programming. Each spa opportunity is different and so it is extremely important to do the homework prior, planning and creating a concept and design that will ultimately produce the optimum programming and later return for the owners while serving the guests in the best way possible.

 So, what can a spa owner do if the spa is already open, but not working well at all? Can Raison d’Etre still do something?

Annika:  “Absolutely! We have a very successful SOS program (which stands for Spa Operational Support), where we do an in-depth audit and then by training and coaching of the spa manager we ensure quality improvements, and by that increasing the spa’s revenue and profit. Often we can also do quite a bit in reallocating some of the spa space to create a more efficient operation and higher revenues with higher guest satisfaction as well. Retail is also one area that is often missed and here we can always help and also create a whole new and additional profit center.

So in reality, what happens if a spa owner brings Raison d’Etre on board?

Annika:  “We start with assessing the spa and the spa management. If the spa manager continues in her or his role we will educate and coach him or her and thereafter we set up procedures and strategies to optimize the spa operations in every aspect. We recruit, educate and ensure that a spa manager has the necessary knowledge to continue to run the spa together with us. Sometimes we may add or reduce equipment, spa products and or services and programming – it all depends on how to set it all up for success and to create that return for the investors and fantastic experiences for the guests.

We have a structure for this type of work, where our own staff goes on site and educate and do trainings in everything from emotional hospitality to treatments, including massage and to training of reception staff. In our Management agreements we always have weekly meetings with the spa manager. We also set up a quality management system, which includes a certain number for audits and follow up trainings and coaching during a year. We set KPIs that we agree on with spa manger and owners and we are also involved and support the yearly budgeting process. If the spa is within a hotel we also include meetings with the hotel management, internal sales & marketing trainings and systems and anything else that will ensure a seamless operation with the hotel and increased revenues and profits”.

What are the advantages for a spa owner or hotel company to take on board a Spa management company such as Raison d’Etre?

Annika:  “Since the spa and wellness industry is such a specialized industry and field there are not many hotel- or hospitality management companies who have the in depth knowledge needed quite honestly. Spas are unique, compared to hotels, for example in that sense that staff spends so much time “one on one” with guests. Add the fact that it is by nature a very intimate and vulnerable experience also for people one has to truly understand these dynamics. The therapists and spa staff is key to a successful spa operation. You have to understand the importance of supporting the spa staff every day and this includes a very specialized training and leadership

We have that in-depth knowledge, experience and all the skillsets needed. Most often we are approached by developers who want a quality and full service spa in their projects, but don’t want to be responsible for the daily operations, then we are the perfect partner. When we are involved early in the process it is the best way to go about this. As Spa operators we are concerned about saving money for the developer in the construction phase, but also we are very keen on creating efficient spaces and use of the spa areas, to ensure a long-term profit for the spa. Since we also own and operate spa’s ourselves we understand the importance of long-term feasibility and are not just there to create a unique spa facility, we also want to ensure it is a profitable one, for everyone involved”!

For more information, contact Annika Jackson

annika@rdespas.com

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