Introduction
The term spa still remains an ambiguous and somewhat unclear term, especially within the context of a business model. Nonetheless, mention of the term elicits connotations of health and wellness (Cohen & Bodeker 2008). The spa industry has gained a lot of popularity in recent years, thanks in large part to the contribution made by the mature market in the west. In addition, the industry has also embraced the concept of globalization and his has helped to increase its revenue. Like the other industries, the spa industry was also affected by the recent global recession that saw it take a 19 % drop in revenue.
Trends in the spa industry
The global spa industry is estimated to be worth $ 1.9 trillion. The spa market has already reached its maturity stage and in order to maintain growth, industry players need to consider other markets, such as India and China (Schack 2011).
The spa industry is divided into three customer segments. First, we have peripheral customers who are easy to please and price sensitive. They view spa services as a source of pleasure and beauty, as opposed to health and wellness. Secondly, there are the midlevel customers who are seeking massages, facials, and relaxation experience, as opposed to alternative medical treatments (Johnson & Redman 2008). These customers are less likely to seek unusual treatments. Finally, we have the core customers who are seeking health and wellness, and lifestyle. They are price insensitive and as such, they demand exceptional experience and services (Crebbin-Bailey, Harcup & Harrington 2005). Besides, they tend to have a lot of experience in the spa industry.
Men only spas constitutes 31% market share (Schack 2011). Services include male focused activities such as outdoor adventure, golf, and male cosmetic treatments. Young couples are on the lookout for mainly spa treatment. Because they are likely to have children, these couples need educative aspects on health and wealth.
Impact of globalization on the spa industry
Globalization has had a huge impact on the spa industry. For example, the recent global recession had a huge impact on the industry, resulting in a 19% drop in revenue (Tabacchi 2010). Even when hotels provided discounted rates in a bid to woe customers, this did little to improve the situation. The hospitality industry was forced to embark on a deep discounting strategy. In addition, the industry also launched E marketing services and aggressive PR. New products were also developed (for example, salt therapy) in an attempt to further extend the product line.
There has also been a change in the trend of the spa industry, with most businesses opting for franchising as a strategy to expand the market. This strategy is also intended to enhance overall consolidation of the industry. Globalization has also supported extensive branding of the spa industry, in effect strengthening economies. Thanks to globalization, we now have mobile applications and online spa services as well.
Conclusion
The recent globalization has dealt a heavy blow on the spa industry. Considering that the market in the west has attained maturity, there is the need to target other segments of the market as well. For example, the spa industry can decide to target the retired baby boomers with their disposable cash and time. Spas should therefore incorporate naturopaths, physiologist and orthopedics as part of their services in order to reach out to the aging population. Also, spa could consider incorporating home delivery services that targets the aging population. Players in the spa industry should also consider investing in India and China
This is an untapped market that also reflects emerging new class mobility (Tabacchi 2010). Online deals and mobile applications could also improve the market further.
Reference List
Cohen, M., & Bodeker, G., 2008. Understanding the Global Spa Industry : Spa Management. Oxford: Butterworth_Heinemann
Crebbin-Bailey, J., Harcup, J. W., & Harrington, J., 2005. The Spa Book: The Official Guide to Spa Therapy. Stamford, Mass: Cengage Learning.
Johnson, E., & Redman, B., 2008. SPA : A comprehensive Introduction. Michigan: AH & LEI.
Schack, E., 2011. Spa Business. Web.
Tabacchi, M. H., 2010. Current Research and Events in the Spa Industry. Cornell Hospitality Quarterly, Vol. 51, No. 1, pp. 102-117.