The hotel spa industry has had a good run but now may be facing the inevitable – a drop in usage as even its affluent clients start to monitor their personal expenses more closely.

“During challenging times like these, the spa industry has the potential to be buoyant,” notes Bruce Baltin, senior vice president in the Los Angeles office of PKF Consulting.

“However, it is not invincible. The dynamics of the spa industry enable it to persevere longer than other industries for several reasons.” 

“A large portion of its consumers are affluent, an increase in stress can further emphasize the importance of staying healthy, and in difficult times people tend to seek out experiences rather than material objects,” Baltin says. 

“All that being said, hotel spa usage will likely decrease due to expected declines in occupancy rates and guest counts for the lodging industry in general.”  

In its December 2008 Hotel HorizonsSM report, Atlanta-based Hospitality Research, the research affiliate of PKF Consulting, is forecasting that the typical U.S. hotel will experience a 5.3 percent drop in occupancy in 2009.

The report finds spas continued to contribute to the top and bottom lines of U.S. hotels in 2007.  Total spa department revenue increased 5.0 percent from 2006 to 2007, while spa department profits grew 5.8 percent.  

The report examines the revenue, expenses and profits of hotel-operated spas in the United States.

“Lodging industry owners and operators fully realize that a well-run spa operation can benefit a hotel in many ways,” says Baltin. 

“In addition to the monetary contribution, a spa can help define the market position of a hotel, provide a competitive asset that is attractive to multiple demand segments, and diversify a hotel’s revenue stream. 

“It is this type of product differentiation that managers hope will provide a competitive advantage in 2009.”

However, Baltin has not written off the spa revenue magnet altogether.

“As U.S. hotels are forecast to struggle with declines in occupancy, ADR, and revenue, we believe there is an opportunity for spa operators to capitalize on operational and competitive advantages,” he says.

“Hotel spas are an important amenity to all market segments and should be leveraged with regards to meetings, conventions, and other special events.  Innovative marketing can also be created to promote the spa as a ’staycation,’ thereby providing a refuge for local residents.”

Spa Revenues

The report notes that since the number of occupied rooms for the survey sample remained relatively flat (0.2 percent decline), the 5.0 percent rise in spa revenue was likely due to an increase in the price for spa services, increase in number of services utilized per hotel guest, or a stronger mix of local patronage. 

“Recent research has shown that although consumers are tightening their belts, they are still traveling albeit with a different mindset and expectation of services,” says Gabrielle Lerner, associate in the Los Angeles office of PKF-C.

“People increasingly are requiring greater value and a heightened level of experience. Hotels with spas can meet those needs by providing promotional packages, special offers, and discounts.”

For the hotel spas that participated in the survey, department sales represented 3.9 percent of total hotel revenue in 2007.  

Within the spa department, massage continued to be the greatest source of revenue (55.6 percent), followed by skin care and body work (18.8 percent) and salon services (10.7 percent).

Spa Expenses

Overall, spa department expenses increased 4.7 percent from 2006 to 2007, driven mainly by a 6.6 percent increase in labor costs.  Like all departments within a hotel, labor-related costs are the biggest operating expense for spas, representing 57.2 percent of department revenue.

 ”Labor costs in urban hotel spas tend to be somewhat higher than in resort spas, Lerner says. “Urban hotel spas have lower revenues and inconsistent demand for services making scheduling more complicated.” 

Spa Profits

The average departmental profit margin for the spas in the survey sample was 24.1 percent.  For comparison purposes, the average profit margin for all other operated departments in PKF’s Trends in the Hotel Industry survey was 29.4 percent.

From 2006 to 2007, hotel spa department profits grew 5.8 percent.  Profit growth was greater for urban spas (12.3 percent) versus resort spas (4.6 percent).  

“While 5.8 percent is a healthy rise over the previous year, it was less than the 6.7 growth rate for total hotel operated department income, which demonstrates the evolving spa industry still has room to improve,” Baltin notes.

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Spas continued to contribute to the top and bottom lines of U.S. hotels in 2007. Total spa department revenue increased 5.0 percent from 2006 to 2007, while spa department profits grew 5.8 percent. These are among the findings reported in PKF Consulting’s (PKF-C) recently released 2008 edition of Trends in the Hotel Spa Industry, a report that examines the revenue, expenses, and profits of hotel-operated spas in the United States.

“Lodging industry owners and operators fully realize that a well-run spa operation can benefit a hotel in many ways,” said Bruce Baltin, senior vice president in the Los Angeles office of PKF Consulting. “In addition to the monetary contribution, a spa can help define the market position of a hotel, provide a competitive asset that is attractive to multiple demand segments, and diversify a hotel’s revenue stream. It is this type of product differentiation that managers hope will provide a competitive advantage in 2009.”

During challenging times like these, the spa industry has the potential to be buoyant. However, it is not invincible. “The dynamics of the spa industry enable it to persevere longer than other industries for several reasons,” Baltin noted. “A large portion of its consumers are affluent, an increase in stress can further emphasize the importance of staying healthy, and in difficult times people tend to seek out experiences rather than material objects. All that being said, hotel spa usage will likely decrease due to expected declines in occupancy rates and guest counts for the lodging industry in general.” In its December 2008 Hotel HorizonsSM report, PKF Hospitality Research (PKF-HR) is forecasting that the typical U.S. hotel will experience a 5.3 percent drop in occupancy in 2009.

The 2008 Trends in the Hotel Spa Industry report analyzes the 2007 financial performance of 116 spas operated by hotels located throughout the United States. In aggregate, the 116 hotels that voluntarily submitted their data for the survey averaged 405 guest rooms in size and achieved an occupancy of 70.8 percent and average daily room rate of $257.14 in 2007. Both urban and resort hotel spas were included in the research, while day spas, medical spas, destination spas, and hotel spas that independently lease space were excluded. For the purposes of this research, departmental profits are calculated before deductions for undistributed expenses and fixed charges.

Spa Revenues
Since the number of occupied rooms for the survey sample remained relatively flat (0.2 percent decline), the 5.0 percent rise in spa revenue was likely due to an increase in the price for spa services, increase in number of services utilized per hotel guest, or a stronger mix of local patronage. “Recent research has shown that although consumers are tightening their belts, they are still traveling albeit with a different mindset and expectation of services. People increasingly are requiring greater value and a heightened level of experience. Hotels with spas can meet those needs by providing promotional packages, special offers, and discounts,” observed Gabrielle Lerner, associate in the Los Angeles office of PKF-C.

For the hotel spas that participated in the survey, department sales represented 3.9 percent of total hotel revenue in 2007. Within the spa department, massage continued to be the greatest source of revenue (55.6 percent), followed by skin care and body work (18.8 percent) and salon services (10.7 percent).

Spa Expenses
Overall, spa department expenses increased 4.7 percent from 2006 to 2007, driven mainly by a 6.6 percent increase in labor costs. Like all departments within a hotel, labor-related costs are the biggest operating expense for spas, representing 57.2 percent of department revenue. “Labor costs in urban hotel spas tend to be somewhat higher than in resort spas. Urban hotel spas have lower revenues and inconsistent demand for services making scheduling more complicated,” Lerner said.

Spa Profits
The average departmental profit margin for the spas in the survey sample was 24.1 percent. For comparison purposes, the average profit margin for all other operated departments in PKF’s Trends in the Hotel Industry survey was 29.4 percent.

From 2006 to 2007, hotel spa department profits grew 5.8 percent. Profit growth was greater for urban spas (12.3 percent) versus resort spas (4.6 percent). “While 5.8 percent is a healthy rise over the previous year, it was less than the 6.7 growth rate for total hotel operated department income, which demonstrates the evolving spa industry still has room to improve,” Baltin noted.

Hotel Spas In 2009
“As U.S. hotels are forecast to struggle with declines in occupancy, ADR, and revenue, we believe there is an opportunity for spa operators to capitalize on operational and competitive advantages,” Baltin said. “Hotel spas are an important amenity to all market segments and should be leveraged with regards to meetings, conventions, and other special events. Innovative marketing can also be created to promote the spa as a ‘staycation,’ thereby providing a refuge for local residents.”

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The DSF Group and Kimpton Prepare the $50 million Lorien Hotel & Spa in Alexandria, Virginia for Ope

On Feb. 12, 2009, the $50-million Lorien Hotel & Spa will debut in Alexandria, VA as Kimpton’s crown jewel of the Washington, D.C. metropolitan region. Owned and developed by the DSF Group and managed by Kimpton Hotels & Restaurants, the 107-room urban retreat will bring an elevated level of style and service to historic Old Town, Alexandria with a full-service spa, world-class interior décor by acclaimed designer Vicente Wolf, and three culinary venues by celebrated chef Robert Wiedmaier.
“The Lorien Hotel & Spa will be a destination all its own, with a level of service that is unsurpassed,” says Don Anderson, general manager and Alexandria native. “We are in the unique position to offer the comfort and intimacy of a boutique hotel, with the amenities of a resort, to deliver a four and a half star-caliber hotel experience. This is a highly anticipated opening for Kimpton and Old Town alike.”

At Kimpton hotels, every hotel tells a story, and the Lorien Hotel & Spa will celebrate the story of dreams. The dream story will be brought to life through personalized amenities such as a 24-hour “dream” button on all guestroom phones, with a direct line to a highly-trained concierge to coordinate all elements of a perfect stay. An extensive “Dream Service Menu” will make available specialized amenities including comfort foods, soothing bath, aromatherapy and pillow options, that can be delivered to the room to help set the stage for a good night’s sleep and sweet dreams.
With an eye towards offering a heavenly retreat for travelers, world-class designer Vicente Wolf was hired to create the hotel’s décor. Artfully blending old with new, Wolf reinterprets American classic design with a modern flair at Lorien Hotel & Spa. The building’s exterior reflects the historic charm of Old Town with its warm coral-hued brick walls and copper rooftops. But stepping inside, guests are welcomed by sleek and elegant interiors that hint at both past and present and evoke a fresh and contemporary feel.

The 107 spacious guestrooms and suites have a warm and residential atmosphere, with a calming palette of robin’s egg blue, gray and white. Custom-made furnishings, such as wingchairs and trellis-style headboards, are reinterpreted with a contemporary flair. Numerous suites and specialty Spa Rooms also boast spacious bathrooms with claw foot tubs and rainfall showers.

All rooms offer a wide range of amenities including 42″ flat panel televisions, a spacious work area, wireless and wired high-speed Internet access, an iHome clock radio, laptop safe, plush robes, and a gourmet honor bar featuring organic and healthy options. Guests can also enjoy signature Kimpton services including in-room yoga, Pilates and meditation TV programming, 24-hour room service, Forgot It? We’ve Got It! travel items, and overnight shoe shine and valet/laundry service.

Perhaps one of the most inspiring aspects of the Lorien Hotel & Spa is the hotel’s Terrace Suites. These unique suites offer expansive terraces, some as large as 700 square feet, complete with cozy couches and seating ideal for hosting intimate gatherings for up to 30 people, or for nighttime stargazing. To enhance the experience, the hotel will offer a “Terrace Menu” with choices that range from private wine tastings and alfresco dining to dance lessons, as well as more playful amenities such as sleeping bags, luxurious blankets, telescopes, and more.

The Lorien Hotel & Spa will be the first hotel in Old Town Alexandria with a full-service spa. The 4,000 square foot spa and fitness center includes five treatment rooms, private locker rooms, two steam rooms and an indulgent dream-inspired treatment menu utilizing organic and paraben-free products from Kerstin Florian that are restorative to the body and in harmony with the environment. The spa’s 24-hour fitness center offers a full range of exercise equipment, free weights, and personal training and private yoga classes are available by appointment.

Lorien Hotel & Spa is also a gourmand’s dream with not one, but three dining venues helmed by celebrated chef Robert Wiedmaier. The foodie trifecta includes a 105-seat restaurant, a 43-seat tasting room, and a wine and cheese retail shop. At the restaurant, Chef Wiedmaier will serve Belgian cuisine with American inspiration and offer a collection of hard-to-find, yet approachable wines and an extensive list of Belgian beers to pair with any meal. The tasting room will provide a more casual, European-style dining experience experience, where guests can enjoy light fare from the chef’s wood-fired oven and sample wine and other spirits. At Chef Wiedmaier’s retail shop, which will be Old Town’s first gourmet food shop, guests and locals alike can shop for wine, gourmet beer, and various treats ranging from cheese to olives and charcuterie.

The Lorien Hotel & Spa will also feature more than 3500 square feet of sophisticated meeting and event space, including three meeting rooms, a hospitality suite, and functional outdoor venues. Customized meeting breaks, including private wine tastings and chef dinners, can be arranged through the hotel’s team of highly trained professional meeting planners.

Lorien Hotel & Spa is ideally located within steps of the metro, located in the heart of Old Town Alexandria and offers easy access to the surrounding Washington, D.C. area. The hotel is just four miles from Ronald Reagan international Airport, and four blocks from the Amtrak station. For guests who prefer a different mode of transportation, complimentary bicycles are available for a ride to the Potomac River. Chef Wiedmaier picnic baskets, filled with all the makings for a gourmet lunch, can be prepared upon request.

Room rates at Lorien Hotel & Spa start at $329, and special weekend rates are available. Lorien Hotel & Spa is located at 1600 King Street, Alexandria VA, 22314. For more information or reservations, please call 703.894.3434 or 877.856.7436 toll free or visit lorienhotelandspa.com.

The Owners DSF Group
The award-winning DSF Group is a private real estate company that makes value-added investments in multifamily and commercial properties, primarily in the high-growth Northeast Corridor between Washington DC and Boston.

Having extensive business and leisure travel experience, the founders of The DSF Group wanted to create a hotel they would choose to stay at…and one they would want to return to.

Lorien Hotel & Spa is the result of that vision. The DSF Group partnered with boutique hotelier experts Kimpton Hotels, world-renowned designer Vicente Wolf and critically-acclaimed Washington DC chef Robert Wiedmaier to create an environment in which the business traveler could relax, unwind and feel rejuvenated following a long day. Whether that is accomplished through a private spa treatment, dinner from one of the three destination food venues or simply returning to the restful guestrooms, it is all available to choose from at Lorien Hotel & Spa.

With over $1.5 billion invested in four million square feet since the year 2000, The DSF Group has quietly become one of the most successful private real estate investment firms in the country.

Designer Vicente Wolf
In the world of contemporary design, Vicente Wolf has been at the top for three decades. Through his firm, Vicente Wolf Associates, he explores his passion for design, guided by the principles of integrity and simplicity. Lorien Hotel & Spa is the latest in his pursuit of this passion, benefitting from his design throughout the hotel, the spa and the restaurants.

Wolf has designed a wide range of projects, including the LS Store in Hong Kong, the Luxe Hotel Rodeo Drive and Café Rodeo in Beverly Hills, the Andrew Fezza company offices and showrooms, the Registry stores in Chicago, Bedell Cellars Winery and guest cottage on Long Island’s North Fork, the executive office of J Records for Clive Davis, the interiors of New York’s L’Impero and Alto restaurants and an extensive list of residential interiors.

House Beautiful named Vicente Wolf as one of the ten most influential designers in the United States and Interior Design Magazine inducted him into its Designer Hall of Fame. Selected as one of the top 100 designers in both Metropolitan Home’s “Design 100″ and Architectural Digest’s “AD 100,” Wolf’s work has been featured in various design books and magazine, including these publications, The New York Times, Elle Décor, House & Garden, Vogue Decoration, Country Living and Maison & Jardin.
Over the last few years, Wolf has become known for his other passion: photography, which can be found throughout the Lorien Hotel & Spa. He has had individual gallery shows, photographed his design projects for magazines and shot the advertising campaign for Anichini Linens. He also put together an exhibit of his photography, titled Series III: Compositions, for the Pucci Gallery in New York.

Wolf has contributed his designs to many arts and charitable organizations, including the Brooklyn Academy of Music, the Design Industries Foundation Fighting AIDS (DIFFA) and the American Society of Interior Designers (ASID). Wolf teaches an annual course through Parsons School of Design in the Dominican Republic and his first book, Learning to See, focuses on personal style and travel.

The Chef Robert Wiedmaier
Now leading the culinary efforts at Lorien Hotel & Spa, chef and proprietor Robert Wiedmaier developed a strong passion for the culinary arts at a young age while growing up in Germany. Born to a father who is 100% Belgian and a mother who is Californian, Wiedmaier was given a chance to experience ingredient-based cuisine with the freshest produce, meat and dairy.

Wiedmaier attended the Culinary School of Horca in the Netherlands. His apprenticeship at the Thermidor Restaurant, a Michelin two-star establishment, brought him to Brussels to work with famed Chef Eddie Van Maele. In 1986, he took the position as Saucier at Le Chardon D’Or in the Morrison House in Old Town Alexandria, Virginia, bringing him to the United States for the first time in his culinary career.

In 1988, Wiedmaier joined the team at the renowned Le Pavillion as Chef Poissonnier, and a year later, moved to the Four Seasons, the most prominent hotel in the city, as Sous Chef position at Aux Beaux Champs restaurant under the tutorial direction of Chef Douglass McNeill.

Seven years later, Chef Wiedmaier opened Café on M at The Grand Hotel, giving Wiedmaier a personal venue to use his culinary roots and where he established his critically acclaimed French Cuisine Flavored with a Flemish Flair.

In June of 1996, The Watergate Hotel asked Wiedmaier to oversee and manage the culinary operations for the hotel. He also undertook the re-design of the kitchen and opened their then-new restaurant, Aquarelle. Wiedmaier replaced Executive Chef Jean-Louis Palladin, whose tenure at the hotel had been immensely successful as well as having been a strategic mentor to Wiedmaier.

In March of 1999, Robert Wiedmaier opened Marcel’s restaurant, named after his first-born son. Between this opening and the opening in April of 2007 of Brasserie Beck, named for his younger son (and only a mile from Marcel’s), Wiedmaier received significant acclaim for his cuisine, including Fine Dining Restaurant of the Year (2004) award by the Restaurant Association of Metropolitan Washington and Chef of the Year by the American Culinary Institute. Marcel’s was inducted to the prestigious Distinguished Restaurants of North America (DiRoNA), the only anonymous restaurant inspection program in North America and maintains Washingtonian magazine’s high level of status with 3.5 out of 4 stars. Additionally, Zagat rates Marcel’s in the Top 5 for Food category.

Some of Wiedmaier’s favorite things to cook with are sweetbreads, foie gras, skate and any variations of wild game at Marcel’s and at Beck’s. According to Wiedmaier, “My cuisine is simple. I concentrate on high quality ingredients. More than anything, I’m a cook first, chef second.” An exceptional highlight of Wiedmaier’s cuisine techniques is his use of all parts of each animal he cooks with to create his sauces. “Nothing goes to waste. If you’re not tasting, you’re not cooking.”

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Hyatt names director of new luxury spa
Hyatt Regency Monterey Resort & Spa on Del Monte Golf Course has announced the appointment of Joe Herman as director of the resort’s $6.5 million luxury spa, scheduled for completion in April.

Herman’s plans include the introduction of a spa menu featuring seasonal face and body treatments that combine natural ingredients and techniques indigenous to the Monterey Peninsula, such as kelp and thallasotherapy (seawater therapy treatments), with well-established facial products.

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Jeffrey Naylor named General Manager, Teton Springs Lodge Spa

Victor, Idaho–November 6, 2008–Jeffrey A. Naylor, a hospitality industry executive with ten years of resort management experience in Idaho and Wyoming, has been named general manager of Teton Springs Lodge Spa.

Prior to accepting this position Naylor was sales manager at Grand Targhee Resort Alta where he had responsibility for corporate, incentive, association and meeting sales as well as working with international wholesalers, recreational and social groups, and web intermediaries. In addition, he worked at the resort during winter seasons as an accountant from 1993 to 1998 during which time he also helped manage Teton Branch Farms in Teton Valley, a family farm.

Naylor began his hospitality career as a bellman at the Doubletree Hotel in San Diego before joining Bowest Mortgaging Service Corporation in La Jolla, California where he was manager of payment processing from 1989 to 1993. He holds a Bachelor of Arts degree from San Diego State University in Economics.

“We are delighted to welcome Jeff to our management team,” said Stephen Price, of Spirit Dance Hospitality. “His experience at Grand Targhee and his intimate knowledge and passion for this magnificent part of the country will be invaluable in helping to achieve the goals of Teton Springs Lodge and Spa.”

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Umstead Hotel & Spa to replace GM, sales managerTriangle Business Journal 

CARY – The Goodnight family, owners of the luxury Umstead Hotel & Spa in Cary, have dismissed three members of the hotel’s management staff based on what was considered “underperformance on the owner’s vision.”

Leah Goodnight, daughter of SAS co-founder Jim Goodnight and his wife, Ann Goodnight, has been named acting general manager. She has taken over the role from former Managing Director Bob Schofield, who had been with the hotel’s management team since before construction began in 2006. The hotel and spa opened in January 2007.

“Operationally, the hotel is running fine and profitable,” Leah Goodnight wrote in a statement to Triangle Business Journal. “The upper management change was based solely on the vision and expectation ownership had set forth for internal procedures, and our concern about employee turnover.”

Other management members who were dismissed around Oct. 24 include Richard Brooks, director of sales and marketing, and Bridget Nelson, director of human resources. The hotel also has an ongoing search for a new food and beverage director following Nick Pijerov’s departure in September.

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The recently opened Spa Luce at the Renaissance Hollywood Hotel & Spa in Los Angeles features:

• Modern composition and Artisan craftsmanship
• Tiled walls
• Weathered teak cabinetry
• Abundance of natural light promote a soothing environment throughout the facility

Signature treatments:

• Hammam Ritual, a five-step massage based on the skincare practices of ancient bathhouses.
• Japan Ritual incorporates therapeutic properties of flower essences with rich minerals.

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Travel Q&A: Finding a spa in New Mexico

Q: I’m considering going to New Mexico for a high-end spa weekend. Any ideas?
- K.C. in CA

A: In my dream world, I could be paid to perform such public services as reviewing high-end spas in the Southwestern desert. Until then, we’ll have to rely on unbiased reports from those who do go to spas as regular ol’ paying customers.

Many spa magazines and Web sites are closely aligned with the spa industry itself. They may have terrific spa experts on staff, but I suggest you weigh their reports with the proverbial grain of salt.

Some spa sites lists only three spas in New Mexico: Hyatt Regency Tamaya, RockResorts at La Posada and Spa Sumadhi at Sunrise Springs. There is no mention of the dozen other getaway spas in the state. Another, offers blurbs on six New Mexico spas, with each write-up more adjective-filled than the one before it.

But plenty of travelers contribute opinions to Zagat surveys, and they regularly give high marks to Ten Thousand Waves spa in Santa Fe.

As do most spa devotees we know. Longtime travel writer Anne Chalfant calls Ten Thousand Waves, which is popular with both women and men, one of the best low-key spas anywhere.

“There are options for private hot tubs set under the pinon pines, or community hot tubs,” she says. “Don’t look for a facial or to get your nails done – it’s not that kind of spa. Instead, it’s a lovely, quieting place, like a Japanese onsen.”

Kyle Wagner of the Denver Post raves about Ojo Caliente.

“An hour southwest of Taos sits an oasis of sanity, and a true rarity: a reasonably priced spa, complete with four geothermal springs and a mud pool,” Wagner says. “It has wonderful American Indian spiritual undertones, and leans more toward the basics, but the full-service treatments are top-notch.”

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Ginger M. McLean has been appointed spa director of The Spa at the Hotel Hershey in Hershey, Pennsylvania.

Ginger McLean has extensive experience in the hospitality and resort industries. Recently Ms McLean served as director of spas and tarpon membership at Marco Ocean Beach Resort Fiddlers Creek in Marco Island, Florida.

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