Luxury spa sector recovering from global recession

Luxury spa sector recovering from global recession

Luxury spas in hotels across America underwent a revival during the latter half of 2009, generating a positive outlook for 2010.

According to the latest information from holiday data organisation STR, the Average Treatment Rate (ATR) was US$135.39, representing a 4.5 per cent decline compared with full-year 2008.

However, the Average Treatment Room Utilisation (ATRU) across American increased by 3.5 per cent – up to 31.1 per cent.

In part this illustrates the trend of luxury hotel spas ‘buying’ utilisation; sacrificing rates in order to attract increased customer volumes.

The results were helped by a relatively strong fourth quarter, benefitting from the positive comparison against the fourth quarter of 2008, which was the beginning of the global recession.


The findings are mirrored by the performance of the US luxury hotel industry.

For that segment, Average Daily Rate (ADR) declined 16.3 per cent to US$243 in 2009. For the same period, demand declined 0.6 per cent, but the unprecedented influx of almost 8,000 new rooms, or 8.9 percent of existing supply, caused occupancy to fall 8.7 per cent.

“The positive growth in the treatment room utilisation is more robust than the decrease in guest room occupancy, which seems to be an indicator of the spa’s ability to capture hotel guests as well as attract a local audience to the spa,” said Jan Freitag, STR’s vice president of global development.

For salons in luxury hotel spas, Average Salon Rate (ASR) and Average Station Utilisation (ASU) declined for the year.

Again, the relatively strong fourth quarter comparables eased the poor performance through to September. For 2009, ASR declined 3.6 per cent to US$59, and ASU dropped 9.3 per cent to 19.5 per cent.

“When comparing luxury hotel spas’ 2009 ATR (US$135.40) and the ASR (US$59) to the luxury hotel industry’s ADR (US$243), it might bring up the question as to whether the spa segment will receive increasing attention from general managers going forward,” Ms Freitag added.

“After all, a hotel room can only be sold once per night, while a spa treatment room can be sold multiple times a day.”

STR expects the US lodging industry to show signs of stabilisation during 2010, starting at the upper end of the chain-scale spectrum.

This top-down recovery should also aid the participants in the luxury Spa STAR sample, as group and transient business travellers take to the road once more and leisure travellers continue to shop for value.

Spa STAR is a new benchmarking program for spas produced by STR showing major performance metrics in the area of spa treatments, salon and retail.