Business

Saturday February 21, 2009

Different challenges for spas

By EUGENE MAHALINGAM and SHANNEN WONG


REGARDLESS of whether there is an economic downturn or not, one underlining issue seemingly continues to plague the local spa industry – the perception that it is nothing more than a front for shady business activities.

This perception has overshadowed the sector so much that it is seriously affecting the businesses of legitimate, “clean” spas out there.

Association of Malaysian Spas (AMSPA) president Datin Ramona Suleiman says it has been facing an uphill battle in trying to re-image the industry and give it the recognition and merits it deserves.

Datin Ramona Suleiman

“Many people have never been to a spa but have preconceived ideas about them. Spas have become a major component of tourism in that they help to promote the hotels and resorts in which they are located.

“We need to be able to differentiate between genuine spas like those within AMSPA and shady spas,” she tells StarBizweek.

AMSPA is a national body set up to represent the interest of spa owners, operators and spa-goers in the country.

Ramona, who is the founder and managing director of Energy Day Spa, says business (of her spa) is still good despite the current economic climate.

She notes that in view of the uncertainties, people are travelling less and spending more time on leisurely activities like spa treatments.

“Many of my clients who used to travel abroad for the holiday season were in town and came to our spa during the December-January period, which used to be an off-peak season,” she says.

Ozmosis Health & Day Spa director Sylvie Hyde says the biggest challenge in running a spa business is not the effects of the current economic downturn but rather the ability to hire and keep “good staff.”

“It’s difficult to find locals that want to work in a spa because of the perception that it is not a proper place to work. As a result, a lot of other spas resort to hiring illegal foreign workers.

“The Government is also restricting the inflow of foreign workers now and it is quite difficult to hire massage therapists,” she says.

Hyde’s Ozmosis spa is one of many members of AMSPA.

She says the organisation has had various dialogues with government officials to address the employment situation.

“We hope to have more dialogues in the future,” Hyde says.

Located above restaurant La Bodega in Jalan Telawi, Bangsar, Hyde, a qualified beautician, has been running the spa for over eight years. She says it sometimes does cross-promotional activities with the restaurant to create more awareness of the spa.

“About 90% of our clients usually find out about our spa through word of mouth. Others may hear about it through the Internet or when we have parties at the restaurant.

She adds that despite the current economic slowdown, business is still steady.

“We haven’t seen any impact. So far so good,” she says, tapping the wooden table beside her.

According to Hyde, the Ozmosis Health & Day Spa services between 13 and 15 customers per day and is fully booked on weekends and public holidays. A standard one-hour massage costs RM170.

Donald Cha

“Our customers are usually working people. The weekend is the only time when they are free. On average, we get at least three new customers per day,” she says.

Most of its customers are primarily from the middle-income group aged 30 years and above. Around 40% of its total customer base comprises expats. Hyde claims that nearly half of its customers are male.

“We are seeing more men now. There is always the perception that spas are more for women but now even men are going to spas to relax.”

Thalia Spa director Donald Cha concurs that the clamping of foreign workers by the Government is having an impact on the business of clean local spas.

“It is hard to get therapists. With so many hanky-panky spas these days, the Government is reluctant to issue operating licences. But I feel that if you have a valid reason to bring in foreign workers, than there should not be a problem.”

He also says compared to countries like Indonesia and Thailand, Malaysia is just not doing enough to promote the local spa industry.

“If you were to fly to Singapore via its airline, the flight attendants give out free spa vouchers!”

The Thalia Spa is also a member of AMSPA. Cha operates a spa at the Eastin Hotel (in Petaling Jaya) and at the Putrajaya Palm Garden Hotel. He also operates two hotel spas in Nepal and plans to set up a new one in Bhutan.

The success of his spas is dependent on the occupancy rate of the hotels. Cha says the local hotels each service about 10 customers a day, adding that a typical one-hour massage costs about RM150, which he feels is very affordable.

“The hotel occupants are mainly business travellers and many of them are generous tippers. If they can provide a tip of RM50, what is RM150?”

Cha says in light of the current economic situation, a slowdown in business can be expected.

“We are expecting a downturn but it is difficult to say. We did better before the Chinese New Year period. For this month (February), we are looking to at least maintain our previous month’s revenue,” he says.

Meanwhile, Serenity Spa managing director Mona Din says business of its four hotel spas has shown a slight decrease in tandem with lower occupancy rates of the hotel rooms.

“Most of the tourists and hotel guests are shying away from expensive packages and are instead settling only on simple and cheaper treatments such as massage and foot reflexology,” she says.

However, its other (day) spas located in residential areas have not been affected.

“Most of our day spa customers are regulars living nearby who still continue their monthly spa treatments despite the economic turmoil,” says Mona.

According to her, sales from its seven branches have not declined since the economic downturn although profits had dropped ever since the petrol hike last year.

“The general outlook for the spa industry this year will not be so encouraging as we feel that will be affected by the turmoil,“ she says.

Mona says spa owners have to be prepared to do whatever they can to practise cost saving measures and be more aggressive in their promotional campaigns in order to survive, adding that it aims to maintain its annual advertising budget of up to RM50,000 this year.

In terms of sales growth, Mona says: “We do not expect much growth, but we hope to maintain our regulars and business sustainability.”

“To be sustainable during this bad time, we have made a lot of adjustments to our packages by introducing simpler and more affordable services, she says, adding that the spa is confident of riding through the tough times ahead.

In contrast, Mandara Spa regional vice-president Trent Munday, who operates spas in high-end hotels, says most of its guests are affluent enough to be able to give themselves that special little treat every now and then.

“So far we have not experienced any significant downturn in our business. However, we will inevitably see a downturn if the current economic crisis continues.”

Munday says the group expects flat growth this year and hopes to maintain last year’s revenues adding that luxury industries such as spas are often the first to feel the effects of an economic downturn.

However, he believes that they are also the first to come out of that recession.

“As soon as the economy improves, people look for ways to treat and spoil themselves, especially if they have been making sacrifices,” he says.

With operations in 17 countries worldwide, the group is constantly working on packages with its host hotels as part of its normal business process.

“For special occasions such as Valentine’s Day, we usually come up with a package that includes hotel accommodation, meals and spa,” says Munday.

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