Exploring the Spa Industry in Canada

Exploring the Spa Industry in Canada
By Susie Ellis, SpaFinder Insider

Just returned from the Leading Spas of Canada spa conference in Toronto, where I had the privilege of speaking about spa trends of the future. I always enjoy seeing the Canadian spa owners, who are universally friendly and very supportive of both one another and their industry. Here are several things I learned about what is happening “now” in their area.

Canada’s recession is milder than what we are experiencing in the U.S. When I asked people how their spa businesses were doing, I received mixed responses. Some spas seemed to be doing as well as last year, a few are doing slightly better (several are opening a second branch) and for others, business is off. However, those who saw a drop in their benchmark figures for the first quarter of the year told me that they are down only 5 -10% compared to the same months in 2008. That is a much smaller decrease than what I hear from many spas in the U.S.

When I checked with Smith Travel Research (STR) to find out the actual numbers for occupancy, ADR and RevPar for both the US and Canadian hotel industry, their numbers mirrored what I was hearing from the spa owners I spoke with in Canada. Interesting that the STR numbers might be a good barometer for other industries outside of the hotel inddustry. Spas probably have some similarity. (Although I recently spoke with Susan Harmsworth who told me that in some cases spas in hotels are doing better than the hotels – relatively speaking.) Since STR will be gathering and disseminating spa data sometime in the future, it will be really interesting to learn more about these correlations.

Some of the reasons Canada is fairing better through this economic crisis is because Canada’s banking system is more regulated than the system in the US. The country’s unemployment rate is also healthier, at 7.7% compared to the US’s current average, 8.5%. Canadians seemed to be more worried about the strength of the Canadian dollar than anything else.

What seems to be impacting the Canadian spa industry the most, at present, is the drop in the US tourist business. Americans are not crossing the border as much as before. Those who do come, aren’t spending as much money.

I was very impressed with how the Canadian Tourism Commission (CTC) is now getting involved with promoting Canadian spas. The CTC is behind the very successful campaign, “Canada, Keep Exploring.” The commission will now be showcasing a collection of Canadian spas and describing various indigenous experiences. Canada has been committing a lot of resources to attract tourism and there is an additional 40 million Canadian dollars coming their way due to their country’s stimulus efforts, some of which will be used to promote their spas.

I learned a bit about country and their branding initiatives, which I found fascinating. There is a “Country Brand Index,” announced each year by FutureBrand of New York. This company ranks countries in terms of the success of their marketing campaigns. Australia has been #1 for three years and Canada is now #2. That’s pretty impressive. The top five in the 2008 results are:

1. Australia
2. Canada
3. US
4. Italy
5. Switzerland

I was of course glad to see the US as #3 and also happy to see Switzerland at #5. We have the CEO of Swiss Tourism, Jürg Schmid, speaking at the Global Spa Summit in May. The Swiss Tourism board has already initiated a major campaign to market Swiss Wellness and Spa options. It will be interesting to hear how this campaign is working for them.

I think that having government tourism organizations, like Canada and Switzerland’s, promote their nation’s spas shows just how far our industry has come – and how important spa and wellness is becoming for tourism. Now wait until the medical community learns how valuable we are for reducing health care costs.
**
If you wish to be put on a list that automatically sends my blog posts to your email, just let dulcy.gregory@spafinder.com know and she will add you to that list. Thanks so much!