Making Sense of the Spa Business - Part III

by Gary Henkin
President
WTS International

The question that is all too often left behind in the design and pre-opening process for a spa is “what happens when the doors open.” It is striking to note how many spas go down the path prior to opening without adequately addressing the key issues so critical to a successful operation. These include consideration of trends in the industry (how best to make the spa delineative); where can I source qualified personnel and what traits should I look for in my staff; what products and retail services should I select; what licenses or permits do I need to open effectively; what should I do to maximize exposure and promotion of the spa; and last but not least, how can I effectively “integrate” the spa into my hotel, resort or real estate development to increase the opportunity for operational and financial success. Unfortunately, in many instances, these questions often go unanswered until the 11th hour.

Imagine that you are preparing to spend significant capital to develop or renovate a spa, fitness center or leisure facility. You are preparing to begin the concept development and design process; perhaps, this has already been completed and you are several months away from launching the opening of the spa. You decide that a consultant may be beneficial, but you’re uncertain as to how to source and select a qualified individual or firm and what exactly the scope of work should be.

The selection of a consultant to assist in the feasibility, design, pre-opening, and management of your facility is a critical decision that can ultimately impact the success or failure of your project. Hiring a qualified consultant who has the depth of experience and expertise required will likely save time, money, and numerous headaches. However, choosing the wrong consultant can result in project delays, increased expenses, and organizational chaos. Through proper planning, research, thorough interviewing and active engagement in the selection process, you will increase your odds of creating a positive relationship with a consultant that will help you build a solid foundation for the success of your new spa, fitness center or leisure complex.

When do you need a consultant?
Before you begin seeking the services of a consultant, make sure that you have identified your needs and reviewed internal resources. Typically, organizations hire consultants to obtain the benefits of specialized expertise, gain an objective and fresh viewpoint, and obtain resources that aren’t available from the project team. You and your colleagues should know precisely where there are gaps in your focus and capabilities, and you should clearly identify your goals and objectives before you begin the interview process. Typically, a consultant should be engaged to assist in the evaluation of a project’s size, scope and financial viability. This includes potential input in the design, layout and financial analysis for the proposed spa.

Why hire a consultant?
In today’s highly competitive marketplace, it is critical to provide a truly relaxing, serene and enjoyable experience for guests, members and other spa patrons. Thus, specific attention needs to be paid in the planning process to determining the most aesthetically pleasing, cost efficient design for the spa. In many instances, spas and fitness facilities are launched without the benefit of appropriate planning in the front end. This is a stage at which a qualified consultant can have significant impact in helping to shape the ultimate size, scope and destiny of the project.

Prior to the start of the design process, consideration should be given to having a consultant develop a needs analysis or feasibility study. This document should offer a wealth of information to the owner/developer including, but not limited to, recommendations with regard to the size of the facility, scope of offerings, local or regional competition, market and demographic data and a 5 year operating pro forma with complete revenue and expense projections. Many times, developers do not engage consultants to provide this input at such a preliminary stage (prior to instigating design), and the result of this lack of planning and forethought can penalize the ultimate plan and chances for both design and operational success. Thus, think about the benefits of having a consultant do a needs analysis report prior to starting in on the design for the spa.

At the next point in the planning process, a consultant should be interfacing consistently with the client or owner and with the client’s entire project team; this includes the selected architecture and interior design firms, project managers, general contractor, engineering and other key members of the team. The consultant should have enough experience to weigh in on all areas related to concept development, facility planning and design. This can include areas such as space program development, schematic design, spa (and fitness) equipment specifications, layout of reception and locker rooms, retail area design, lighting and sound attenuation issues, data management systems, flooring, cabinetry, millwork and all other items related to facility design.

Beyond the design process, a consultant can have a dramatic impact on the quality, standards and financial viability of the facility operation. In the pre-opening process, this should include involvement in the selection and training of the spa staff, operating budget, development and finalization of the spa treatment menu, retail product selection, marketing and promotion plan, standard operating procedures and a sophisticated timeline containing all items as may be required to open the spa/fitness facility. Once the facility is ready to open for use, the consultant can continue on an ongoing basis to work with the client and with the spa’s staff to ensure that goals and expectations, both operational and financial, are being met.

Why hire a consultant? In summary, the short answer is that a knowledgeable, qualified consultancy firm (or individual) can have a lasting and positive impact on all areas of spa and leisure facility planning, design, pre-opening and daily operations. This can afford the owner/developer tremendous benefits as he or she is trying to position the property in the most favorable light and to delineate it from competition.

Types of consultants and services
There are several types of consultants that are typically involved in the feasibility, design, pre-opening and management of spas. Depending on the size, scope and existing phase of your project, you may have the need for one or multiple consultants. They typically fall into one of two categories: solo-practitioners or consulting firms. The soloists typically deal with specialty areas while firms are typically able to handle a larger or more diverse set of services. While neither type of consultant is necessarily better, ensure that the soloist doesn’t fall into the less than desirable “jack of all trades and master of none” category. You will want very specific input from your consultant in each phase of the spa’s development from concept creation and design to opening and operations.

Guidelines for hiring a consultant
Poor preparation will lead to poor performance, and the selection of a consultant is not an exception to this rule. When hiring a consultant, the following guidelines should be considered to avoid wasting precious time and resources.

Request and review several bids. Sourcing and hiring a consultant is no different than hiring a key member of your staff. Ask colleagues for referrals and request numerous references. Industry specific professional organizations such as ISPA are a great resource as is the internet. Make sure to source more than one option and receive bids from all parties; an RFP (Request For Proposals) process is a good way to sift through the options and assess bids. An RFP also allows for the assessment of consultant qualifications and answers to critical questions in a written format.

Include all key team members in the interview process. Your project team should take ownership of the hiring process and feel comfortable with the individual or company selected. The consultant must fit easily into your company and/or project culture. To do this effectively, the selection process should be inclusive of key members of your staff who are part of the project team; don’t leave this crucial decision to one individual alone unless there is no other option.

Look for experience with similar projects. One of the main reasons to hire a consultant is to acquire their expertise in specific areas of a project’s development cycle. Look for someone (or a firm) that can easily transfer their experience from other similar projects to yours. It is helpful if the consultant has walked in your shoes at some point. While it might seem alluring to hire a consultant who has worked with larger projects, it is best to hire a consultant that has references from clients that fit closely with the size and scope of your particular site.

Look for learners and listeners. Great consultants are lifelong students. They are open minded and intellectually engaged. They know what they do not know, and they have the confidence to tell you when they may need assistance themselves. If your consultant is busy talking over you instead of actively listening and learning about you and your project, there will ultimately be a problem. Consultants should ask questions and seek to understand every aspect of your project, your goals and your team before providing recommendations. The very first thing that any experienced consultant will do is to listen to a client’s vision and expectations. Only after doing this can he/she make effective recommendations and have the most viable input.

Ask for a proposal. The consultant should provide you with a written proposal including a detailed action plan outlining the specific services that will be provided, short term goals, deliverables, and the timeframe required for each phase of the project. This proposal process affords the consultant the opportunity to demonstrate their understanding of your project and to provide a structured approach to meeting your needs. As previously mentioned, responses to an RFP process are a very effective way to source out the most viable consultant for your site.

Check references thoroughly. You should ask probing questions that address how the consultant handles unforeseen problems. Request references from recent and former clients. This will help to determine the short and long term impact of the consultant’s work. Too often, owners and property firms do not go through the process of doing a thorough reference check and this can often come back to bite them.

Get the pay schedule and contract in writing. There is no set standard for paying consultants. Some work on a straight hourly or daily fee basis, while others may work for a fee plus performance bonus. The straight fee basis is typically recommended as performance based bonuses may be perceived as influencing the advice provided. As an example, there should be no remunerative benefit or conflict of interest when a consultant makes equipment recommendations for a spa or fitness center. Beyond the consultant’s fee, there are various expenses such as travel and incidentals. It is important to clearly understand the pay schedule and have this in writing.

A deposit may be required, but fees should be charged as work and deliverables are completed. Make sure there is an acceptable termination provision in the contract and that it is equitable for both parties.

Ask for a confidentiality agreement. Don’t make the mistake of treating a consultant any differently than you would treat an employee that has access to your proprietary information. You and your staff should feel free to discuss any business subject with your consultant, and you should have the documentation in place to protect the confidentiality of your project, business practices, and intellectual property.

Top questions to ask during your consultant interviews
It is important to interview several consultants before making a decision to hire either an individual or a firm. Although you may have one person or company in mind, it is important to do your due diligence. Ask the following questions during the interview, and you will likely find that these questions not only help you select the right person or firm, but also help to better understand your needs.

1. How many years have you been in the business? What was your professional experience before you became a consultant?
2. Who are some of your other clients? Can we ask them about your work? Which of your clients are most like our project?
3. How many professionals work with you and/or your firm? What is your company infrastructure?
4. How many clients do you work with at one time? Do you have enough time to devote to our company to help us achieve our goals? Can you meet our timeline?
5. Do you have a process to eventually teach us to do some or all of this work for ourselves to become more self sufficient should we wish to do so?
6. What will your final report and deliverables look like? Can we see samples? Who will own that documentation?
7. How do you charge for services? Do your fees include travel time and other miscellaneous charges or are those billed separately? Is there a “cap” on either fees or expenses?
8. Will you sign a letter of confidentiality?
9. Do you offer a complimentary session on the phone or in person to help you better understand our company prior to requiring a contract?
10. Can you describe your process? How much time will be required of me or my team?
11. What delineates you (or your firm) from others in the industry? What special advantages and benefits do you or your company bring to the table?

Common mistakes and pitfalls
By clearly communicating your goals and expectations, you will proactively avoid the common pitfalls associated with hiring a consultant. The most common mistakes when working with a consultant include:

• Seeking a consultant when you are in crisis mode. Many times, individuals seek a consultant as the last resort or at the 11th hour. At this point, it is often too late to correct mistakes. You should seek to engage a consultant before you have gotten too deeply engaged in a project. This is particularly true when assessing the financial viability of a leisure facility or before the design process begins.

• Looking for a consultant to provide all of the answers with minimal involvement from you and your colleagues. Keep in mind that this is a partnership. No matter how skilled the consultant is, no one can work to provide effective advice or solutions in a vacuum.

• Not being open to change. Team members must have an open mind when working with a consultant. Don’t be intransigent.

• Seeking a quick fix. Remember that you are looking for long-term solutions, not short lived success.

• Expecting the consultant to provide too much too soon. Don’t set unrealistic timelines for the consultant to effectively complete the tasks at hand. Rushing a process will only lead to mistakes or advice that is misguided.

Conclusion
Selecting the right consultant for your project need not be a daunting task and should be given the same consideration as hiring a key member of your staff. It is critical that you get this relationship right to obtain the maximum benefit of a consultant’s experience, guidance and input. A qualified consultant can save you time, money and considerable headaches as you go down the road in the development of a spa or fitness facility. Consider the addition of this important piece of the puzzle before plunging forward with the development of your spa. You’ll be pleased that you did.