“Three years ago we were the fourth largest sector of the leisure industry and we have become much stronger. We are a major, major player in leisure.” The latest research, released by the International SPA Association (ISPA) shows that one out of five Americans visited some type of spa in the period between June 2002 and June 2003, and spa visits had already increased by 71% between 1999 and 2001. Spas collectively earned $11 billion in annual revenue in 2002/03, more than theme parks, and the approximately 45 million North Americans who made spa visits did so both on business trips and on vacation. Stress reduction and relaxation have become the foremost reason for spa visits, even more important than physical appearance and pampering. J eff Kohl, serving his third year as president of ISPA as well as director of spa operations at Princess Cruises, sees the industry walking a crucial line between intelligent business practices and the essential element that distinguishes and defines spas. "North American spas have information and ideas to share with European and Asian colleagues on making spas a viable business, but we don't want to slip so far into business that we lose the spiritual aspect of the spa industry," he said. He said the opportunities for exchange are growing, with North American spas interested in the techniques and products developed in other cultures. "What is unique about the spa industry, and always has been, is people's willingness to share information, even financial," he added. "You can call other spa operators and discuss compensation structures. It's a nurturing, caring industry and there is a strong dedication to the quality of spas as a whole. There are enough customers out there for everyone. And the more the providers work to enhance the industry, the better the product the consumer gets." BEST RATING SYSTEM This is why Kohl does not recommend a rating system for spas. "The best rating system comes from the customers," he says. "If the spa is not a good one, people will not come back and it will die before you could award any stars or diamonds." The number of customers is swelling tremendously, particularly among day spas. "We are more than a $13 billion annual industry," Kohl said. "Probably ahead of cruising. Three years ago we were the fourth largest sector of the leisure industry and we have become much stronger. We are a major, major player in leisure." DAY SPAS ”The exploding growth of the day spas is probably much greater than we know in terms of response to our studies. The reality is that spas have already captured the ethnic market; we just haven't captured the statistics," Kohl said. DESTINATION SPAS He sees destination spas, those that are set aside purely for an intensive spa experience, declining "because people are not taking 7-14-day vacations. The fast paced population wants to relax quickly and move on. Now you're seeing Canyon Ranch in Tucson allowing people to come for a day; a few years ago they would have laughed at you." Kohl notes that resort spas are appealing to people in certain economic demographics, but adds that he believes it is not money, age or profession that primarily define a spa-goer. "It's really how much they know about the benefits of going to spas," he says. "The more they know, the more they will take it up. If I were opening a day spa I'd want a big population of people making $25-35,000 a year. The ladies would all want to get their nails and hair done and you could build it from there," he said. MEDICAL SPAS The segment he sees evolving most dramatically during the next five years is the medical spa category, in all its variations, from mineral baths to cosmetic surgery. "This is long, long overdue," he stated. "People are much more willing to get annual checkups and take care of themselves in a nurturing atmosphere, and this is where there is potential for working with the insurance companies." GENERATIONS OF SPA-GOERS He says spa growth will be staying in its current upswing during the next five years, not only because of the boomers' reluctance to age traditionally but because the generations behind the boomers are avid spa-goers for relaxation and regard the spa experience as a part of life. NO RISE IN PRICES Despite the growth of spas and the spa-going public, Kohl does not predict a rise in pricing for spa treatments. "I think we've hit a ceiling on pricing of services and we're holding steady," he stated. “Some places charge $150 for a massage and I don't know how much higher we can go. What I do see is yield management, especially at the resort spas, with different pricing for off-peak periods."