Spas are becoming big business in China, with its ancient tradition of massage, of bathing, of seeking Taoist harmony and balance. Now, foreign spa operators are diving in, with more on the way. Health and wellness are a growth industry in China and with 1.3 billion bodies to be pampered, spa industry experts see billions of dollars in their future. Echoing the Manchester cotton manufacturers of the 19th century, they imagine that if even 1% of the population get one spa treatment a year for RMB300 (US$37) that's RMB3.9bn (US$480m) annually.
The spa boom is fueled by the expansion of foreign businesses and the influx into China of foreign professionals familiar with spas, by the growing tourism industry and hotel construction, and by the rising incomes of Chinese professionals. It is also fueled by preparations for the 2008 Olympics with Chinese people thinking more and more above sports and fitness. The Olympic Games mean more hotels, and today hotel operators everywhere immediately include spas in their plans, from basic massage through to high-end aroma therapies. Independent spa operators already in China are planning more spas and new operators want a slice of the pie.
Spa operators
Hotels usually are not the spa operators, most of whom contract separately with the ultimate hotel owners, in China often state-backed property companies. The exceptions are Shangri-la, which usually owns its own hotel real estate, and JW Marriott, which has launched its own Quan brand spa in Sanya, Hainan Island. A major spa operator is Singapore-based The Banyan Tree, which has a spa in Shanghai's Westin Hotel and plans to open a resort in the northwest of Yunnan province in September. Bangkok-based Mandara Spa, with facilities in Shanghai and on Hainan Island, has signed two contracts to open a third spa in Beijing at the end of this year and a fourth spa in Shanghai in the middle of next year. Mandara's plan is to target all major cities in China as well as to have multiple locations in the cities, especially in Beijing and Shanghai. Brilliant Spa near Kunming, Yunnan province, is building a five-star hotel to open in 2006.
Reliable statistics on facilities and clientele are hard to come by for the Mainland where there are major spas, medium-sized day spas and likely hundreds of thousands of massage parlors and beauty parlors offering facials. But Linda Au, director of sales and marketing for Spa Resources Asia Ltd of Hong Kong, a trade, promotion and consulting organization, estimates that today there are about 40 brand-name spas in China in more than 75 outlets, up from about 25 brand-name spas in 2003. Today, 32% of them are in Beijing and 36% in Shanghai; 70% of them are located within hotels.
From 2001-2002, there were approximately 1m spa visits in China and Hong Kong (Mainland figures were not disaggregated), according to Spa Resources Asia Ltd. Current figures were not available, but Au conservatively estimated an annual 10%-20% growth in clientele for the past few years, with similar increases expected well into the future.
"The spa concept in China is still at the baby stage," Au said, adding there's a lot of room for growth and new concepts to be implemented. Industry experts and operators predict China will eventually become one of the world's top spa destinations.
According to Intelligent Spas 2002 Spa Industry Survey Program, 41% of the spa visits were from international tourists; the rest were local Chinese and foreign residents. So local expats and tourists are still the largest portion of clientele at name-brand spas, but Au predicted the local/foreigner share will shift to 50-50 over the next few years.
Industry sources estimate that by 2007 there will be more than 200 day spas and hotel spa outlets in China, adding that spa treatments increasingly are viewed not as a luxury but as a regular health maintenance routine. Since local Chinese do not yet tend to have sufficient knowledge to run a full spa, the big international investors will dominate for the time being. But sooner or later, as local Chinese learn the techniques, Chinese-run medium-size day spas are expected to take over the leadership position in the China spa market.
Prices at major international brand-name spas in China are comparable to others in Asia but lower than prices at many spas in the US and Europe. A reasonable price for a full, high-standard body massage, is US$62-US$100, depending on the products and expertise of the therapists. Prices are somewhat lower for local day spas on the mainland than in Hong Kong.
Major areas of expansion are second-tier cities like Xi'an, Hangzhou, Tianjin, and the major frontiers are tropical Hainan Island in the South China Sea, already dotted with brand-name resorts and spas, as well as Yunnan province in the south, wedged between the Tibet-Qinhai Plateau and Indo-china – possibly the best-kept spa secret, but not for long. Yunnan is considered by many to be the land James Hilton called "Shangri-la" in his novel Lost Horizon.