Is a spa a good investment?

Most corporate hoteliers provide some sort of leisure facilities, whether it's a gym, a small pool or an entire spa. Guests want them there, whether they use them or not, and serious conference bookers are unlikely to choose hotels with few facilities other than bedrooms.

But what about the independents? Is it worth making a huge investment in leisure at a time when trading is tough, and there are distractions such as staffing difficulties, the Working Time Directive and stakeholder pensions to contend with?

Brian Miller, general manager at Danesfield House Hotel & Spa at Marlow-on-Thames, Buckinghamshire, thinks it is. Furthermore, his view is that if an independent hotelier is going to invest in a facility then it should be a good one, with no expense spared. "I've seen so many hotels where a gym is just a few machines in the basement somewhere," he says. "That's a poor use of space that makes no business sense at all."

When Miller joined Danesfield House from Orient-Express Hotels in 1994, the hotel had been in receivership for four months. Miller's brief was to turn it around, and make it more than just another country house hotel outside London. The answer, he decided, lay in a state-of-the-art spa and leisure facility.

The plan was for the local market to provide instant cash-flow for a facility that could be equally appreciated by hotel guests. "We realised the catchment area around Marlow provided a huge source of wealth," Miller says. "But these people were already members of a gym, or were used to spas. For local members, we would have to have the best of everything to satisfy and retain them."

The finished product consists of a 20-metre indoor swimming pool; eight treatment rooms; a hydrotherapy suite; a fitness studio with TechnoGym equipment; a Zen studio for lifestyle classes; a sauna; a steam room; a whirlpool; a solarium; and relaxation and refreshment lounges.

At a cost of £300,000, the pool took a substantial chunk of the £3.2m investment. It's cleansed by ozone, which cost £60,000 more to install than a conventional chlorine system. Miller also hired four theatre artists, more familiar with painting sets for the Royal Opera House, to paint murals around the pool - that alone cost £75,000 and took the artists nine weeks to complete, mainly at night, once the dust from the building works had settled, and to the strains of classical music in the background.

The spa opened on 9 October 2001. Miller was relieved that the schedule was so well advanced that it wasn't put on hold by the events of 11 September. "Timing is everything with these kinds of plans, and we were lucky," he says.

Eighteen months later, the spa has 408 members, each paying £1,260 a year. Membership is capped at 450, a constraint placed by the highways department when planning permission was granted, to ensure that local roads wouldn't become congested.

Of course, the spa isn't just there for outside members - hotel guests also make good use of it. The complex is linked to the hotel by a £200,000 internal bridge so guests needn't make a mad dash from the main building in their dressing gowns.

Also proving popular are the spa indulgence weekends, with packages selling for up to £310 per person including treatments, two nights' accommodation and breakfast.

This repackaging has had a huge effect on achieved room rates and occupancy, particularly at weekends. Miller won't reveal exact figures but he says that average achieved room rates went up by £21 last year, compared with the year before, and that 72% occupancy is anticipated for this year. (Rack rate is £245 for a twin room, excluding breakfast.) Two nights, dinner, bed and breakfast for two people, with spa treatments, now yields an average spend of £800 at weekends, compared with £400 before the spa was built.

More affluent guests also spend more on food and wine. "I noticed immediately that guests were opting for the à la carte menu rather than the table d'h"te, and that they were choosing wines at £60 a bottle rather than just the £15 house wine," says Miller.

But it's worth remembering that spas are changing fast, and keeping up with technology and trends is critical. Already, Miller would plan it differently if he had to do it again now. For example, he would add a double treatment room for his-and-hers simultaneous treatments. On the downside, insurance premiums have increased by about 20% since the building of his spa, though the financial rewards more than compensate. In the first full year after opening, the spa's turnover was £900,000. Budgeted turnover for this year is £1.3m.

Don't scrimp on spa staff

One of the biggest mistakes hotel managers make when thinking about spas, says Brian Miller, is to try to do it on their own. "A general manager can't knock up a spa," he says. "You have to take expert advice and then hire the specialists to run it for you."

In the case of Danesfield, the specialist advice came from E'Spa, whose products are used in the spa. The company advised on the layout and flow of the treatment rooms, and then provided training for the therapists.

In total, there are 24 staff in the spa, making it the largest department in the business. The spa manager is counted as a head of department and attends all hotel heads-of-department meetings.

Miller also says that specialist spa staff tend to go to whatever facility is newest, so creating something different and exciting will help retain them.

10 tips if you're planning a spa

1. Visit the latest facilities around, not the most established, to keep up with the trends.
2. Employ specialists to put your plans into action.
3. Read all the leisure press (there are about six magazines a month) and truly immerse yourself in the leisure industry.
4. Lease equipment such as machines for the gym and sunbeds - that way, you can always have the most up-to-date kit.
5. Always go the extra mile. If you're thinking of investing £1m, then invest £1.2m - you need it to have the edge over your competitors.
6. Never underestimate safety. Every room in the Danesfield spa has a safety alarm-pull, and the non-slip floor surface used around the pool was two grades higher than was required.
7. Allow floor space in the gym for whatever new craze should hit the market. In the case of Danesfield, this space is currently used for Swiss balls (giant exercise balls, used to stretch abdominal muscles).
8. Decide on your policy towards children and stick to it. Danesfield doesn't let children under seven use the spa, as it could put off outside members.
9. Set up clear systems for the management of the spa. There are layers of bureaucracy involved, such as testing the water, and these details have to be kept on file.
10. Don't have one of those viewing galleries that make swimmers feel on display and uncomfortable.

The hidden costs

Installing a spa is just the beginning; maintaining it is expensive. Here are some approximate monthly running costs of the Danesfield spa.

Gas oil (heats the whole spa, swimming pool, etc): £1,600
Laundry: £3,000
Wages: £25,000
Electricity: £700
Gym equipment (lease payment): £2,400
Cleaning materials: £250
Consumables (soap, shower gel, pool chemicals): £1,500

And those towelling slippers that can be worn for all of two minutes and then have to be thrown away for reasons of hygiene? Believe it or not, they cost Danesfield a whopping £10,000 a year.

Vital statistics

Danesfield House Hotel & Spa
Marlow-on-Thames, Buckinghamshire

Tel: 01628 891010

Privately owned by: Malaysian businessman (name not disclosed)
Rooms: 87
Staff: 120
General manager: Brian Miller
Projected turnover, 2003 (total business): £7m
Business mix: corporate, 55%; leisure, 45%
Food: four RAC ribbons, two AA red rosettes