Healthy growth in spas from coast to coast

Number of facilities in Canada nearly doubled between 2002 and 2004, new report shows

By ALBERT WARSON

Tuesday, May 31, 2005 Page B8; Special to The Globe and Mail

Spa developments across Canada have been massaged by at least $2.5-billion worth of investment, with developers expanding facilities from the Cariboo region of British Columbia to a former monastery in St. John's.

Relaxation, wellness and pampering has become a huge business. Over the last two years alone, the number of spas across Canada has nearly doubled, according to the latest International Spa Association (ISPA) study of the North American industry.

One industry expert expects growth of 20 per cent or more annual growth, especially in condo-hotels, resorts and prominent office towers in Canada. And foreign interests are grooming the industry for more expansion.

The industry has matured to the point that one of Canada's leading spa schools expanded to a 20,000-square-foot space in Toronto.

The $2.5-billion investment figure is based on ISPA's estimated 12.5 million square feet of spa space across the country, and industry estimates of $200-a-square-foot building costs. This excludes land and equipment, and depends on location.

The costs can soar to closer to $350 a square foot, depending on the level of wall and flooring finishes, lighting and general decor, says Gordon Tareta, director of spa facilities at Hyatt Hotels Corp. in Chicago, which operates spas in its Toronto and Calgary hotels.

Spa operators are making those kinds of investments to cater to a huge market of people "who want to look or feel younger, want relaxation, and possibly need services offered at medical day spas, which have grown at a rate of 100 per cent in recent few years," he says. (Medical day spas operated by doctors can offer botox injections, and other services beyond what estheticians can offer.)

Vivienne O'Keeffe, president of Vivienne O'Keeffe & Associates Inc., a Vancouver-based spa consulting company that helps develop spas from the ground up, foresees "phenomenal spa growth in [upscale high-rise condos and condo-hotels], resort and destination spas, and in office towers in Canada. There could be, conservatively speaking, a 20-per-cent increase in that growth."

There is also foreign interest: Chinese, U.S. and European investors have contacted her firm about developing spas in Canada, she says.

Although healing and rejuvenating facilities date back to early civilizations, spas in their modern incarnations -- day, destination, hotel or resort, or medical -- are a recent phenomenon as a new type of property development category.

The latest spa association study indicates that the number of spas in Canada increased from 1,200 to 2,100, and revenue rose from $610-million to $1.1-billion, between 2002 and 2004.

In 1982, Sherry Brydson, a health and wellness entrepreneur, opened a private women's club with a small spa and Thai restaurant in what was originally a YWCA residence in downtown Toronto.

Today, the Brydson Group Inc. health and wellness empire, which she runs from Victoria, is renovating the four-storey, 38,000-square-foot building -- now one of the largest day spas in Canada.

The company also owns one of Canada's leading spa schools, the Elmcrest College of Applied Health Sciences and Spa Management in northwestern Toronto, which aside from teaching massage therapy and esthetics, has developed a leading-edge spa management program, according to industry association Leading Spas of Canada.

The school helps meet the surging demand for trained spa personnel, and Ms. O'Keeffe, who helped design the college's curriculum, hires its graduates to staff international clients' spas. The college outgrew a 7,000-square-foot building and acquired a 20,000-square-foot former factory in northwestern Toronto for $1.8-million. The renovation cost $5-million.

Paul Stevens, a principal of Toronto-based ZAS Architects Inc., who designed the renovation and interior design, says the college is "an excellent example of how a vacant, run-down factory on a well-located urban site can be stripped to its bare bones and rebuilt. We installed three turret-style skylights to allow natural light to penetrate, rebalanced the floors and replaced the roof, in an energy and technologically efficient building."

The lobby contains a ceiling-high waterfall fountain and the layout of therapy rooms were designed with the advice of a master from Victoria in Chinese feng shui layout design.

Although a certain hesitation characterized some earlier spa projects, the public's increasing use of these facilities is emboldening developers from coast to coast.

In St. John's, Paul Madden, a suburban infrastructure and commercial development builder and developer for 20 years, and more recently president of Spa at the Monastery and Suites, expects to start construction in June of a $2.4-million, 20-suite luxury spa overlooking the ocean.

The project is about 20 minutes' drive from his first spa venture -- an abandoned 10,500-square-foot monastery in the downtown core of the provincial capital, which he bought, redeveloped and opened in 2001.

Then he acquired an adjacent religious school and turned it into a 20-suite property connected to the spa by a tunnel he added and which opened late last year. The two facilities cost about $3.1-million.

Mr. Madden recalls he had been "nervous about the [first] project" because he wasn't sure how Newfoundlanders would react. As it turned out, he needn't have worried.

"I started out with a staff of eight, now there are 63. We went from five days a week to seven days and then six evenings . . ." he says. "We had 265-per-cent growth from the first year to the next and it has only come under control last year."

There wasn't any opposition to redeveloping the former monastery and school, Mr. Madden says, because city planners and neighbours realized an upscale spa and accommodation with king-sized beds and fireplaces is infinitely more desirable than a parking lot, which was in the works. Nor would there be any traffic problems or disturbing noises, or late evening boisterousness because there is no bar.

On the other side of the country, Pat Corbett has also been in land development and construction for more than 20 years, and is president of Hills Health Ranch Ltd., at 108 Mile House, in the Cariboo region, more than 480 kilometres north of Vancouver.

His company opened a 26-room health and fitness spa in 1985, in a 25,000-square-foot central lodge it built on a ranch-style 20,000 acres, and added 20 Swiss-style chalets. Mr. Corbett says his spa attracts about 8,000 guests a year from across North America and abroad.

He intends to start work this year on a $50-million, 250-unit "health village" on the site, with regional government zoning and development application approvals in hand.

Given the rapid growth of the spa industry, it is appropriate that 108 Mile House takes its name from the stations on a road travelled by gold rush prospectors flocking to the Cariboo in the 19th century.

Spa speak
Averages for Canada from a 2004 industry study

Indoor square footage: 6,081
Revenue: $752,000
Annual spa visits: 10,090
Full-time employees: 9.9
Profit margin: 4.9%
Revenue/square foot: $148
SOURCE: INTERNATIONAL SPA ASSOCIATION

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