The Economy's Down, but the Spa Business Is Up

In tough economic times, Americans need to relax—and for one route to nirvana, may we suggest the Hamman ritual followed by a Joyambrosia massage at the new Joya Spa in Paradise Valley, Ariz. The treatment begins with a catnap on a heated platform, followed by a black-soap body cleansing. Then the steam room, a deluge of freezing water, a Spanish whirlpool and sauna, and finally a 90-minute massage. At $350, it may sound ridiculous, but Sylvia Sepielli, the consultant who dreamed up the concept for the regimen, says it's money well spent. "We can't control the economy," Sepielli says. "But we can control our bodies—how we react, breathe, eat and think."

As consumers pare budgets to survive the recession, perhaps no type of industry has as much to fear than the spa business. Once a refuge for the wealthy, spas expanded dramatically in the past decade. From 2003 to 2007, the number of U.S. spas grew from 9,865 to 14,615, according to the Spa Industry Association, while revenue jumped from $7 billion to $10.9 billion. But since September, high-end hotels, department stores and restaurants have seen revenues plummet, raising the question: will consumers keep dropping big money on indulgences like "coffee-and-frankincense scrubs"? To ensure they do, resorts turn to a small group of spa consultants, who devise new ways to knead muscles and goose revenues.

Sepielli, 57, is a tiny woman with thick brown hair. She has studied alternative healing methods in Japan, run a California gym, and since 1987 she's advised spas on design, staff training and stocking the retail space. But her forte is helping spas create a menu of services that, much like a restaurant's menu, keep tempting customers to spend freely. While massages deliver more than half of revenue at most spas, exotic treatments are still important, because they help lure in big-spending spa veterans.

Joya, which opened at the Montelucia Resort last month, is a perfect example. Inside the 19 treatment rooms, clients indulge in services that jibe with a Moroccan theme. The Saharan Oasis facial, for instance, uses lime tonic, pear, poppy seed, grapefruit, cucumber and plum. And for customers who choose not to order treatments à la carte, Sepielli created packages of treatments called Journeys that sell for as much as $995 for seven hours. As at most high-end spas, treatments often involve being smeared with a virtual Whole Foods-worth of fruits, veggies and spices. Consultants acknowledge that spas have gone a little overboard on the food-based treatments: Sepielli holds particular scorn for chocolate treatments, urging clients to stick with simple salves that have been used for centuries to treat what ails you.

Still, some rival consultants say spas' elaborate services—Joya offers a 24-page menu—are too precious. "It becomes overwhelming for the guest," says consultant Judy Singer of Health Fitness Dynamics based in Miami. Singer also worries that high-end spas are pushing the price limit. "If we don't look at this in terms of at what point pricing deters people from coming in," she says, "I think we're in for a downward spiral."

There's no sign of that yet. In an October survey, members of the International Spa Association claimed business was still strong: 40 percent said spa visits have risen this year. The industry likes to argue that while treatments like the Eight Hands Massage (that's four attendants, each working a limb) may seem like an anachronistic reminder of better times, the spa business has historically been countercyclical. But this recession may prove deeper than prior ones, and lately other "recession-proof" businesses have started to tank. Sepielli remains confident. "People aren't getting any younger, and they aren't getting any less stressed," she says. If she's right, her clients hope to keep the sugar-cane-and-coconut-milk body scrubs selling briskly no matter how long this downturn lasts.