Recession? Relax: Spas build sales through corporate clients

The consuming masses may be worried about making ends meet, but the luxury hotel spa industry is finding new ways to attract business. They're reaching out to corporations.

"Companies are looking for the perfect outing to entertain their best clients or reward their best employees," said Pamela Margolis, co-owner and president of the Hotel Ivy Spa Club in downtown Minneapolis. "You don't have to be good at spa-ing -- there's nothing to practice. It's more flexible than organizing a round of golf ... and it doesn't take six hours out of your day."

The club, which opened in February at the upscale hotel, is part of a national trend to help build sales by working the corporate angle. The aim is to grab a bigger slice of the smorgasbord of company perks. So in lieu of a coupon for a fancy steak dinner, theater tickets or day on the links, spas want businesses to think about a pedicure with a serving of strawberries and champagne on the side.

Spas are a $9.4 billion business in the United States, employing more than 234,000 workers, according to the International Spa Association. But traffic has been flat or declining in recent years, even as the number of spas has tripled since 1999.

A host of local companies already has taken up Ivy's invitation to indulge. General Mills recently offered up the spa as one of several "recreation day" options for employees attending a two-day company meeting. TPG Credit Management sent seven administrative staffers there as a reward for their hard work. A dozen members of the Minnesota Electrical Contractors Association scheduled a half-day retreat at Ivy's.

Most events appeal to women, though growing numbers of men are forsaking their machismo and settling in for the perks of a good pamper.

A networking event at the Ivy with appetizers and a handful of short spa services for about 30 people might cost around $3,300, including tax and tips.

Minneapolis corporate law firm Lindquist & Vennum was one of Ivy's first corporate clients. The firm held a networking event at the 17,000-square-foot spa and fitness center in late February for about 40 of its female clients.

The hotel, which has separate ownership, catered the drinks and appetizers. An assortment of mini-services -- a chair massage, reflexology foot rub, and an exfoliating hand and arm rub -- were there for the taking. The event ran from 4:30 to 7:30 p.m.

"A lot of our clients are working moms and they're juggling lots of responsibilities," said Barbara Wood, an attorney at Lindquist & Vennum who helped set up the event. "People liked the idea they could swing by at the end of the day and not have to rearrange their schedules."

The spa outing wasn't meant to replace the law firm's popular golfing event or its annual evening at Orchestra Hall, Wood said. But it was such an across-the-board hit that a meet-and-greet at the spa may become a regular offering.

"It's a challenge to find something that is unique and doesn't sound like a cliché," said Shelly Gertgen, the firm's communications manager. "This offered a top-notch experience that was self-nurturing and healthy, and at the same time allowed people to network and maintain those professional relationships. We had people writing to us and to their attorneys saying, 'I never get asked to do something like this.'"

But in an economy where retailers from Tiffany's to Starbucks are faltering, peddling the pampered lifestyle remains a hard sell.

That's why fitness memberships -- not corporate networking events -- are expected to make up the bread-and-butter of Ivy's business. Memberships are less labor intensive and provide steady and predictable income .

The fitness center has all the latest cardio machines -- including treadmills, bikes and step machines with individual cable television screens -- plus free weights, yoga classes and personal trainers. Memberships run $79 to $199 a month, with the high end offering valet parking and discounts on spa services.

Urban hotel spas, such as the Ivy, typically benefit from convention visitors and business travelers staying downtown, according to a study from PKF Hospitality Research. Right now, about 75 percent of the Ivy Spa visitors are split between day guests and corporate events, said Breanna Wagner, Ivy Spa Club's sales and marketing director.

Wagner said even as the Ivy Spa focuses on increasing membership, she'll continue to pitch spa services to managers in human resources, health and wellness or marketing and events planning.