CEBU, Philippines - As times get tougher and clients start to decline, stakeholders from Cebu’s wellness sector are now actively giving out promotions and discounts tapping into new markets to maintain its client-base to survive the economic crunch.
In an interview with Johnie Lim, Spa and Wellness Association of Cebu (SWAC) president, he admitted that being in the service sector; the wellness industry is indeed hit by the current crisis and this is indicated with the slowdown of consumer spending on spa-related services which are considered to be less essential needs.
“Consumer’s spending has slowed down and we in the wellness sector especially the spa operators try our best to offset its possible impact to our business by continuing our promotional efforts such as giving lower and special rates,” said Lim.
He said that right now, they are starting to focus on corporate accounts so that they can still manage to maintain their client-base and traffic.
“There is still volume but people are now more conscious. We used to have clients that go to the spa every other day, now they just go to spa once a week. The frequency of availing spa services has reduced. Having a massage is already considered non essential at this point of crisis but there are still some who tend to find time to relax amidst pressures on their finances,” shared Lim
He said that right now, they give around 30 to 40 percent discounts on their corporate clients and they also practice special promos on off peak hours to still get the same volume of client traffic.
Lim said that aside from the downtrend in consumer spending, problems on high operating cost is also burdening their sector especially that their fixed costs increased.
In terms of rent, he said that this year this increased to 10 percent while business permit taxes also rose around 20 to 30 percent.
“We always get new business permits every year, annual fees have increased tremendously so some players especially the small ones could not afford this assessment,” said Lim.
As of the moment, there are already big spa players who have closed down operations according to Lim and some of them have also cut down the number of their branches.
For his case, Lim sold one of his company-owned outlets to a franchisee so that the number of spas will not increase further.
“There are a lot of players who did not survive because of lesser client traffic, huge expenses on rentals and taxes. Even high-end spas are suffering from less profit according to suppliers because even the affluent market has lessened its frequency of going to spas. Medium sized spas or urban spas have more chances to survive because they can be flexible with their rates,” said Lim.
He also urged new entrants to hold their plans of putting up a new spa business because it’s not viable to open at this point of crisis.
“Opening new branches is not viable at the moment. New players will find it difficult to compete and because of crisis existing spas are now wresting with the market so they should hold off their plans because the market is quite saturated,” he said.