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Tue, June 19, 2007 : Last updated 20:59 pm (Thai local time)



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Home > Business > The recipe for global spa success





The recipe for global spa success

Two government agencies have a joint secret recipe to make spas the rising star of the SME sector.

The Office of Small and Medium Enterprises Promotion and the Office of Small and Medium Enterprises Development call it "Thai Spa to Global Market".

The main ingredient is "character", they say, with a great business model being the menu.

The desired effect of the whole spread: to compete with international spas on the global stage.

First, the offices are looking to take on spas in Shanghai in China, the Middle East and Russia.

Right now in this country, the spa business suffers from the same political and economic depression denting all entrepreneurial confidence. Yet, in the global arena, spas are a huge opportunity - with potential for success such as Thai restaurants have enjoyed.

Nevertheless, they are faced with intense competition from Indonesia, Malaysia and the Philippines. These neighbours want to get in on the fad, too.

To conquer this up-and-coming business opportunity, Thai operators need to be competitive. This is where the offices' recipe comes in.

It intends to open 30 premium spas in Shanghai, the United Arab Emirates, Qatar and Russia.

Development office expert Tanan Aphiwanthanaporn says spas from this country have gained global acceptance for their "touch and wisdom".

The two offices have selected spas from Phuket, Krabi, Koh Samui, Chiang Mai and Bangkok. All offer quality services, are unique and have a solid foundation in local culture.

Now, they need management to meet exacting international standards.

Blending good management with local knowledge will increase competitiveness, Tanan says.

"In the global arena we won't sell only management, because people can find that anywhere. What we will do is put the spirit of spa A into the management of spa A," Tanan says. This is the business model the office is hoping will take the world by storm.

"We need to adjust business models to fit the international market. Many foreign investors want to take Thai spas to the international market.

"But we won't export Thai spas separately. Instead we will export them in the form of a business package - just like Western people export their fast-food businesses to Thailand. You have to buy the whole chain. Thai spas should be exported like that."

Next ingredient on the recipe is to select investors in targeted countries.

"We will invite local investors from Shanghai, the United Arab Emirates, Qatar and Russia to give us in-depth market information - including the behaviour of local consumers and legal information. 'Know them, know us' is the key," he says.

Previously, spas from this country trying to break into the international market have found the going tough and not easy to go it alone.

A big budget is not sufficient.

The proof of this pudding is in the eating, the two offices explain. And that means attention to detail. There are many complicated details that require investors to take risk.

Dialogue with international investors is a great way to prepare. After this preparation is complete, it is time for "business matching", according to the offices' recipe.

This needs the cooperation of the Export Promotion Department. It can get spa operators together with "the real targets" - hotels, tourism-related businesses and real-estate developers.

"Having local partners who are really good for the business is our mission," Tanan says.

Dr Orawan Kijchawengkul - owner of BCD by Dr Orawan, one of the 30 spas - says many international investors have approached her.

But, being a spa expert is not enough. One needs to know the legal and investment processes, she adds.

One needs to be able to trust overseas business partners, too. She expects the offices' business strategy to help her enormously.

Thai Spa Association president Andrew Jacka believes "culture" is the great advantage of Thai spas. It is a key to success. Thai generosity is what people the world over are looking for, he says.

"Developed countries want modern spas equipped with modern technology. Meanwhile, other countries - where the spa business is in its infancy - suit relaxation spas. The Thai spa can serve both markets," he says.

The two offices and the association expect local spas to be exported in the form of "software", rather than investment.

They expect local operators to "invest in terms of operation and management, human resources and reputation" while letting local investors in other countries build things. This will decrease risk, they say.

The Thai Spa to Global Market project got under way earlier this month. Workshops and seminars will continue until the end of the month. The cost for all this will be Bt10 million.

Next on the menu is expanding the number of overseas Thai spa stars by another 100.

Cheerawat Khongkaew

 

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