Four Seasons SPA. Luxury Hotels

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Four Seasons SPA is currently integrated in the globally recognised chain of luxury hotels, offering high-quality services to their guests. However, the reality of modern business environment requires constant development on behalf of successful companies in the Wellness market. In addition, there new rules of the industry entailed by the Covid-19 pandemic and the related restrictions. Nevertheless, it appears possible to utilise the opportunities, which have emerged recently, in the light of Four Seasons’ SPA innovation potential. The present study proposes a comprehensive framework of short-, mid, and long-term innovations, which will allow the company to retain its customers and continue to grow despite the new challenges. The discussed innovation system comprises a series of steps, from a global customer database to a separate, cutting-edge technology-based chain of SPAs. It utilises the existing technological potential, which has acquired additional importance due to pandemic-conditioned personal contact restrictions. This way, Four Seasons SPA will remain a leader in the Wellness market, as it will build a fresh, independent image of a company, which combines rich traditions with technological breakthroughs.

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Introduction

Service industry, in general, is a complex system, which comprises multi-level relations between various groups of people. Direct customer contact is one of the distinct features of this area, which includes SPA and Wellness. Accordingly, once the Covid-19 novel coronavirus entailed a new age of severe restrictions in terms of international travel and personal contact, this sphere experienced a particularly negative impact. Four Seasons SPA is one of the major players in the segment of Wellness, but it owes a considerable portion of its success to the hotel and resort chain. However, the current situation has led to increased attention, which is devoted to the innovative potential of Four Seasons SPA.

Overall, while the global image of the hotel chain often leaves Four Seasons SPA in its shadow, it appears possible to utilize the immense capabilities of the entire organization. In fact, Four Seasons Holdings have been actively pursuing innovation opportunities. For example, the guests of their facilities can enjoy remote and efficient services provided via Four Seasons Chat available via SMS, the Four Seasons app, Facebook Messenger, or WeChat (The Innovations Putting the Four Seasons at the Forefront of Their Industry, n.d.). Nevertheless, the process must continue on a larger scale, using the advanced technology of today. Verena Lasvigne-Fox, a Four Seasons’ SPA director, says: “as we become more connected with high-tech innovations that consume our everyday lives, I am thrilled to create a spa program that helps our guests find balance” (Verena Lasvigne-Fox, n.d., para. 1). Therefore, the key to successful development of the SPA chain lies in a combination of professional human experience and innovative technological advancements.

Impact of COVID-19 on the SPA Industry

The SPA industry, along with the overall hospitality sector, has suffered from the restrictions imposed following the Covid-19 outbreak. Accordingly, the sector has to rearrange its activities in order to adjust to the new reality (Navarette and Shaw, 2020). The pandemic poses a range of challenges, to which organizations must respond effectively.

The Four Seasons SPA has been affected by the same negative factors its global counterparts have. Centorrino (2020) states that the world has faced unprecedented challenges due to the pandemic. The SPA industry has been placed under particular restrictions, as their role is not deemed as essential, while it creates favourable conditions for the transmission of the virus. For example, Han (2020) investigates a major COVID outbreak, which began at a local SPA facility. Four Seasons venues are located globally, but international travel has been experiencing extraordinary restrictions, following worldwide travel bans. Kitamura et al. (2020) refer to the example of the Japanese tourism sector, which has seen a 93-per cent decrease in foreign visitors. In order to respond to the new challenges, Four Seasons had to reorient its activities, focusing on its unique online shop of quality linens and bedding (“Four Seasons at Home,” n.d.) This way, the company offers remote services to its guests while adjusting to the new pandemic-determined reality.

Analysis

The 4 P’S of Innovation for Four Seasons

The 4 P’S of Innovation for Four Seasons.
Figure 1, The 4 P’S of Innovation for Four Seasons.

While the COVID-19 pandemic has entailed major challenges for the industry, new development opportunities emerge. In fact, the companies, which manage to utilise the innovation potential created by the restrictions and the growing importance of the online environment, can achieve substantial success. In the modern business environment, innovation is determined by four P’s, which are Person, Product, Process, and Press (Figure 1). In the case of Four Seasons, the company’s management represents the Person aspect. Smith and Wallace (2020) emphasise the importance of positive employee experience in the SPA industry, as people must remain motivated to develop a new product in such challenging times. Accordingly, the product of innovation will be the unique, technologically advanced experience for the customer of Four Seasons. The Press aspect concerns the business environment, which is currently determined by the pandemic and its lasting consequences. Finally, the process of innovation reflects the spirit of the product, comprising new IT solutions.

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The Cultural Web of Four Seasons

Developing a comprehensive cultural web will be another important point in analysing the prospects of Four Seasons in the era of COVID-19. The Cultural Web paradigm comprises six points presented in Figure 2: Stories, Rituals and Routines, Symbols, Organisational Structure, Control Systems, and Power Structures (Mind Tools Content Team, n.d.). First, Four Seasons has an impeccable reputation in the sphere of SPA and hospitality, which is why its customers expect services and products of exceptional quality. Second, the company’s logo is its primary symbol, making it recognisable worldwide. Third, as Four Seasons is a multinational company, it has a strict hierarchy at all levels of interaction, making it tightly controlled both globally and locally. Finally, the company’s management wields power over potential innovations, but, according to Four Seasons, all decisions are made in the light of customer experience (“Information Regarding COVID-19 Situation,” 2020). Therefore, the customers determine the culture of Four Seasons, along with its development and innovation strategy.

The Cultural Web of Four Seasons.
Figure 2, The Cultural Web of Four Seasons.

Technology Diagnosis

Modern innovations are highly demanding in terms of technological aspects, as their development rates have reached unprecedented levels. The current COVID-19 pandemic has entailed restrictions, which aim at reducing interpersonal contact to a minimum (Rodríguez-Antón and del Mar Alonso-Almeida, 2020). Simultaneously, people and entire organisations have recognised the vast potential of the online environment. Accordingly, the innovation potential of Four Seasons relies on the Internet and its immense opportunities in terms of global communication and product distribution. As mentioned prior, the present situation prevents Four Seasons from accommodating as many customers as previously, and SPA facilities barely function globally. Consequently, the company can reorient its activity toward an online shopping system, offering its customers familiar comfort of the renowned chain even amid a pandemic. Four Seasons has the required technological means, as the Internet creates an opportunity for organisations to ensure the stable functioning of such systems without large expenditures. However, further implementation of advanced technology may be more demanding in terms of knowledge and IT solutions. Overall, the innovative path of Four Seasons is highly promising in terms of potential benefits at a low cost.

Network

The organisational network of Four Seasons is large, comprising a chain of hotels and SPA facilities across the world. The history of the company began in 1961 when it opened its first hotel. Isadore Sharp, the founder of Four Seasons, remains the chairman of its Board, ensuring the original vision behind the company continues to determine its development and innovation (“About Us,” n.d.). Overall, the chain comprises over eighty hotels across the globe, but the vast majority of them are Four Seasons’ franchisees. Therefore, while the Board plays a role of paramount importance in setting the strategy and making the policies, many aspects of the company’s functioning depend largely on local facilities. Within the organisational network of Four Seasons, local hotel and SPA managers remain crucial elements of the system, ensuring the connection between its customers and global policies of the franchiser’s Board. Therefore, local representatives will be pivotal in the process of innovation, as the exact action plan for each location may vary depending on the area’s particularities.

The current structure of the business model of the Four Seasons SPA

Before the COVID-19 pandemic, Four Seasons demonstrated the typical features of a luxury, customer-oriented organisation. Its impeccable reputation combined with exceptional expertise allowed the management to offer higher tariffs than the rivals. However, the SPA and Wellness services were mostly available to the guests of the company’s hotels.

Current business model.
Figure 3, Current business model.
SWOT Analysis
SWOT Analysis.

Competitors Analysis

The industry of SPA and wellness has demonstrated significant growth over recent years. According to the report prepared by Mordor Intelligence (2020), developed society increasingly focuses on recreational services, and related expenditures also continue to grow. Considering the colossal development opportunities in this sector, SPA and Wellness attract multiple organisations, attempting to conquer their share of the market. According to Mordor Intelligence (2020, para. 4), the list of key players comprises “Hot Springs Resort & SPA, Emirates Palace Spa, Four Seasons Hotel Limited, Planet Beach, Lanserhof, Massage Envy, Jade Mountain, and Marriott International”. Figure 2 demonstrates the positioning of Four Seasons in the SPA and Wellness industry, providing a better understanding of the competitive forces affecting the company. According to the analysis, Marriott International appears to be the primary rival of Four Seasons SPA.

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Four Seasons SPA Market Positioning
Figure 4, Four Seasons SPA Market Positioning (Mordor Intelligence, 2020).

While Four Seasons’ exact financial performance, which is a private company, remains unknown, it is safe to assume that the current situation has negatively affected it. However, twelve years ago, the world experienced another economic crisis. According to the Hostfully Team (2020), the entire service industry was still in recovery mode by 2008 following the 9/11 attacks and other challenges of global terrorism. On the contrary, the market was in a completely stable position at the start of the current crisis. Nevertheless, the situation remains complicated due to global restrictions in terms of personal communication. In 2008, people could not afford expensive trips and SPA sessions, but the 2020 crisis has forced multiple facilities to be closed. In this case, the best recovery strategy for Four Seasons would be to utilise the funds accumulated before the current crisis by investing them in innovation. It is possible to expect that Four Seasons will expand its operations online by allocating additional electronic commerce resources. Such an approach will alleviate some of the negative consequences and introduce a hybrid model of business.

Innovation Ambition Matrix and Innovation Portfolio

A company’s innovation portfolio comprises all the areas in which potential changes are possible and likely to yield positive results. According to Nagji and Tuff (2012), balance is the key to a proper innovation portfolio. Global business experience suggests that well-performing companies should allocate 70% of their innovation resources to core opportunities, 20% – to adjacent areas, and the remaining 10% – to transformational initiatives (Nagji and Tuff, 2012). The emphasis on the Core segment is logical since innovations in this segment will be based on the company’s current achievements, which have been defining its success. However, in the contemporary business environment, it does not suffice to develop the existing assets. 20% of the company’s innovative resources must be applied in the adjacent areas, thus expanding its opportunities. Simultaneously, Four Seasons has the potential to achieve an actual technological breakthrough in the SPA industry if the chain’s potential is utilised effectively. Accordingly, the remaining 10% of the innovation portfolio will be attributed to transformational initiatives. Figure 3 specifies Four Seasons SPA’s innovation opportunities in all three segments of its Innovation Ambition Matrix.

Four Seasons’ Innovation Ambition Matrix.
Figure 5, Four Seasons’ Innovation Ambition Matrix.

Transformational

Four Seasons SPA boasts a new menu of hyper-personalised and efficacious experiences. However, today’s changeable and competitive environment demands more profound changes and innovations. As discussed previously, the company’s SPA facilities are tightly connected to its hotels. Four Seasons SPA can transform its image by establishing it as a separate chain to ensure the stable development. This way, the Wellness services will be available to a broader audience in various locations.

Adjacent

Four Seasons already has an online store, but its further development amid the pandemic will be beneficial. Luxurious Home SPA Kits can be added to the store and sold for the customers to experience the comfort of Four Seasons SPA remotely. The brand has already introduced its most intelligent gym with a personal trainer available in-room on command. This area can be expanded further using an advanced AI-based robot for personalised massages (The finalists of the KUKA Innovation Award 2019, 2019). Finally, Four Seasons actively uses online communication via messengers. Modern technological advancements allow the company to introduce a system of automated check-ins and check-outs. This way, guests will avoid formalities and concentrate on the relaxing experience. Such automated systems can be particularly relevant today, as the pandemic requires reduced personal contact.

Core

Four Seasons SPA are currently integrated into the company’s global chain of hotels and resorts. As the facilities are dispersed worldwide, it is possible to utilise this situation by introducing a comprehensive customer base and a CRM system. People who visit different SPA facilities worldwide will have their preferences recorded and used in the further experience.

Innovation Opportunities

First, a comprehensive customer database appears to be a logical choice of short-term innovation. Four Seasons SPA offers a luxurious experience, and its customers enjoy the feeling of a distinct, bespoke experience. Additionally, the company’s Wellness unit can implement a loyalty reward program, as similar initiatives are used by multiple tourism and travel organisations. A comprehensive database of customer preferences and requirements will enable a range of improvements in the short term. Four Seasons SPA guests will feel acknowledged and satisfied by the new, personalised services. Moreover, such a CRM-based system can prevent serious health-related incidents, as it will contain each customer’s history of treatments, procedures, and allergies.

Luxury Home SPA kits can be sold via the existing online shop of Four Seasons, presenting another short-term opportunity. SPA facilities across the globe have been closed for months, which has negatively affected their financial performance. Many people have been missing the relaxing experience, and even more of them have been unable to travel and stay at Four Seasons locations. Moreover, there are those who remain conscious of the coronavirus and avoid public spaces. Luxury Home Wellness products will allow Four Seasons to encompass larger market segments through remote sales. This way, the company will maintain a stable presence during the pandemic.

Artificial Intelligence (AI) and massage robots utilise the potential of modern technological advancements. In the time when personal contact is supposed to be limited, society has recognised the vast opportunities, which lie within the sphere of AI. The machine is regularly washed and sanitised, and the threat of the virus spread is decreased. Such innovation will positively affect Four Seasons SPA’s image as a revolutionary company not afraid to test new technology in the mid-term. Moreover, broader implementation of robots will allow the company to economise on salaries and invest in new products.

Automated check-ins and check-outs also appear particularly relevant in the time of Covid-19. In addition, such systems are more efficient, reducing the queue time and allowing customers to concentrate on relaxation instead of formalities. Similar models already function and provide profits in hotels, providing a sufficient evidence base (Self-service check-in and check-out for hotels, n.d.). Automated reception areas will be able to function twenty-four hours per day, balancing the staff workload. Many guests stay at hotels during work trips, which means that they would only be able to enjoy the SPA outside of general working hours. This initiative will be particularly effective in combination with AI technology and online database, if implemented in the mid-term.

The most ambitious, long-term innovation proposed for Four Seasons SPA will be launching the Wellness chain independently of hotels. There is a growing demand for quality SPA services, but the company in question remains underrepresented on the global market. It is mostly to Four Seasons hotel guests, as of now, and opening independent salons will open the company to those who do need or cannot afford to stay there. For example, it might be logical to open the first independent locations in wealthier areas, such as Beverly Hills, Hollywood, central Paris, and London.

Four Seasons SPA Innovation Challenges and Risks

The proposed changes may face individual barriers in each scenario. First, creating a global customer base is a challenging and time-consuming process. In addition, personal data security must be ensured, as the fear of a lack thereof may cause opposition from conservative customers. Second, Luxury Home SPA products may be relatively cheap and easy to make using the existing resources of Four Seasons, but this innovation requires considerable marketing expenses. In other words, such innovation must be presented to the public unfamiliar with the offer.

Third, AI-based technology and automated check-ins reduce the service’s personal component, and Four Seasons SPA is famous for its qualified workers. Finally, launching a separate, hotel-independent chain of Wellness facilities will be an expensive endeavour due to high purchase and maintenance costs. Besides, there is a need for qualified experts in this area, requiring either global training programs or outsourcing programming specialists. In a way, this project is similar to starting a new company, which will require considerable efforts in terms of marketing, branding, and development. As for overarching barriers, Scott et al. (2019) refer to organisational inertia as the most serious impediment in the way of innovation. Therefore, Four Seasons management will have to ensure that all innovative ideas are clearly understood and endorsed by the company’s organisational chain’s key elements.

Recommendations

Considering all the factors presented and discussed above, it is possible to devise a set of particular recommendations for Four Seasons SPA. Current restrictions limit direct personal contact, which is why the focus of the public’s attention has shifted toward the online environment. To counteract the effect of potential barriers, Four Seasons SPA should implement in due time-specific measures, which are as follows:

  • Production and sales of Luxury Home SPA products must begin in the near future via the electronic shop, and the first quarter of 2021 appears to be an optimal choice.
  • The development of a global customer database will take considerable time, but it appears possible to implement its pilot version by the third or the fourth quarter of 2021 to evaluate the effect.
  • Self-service check-ins/outs and AI-based experience present certain risks, which is why their implementation must be executed with caution. Four Seasons SPA can test these initiatives at several diverse locations in order to assess the degree of customer acceptance of the idea, as well as its efficiency and economic feasibility.
  • Launching an independent Four Seasons SPA chain will be the most demanding, yet the most promising initiative. This is a long-term proposal, which will encompass the period between 2021 and 2025. First, in-depth market research and marketing campaigns must provide a solid foundation for the project. Next, using the accumulated financial potential, Four Seasons SPA will be able to extend its operations by 2023-2025, conquering a new market segment.

The future structure of the business model of the Four Seasons SPA

Future business model P.
Figure 6, Future business model P.

ost-Covid Four Seasons SPA can benefit from expanding its online presence, thus opening the company to a larger audience. The new business model must rely on the advanced technological opportunities of the 21st century, while retaining the company’s person-centric values and ideals.

Conclusion

The case of Four Seasons SPA is representative of the entire high-end Wellness segment. The current Covid-19 pandemic has brought unprecedented challenges in the industry, while highlighting the importance of quality innovations. The increased attention to technology creates new opportunities in terms of high-tech service implementation, and Four Seasons must utilise them effectively in order to remain strong in the 21st century. Most of the company’s innovative efforts should focus on expanding its current service capabilities through, for example, introducing a global customer database in the near future. However, adjacent opportunity areas also remain important, as a more extensive use of high-end technology, such as AI, demonstrates excellent potential. As Four Seasons SPA continues to develop its services, it may be able to become an independent player in the Wellness market, existing outside of the hotel chain.

The vast innovative potential of Four Seasons is supported by the company’s immense financial opportunities. Its impeccable reputation and positive global image enables a stable revenue stream, making it one of most commercially successful organisations. Nevertheless, the company’s management must proceed with caution, as today’s competitive business environment leaves little room for mistake. Some of the proposed solutions become too revolutionary for some of Four Seasons SPA’s conservative customers. Accordingly, in-depth analysis of the market is required at each stage of the innovation chain. Overall, the correct implementation of proposed ideas will allow Four Seasons SPA to strike the right balance of personal experience and high-tech development, securing its leading position as an independent Wellness service provider.

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