The resort spa segment is expected to suffer along with the rest of the hotel industry post 9/11. The hotel industry is in a holding pattern; hotel companies and developers are modifying plans or postponing them indefinitely.

In a recent article in Meeting News entitled "Hotel development grinds to a near halt," The publication reports, "growth is minimal as hoteliers tightly grasp their cash supplies." "There's no way we're going to see substantial new development now", said Chase Burritt, National Director of the Hospitality Service Group at Ernst and Young: "Lending and equity markets need to see several quarters of improvement in hotel stock before they will support new projects."

Higher end hotels, the kind of hotels most likely to have a spa component, are the least likely projects to be moved forward. "The worst 300-plus room, full service hotels in major markets, it is a higher risk loan than a limited service hotel in Peoria," says Burritt. "These projects cost at least 45 million."

According to Pricewaterhouse Coopers, in the year 2001 there were 95,600 room starts, down from 120,800 in 2000. For 2002, the estimate is 39,300. "We think this is a temporary decrease, but it's an extraordinary one," says Bjorn Hanson, Chairman of the Hospitality and Leisure practice of Pricewaterhouse Coopers.