Hints of recovery from the spa industry:

Though the recession that began in 2001 will probably not end in 2002, the first quarter is showing distinct changes in the San Francisco Bay Area. By February 2002, spa-goers in the Bay Area were embracing the benefits of stress relief and self care with renewed vigor, and demand was already on the rise. Pent-up consumerism and a desire to 'live in the moment', enjoying life fully were psychological themes that seem to be stimulating spa activity. At Preston Wynne, January sales yielded the first same-month sales growth in close to a year.

Yet unemployment is still on the rise, and the tech sector continues to sag. What's up? Writes Dr. Sung Won Sohn, Executive Vice President and Chief Economic Officer of Wells Fargo Bank in the, 'Facing
uncertainty, people expect the worst and stop spending money. With more information, however, individuals assign probabilities to potential outcomes, both good and bad, and then act on them (for consumers) the process of
converting uncertainty into risks has started.'

It appears that consumers have weighed the 'risks' of spa spending and decided the rewards are well worth it. Preston Wynne spa therapists are observing that guests are extremely receptive to upgrades and spontaneous add-ons.

A promotion to encourage and incentivize rescheduling by new guests has had a very strong response at our spa. In the 'Spring Ahead' promotion, guests are
offered a free upgrade when they reschedule on the spot, and given a special gift voucher that is valid for their rescheduled date only. The therapist who successfully reschedules the guest is credited for the value of the next
service (prior to upgrade). After a month, the therapist with the largest dollar volume wins a prize, in this case a 'getaway day', a visit to a new and exciting day spa and lunch at a fun and elegant restaurant. The response by the therapists has been strong. The promotion is helping teach them how to more assertively reschedule guests, and the gift makes it easier for the guests to accept the invitation. We are considering making the new guest
rescheduling gift a permanent program.