Trilogy Spa Holdings, a boutique spa management firm focused on “four and five-star” hospitality markets, recently announced its purchase of Trinity Spa Advisors, a boutique spa asset management firm founded by Cheryl Sott, who Trilogy has since brought on as its vice president of asset management. Sott is now tasked with overseeing the expansion of Trilogy’s Asset Management Division, which works with operating partners and onsite management teams in an advisory role to mitigate risk while maximizing growth. She will also spearhead the use of one of the tools that attracted Trilogy to the boutique firm: the patent-pending, proprietary Spa Audit Service.
Sott and David Stoup, chairman of Trilogy Spa Holdings, described for LODGING how they are positioned to improve spa performance and leverage the asset management tool that Sott calls “a mashup” of her experience in the spa space and working on Wall Street.
Stoup observes that a fortunate byproduct of the calamitous pandemic for the spa segment of hospitality is this: “The share of wallet that’s being channeled towards self-care is higher now than it’s ever been.” He notes that Trilogy’s typical clients are four- and five-star resorts whose client base has an affinity for self-care and the disposable income to indulge it. However, he adds, these properties have different needs, so Trilogy individualizes its service strategies based on which one of three “lanes” meets a particular property’s objectives. “Sometimes they want a lease to eliminate risk; other times, they want to go halfway with a management agreement. If they just want to shave off a bit of risk by having access to third-party expertise without having it actually operate their business, they can go the asset manager route.”
To serve clients who may just want what he calls “expert eyes,” Trilogy brought on Sott and created the asset management division she now runs. Stoup says her 30 years of experience, including 10 as a Wall Street asset manager and 20 working with spas, and her background as an entrepreneur sets her apart from the rest of the pack of advisors. But, beyond that, he says, “She has developed a tool that really broke the mold of what consulting has been. The Spa Audit tool allows you to objectively compare a spa to its competition or others in your portfolio.” In combination, he says, these attributes give her the ability to operate as well as advise and use the tool she developed to do repeat spa audits, if the client wishes.
Sott says the spa asset management point of view she embodies and the Spa Audit tool she developed are “a mashup” of her combined experience in finance and spas. “The Spa Audit is a tool that provides an objective view of a spa’s performance. We collect 350 points of data, which enable us to see if there are acute or systemic problems with the touchpoints of the spa—whether it’s operations, revenue, or guest experience. From the numbers, you’ll see very clearly and visually which part of the experience is lacking. Ultimately, our goal is to bring those factors into perfect balance, which will put performance in the best light.”
Sott points out that each element—guest experience, operations, and revenue—is part of a bundle that must be unbundled to identify issues that need to be remedied. For this, she says, they bring in “human eyes” via interviews with staff. “The interviews with experts on the team will elicit additional information from those touchpoints to identify the source of the problem and determine how to remedy it.”
Both Stoup and Sott stress the importance of that human element. “It’s all about the people. If we draft and retain the best employee partners, we win—just like a football team,” says Stoup. “They are the ones that need to fully understand the problem to rectify it. Sometimes, they need help understanding the elements of the continuum of service—for example, spa treatment aftercare. The people may have the knowledge and desire but the data points may show something in the operations is not getting them there. The interview will elicit that information so that you can see very clearly where your gaps are.”
Sott says virtually all the work involved in onboarding the Spa Audit platform is done by Trilogy. “We ask them for some financial reports in advance, and then we spend four days on property. It’s a lot of work. While we start by executing the tool, we look deeper and examine everything while onsite to come up with the solutions. We then create and circulate to our own team a draft report with the suggested initiatives, after which we have 15 to 20 days to turn around the report.” The report presented to clients, she says, is “a real consolidation of suggestions,” based on what was seen and solutions designed to achieve the client’s goals. “They’re very, very specific. It’s not just step-by-step; it specifies the amount of time a short-term initiative will take, what it will yield, and what it will cost.”
Stoup and Sott cite the example of a large, five-star resort as a property that has already benefitted from Trilogy’s recommended initiatives—the latest of which is a spa within a spa. Sott says, “I see a theme to the issues identified at the resort, which is a consistent property with the potential to go from good to great.” Already, Spout says, revenue has tripled, but he hopes to help them do even better. “We’re doing different things and making adjustments along the way. In bringing in a spa within a spa, we still need to make the coordination a little bit more seamless.”
Stoup says the addition of Sott to Trilogy’s executive team as asset manager has transformed the company and its ability to better serve its clients. “She has brought in a fresh pair of eyes, but she is also an expert at doing this sort of dissection—like a medical examiner examining a body piece by piece to determine the cause of death. She’s also teaching her process to her team of operators so they can accommodate demand as it picks up.”