*4.1. The Structure and Chararcetistics of a Business Model in Modern Spas*

The exploration of the literature on the subject was conducted in the direction of the characteristics of the activities of spa enterprises. It includes social and economic factors (both historical and contemporary) that influence the current situation of the sector. The analysis of literature has also made it possible to identify historical changes in Polish spas and to cite selected concepts for the development of health resort areas.

The literature research undertaken allowed us to point out the key economic and social transformations (including cultural) affecting the current situation of the spa enterprises. It is possible to see three factors of influence. The transformation of health resort enterprises is conditioned by the market, product and ownership changes. They take:


The in-depth interviews revealed that the actual knowledge of business models among managers of the studied companies is negligible and fragmentary, as it usually refers to their abstract understanding, but without text or graphic representation of the related architecture structures of the model or the proposed services. Only 5 managers among 17 surveyed spa establishments declared knowledge and use of the business model in running a spa activity. In every third establishment (29.4%), there were studies concerning particular elements of the business activity, i.e., key activities, market segments, communication channels, and customer relations. None of the studied enterprises showed a compact characterization of the components of the company's business model or a formalized attempt to integrate all components of the business model based on the business model concepts known in the literature. The acquired information on the knowledge and applicability of business models in spa enterprises allowed us to confirm that the spa enterprises in Poland use the business model very rarely and only to the extent limited to certain elements of their activity, and not always with the awareness of the wide range of possibilities of its application. The use of the business model in the largest Polish spa companies is incidental and limited by the scope of selected elements of the business. In the vast majority of the studied enterprises, the issue of applying the business model in enterprise management was completely unknown.

The conducted empirical (qualitative) studies revealed that the activity of modern spa enterprises is focused primarily on achieving economic effects by increasing profit, the source of which is an increase of commercial stays in the total number of spa stays, and only then it is focused on the implementation of health functions within the health care system. This also allowed us to identify three key values determining the essence of the spa business. These were: the value for the spa patient, the value intercepted by the enterprise, and the social value, showing the importance of a health resort activity in the fulfillment of the health function of society.

The results of the research on the components of the business model are presented in Table 1, while below each of the elements of the business model obtained are discussed separately.



– transport costs

–

administration

 costs –


Source: Own study.

According to the results of the research, **the key partners** of spa enterprises are entities with which cooperation provides the facility with offers of values to be intercepted, i.e., state health and social insurance companies, as they enable the spa enterprises to achieve the revenues from the execution of contracts. The second category is travel agencies, which allow patients who finance their own stay to get to know the offers of the facility. Other partners are the health resort communes, represented by the local government administrating the commune, as well as suppliers of natural resources, competitors with whom the facilities cooperate on a coopetition basis, and outsourcing companies.

An interesting feature of this element of the model is the noticeable need for coopetition with competitors from the same region, e.g., in order to reduce the costs of promoting the spa features of the region. Joint therapeutic programs based on intrasectoral cooperation are also important. It is, at the same time, an innovation that meets the needs of the spa patients who prefer to change the place of treatment within the same stimulus effect. An important element of this component is also the possibility of building cooperation networks between the spa competitors (both direct and indirect) within the scope of complementary and substitutable products.

**Key activities** directly related to the spa activity include accommodation services, health resort treatment services (natural therapies), as well as catering services and treatment programming, i.e., the establishment of a treatment plan. An important role is also played by such activities as assistance of a dietitian or psychologist, health resort clinic services, and health education classes.

The key activities should be complemented by services extending the spa treatment, such as tourist services and animation of leisure time. It is necessary to introduce methods to optimize accommodation (reducing hotel costs) and the implementation of therapeutic treatments (which should improve the consumer satisfaction). It is also necessary to extend the spa offer with spa & wellness services, which so far have been provided by local entrepreneurs on a rather small scale.

An important activity should also be monitoring the load of the spa (spa park) with the intensity of tourist traffic and responding to exceeding the established limits. The city authorities may limit the possibility of increasing the number of beds in sanatoria and spa hotels. It is also necessary to monitor the drainage of the spa water deposits.

In the scope of **key resources**, the necessity for continuous education of the treatment personnel and creation of databases of existing and potential customers, which are worth reaching with the offer or recall the emotions that accompanied them during their previous stay, was noticed. According to the conducted research, the most valuable resources at the disposal of the spa facilities are the medical infrastructure and employees, as well as intellectual resources (conducted therapies). Elements of accommodation and catering facilities are also important resources. In the facilities where the activity was based on obtaining medicinal raw materials (mineral waters, salt water, salt, thermal waters, and therapeutic mud), raw materials were also a significant resource.

The spa managers declare that building positive **relations with customers** is based on activities focused on new and existing customers and on running loyalty programs. Currently, the development of relations with new customers is mainly performed through Internet tools, i.e., social networking sites and the so-called "open door", medical conferences, and direct offers addressed to organizations that may be interested in the facility's offer. Similarly, in the case of existing patients visiting the facility, the encouragement to develop a lasting relationship is usually an offer of cheaper stay (loyalty card, price discounts).

The method of establishing and developing customer relations depends on the segment of concerned customers. The segments of individual and business customers are the target groups in terms of building positive relations, because the actions taken towards them are intended to result in the return of the patient to the facility or to promote good reputation for the services provided there through word-of-mouth marketing. Contract patients do not choose the place of treatment themselves, which means that the relationship with them is not built or can be described as very limited. This is due to the lack of decision making by the patient about the place of treatment, because even if they chose a specific health resort, they cannot choose a spa enterprise in which they would like to stay. This seems

to be a mistake, because the patient's willingness to return is not taken into account, even for a shorter period of time within the guest's own resources.

Building a lasting relationship with patients requires a change in the attitude of the spa's employees towards the persons undergoing the treatment. So far, the spa patients have been treated as kinds of medical patients, which raises a lot of controversies, especially when they come to the spa not only for health purposes. The attitude of the personnel should be oriented towards hospitality, and thus towards treating patients as guests (welcome and expected) and offering them a friendly atmosphere. It is also a solution, the effect of which may have an impact on the profitability of a spa facility.

An advantage of building relations can be the introduction of transport convenience "from door to door", i.e., offering the possibility of comfortable transport of the patient from the house door to the sanatorium door and return transport, or at least transport from and to the places of access to the means of transport. The necessity of this innovation is seen in the reduction of stress factors among spa patients, and at the same time, it increases the satisfaction of the whole treatment at low costs to themselves.

Significant changes also occur in the case of the served **customers' segment**. The managers of health resorts usually point to the segment of institutional (contractual) customers, the segment of individual (commercial) customers, and the segment of business customers. Some segments of customers already served will require additional benefits in order to bring the spa offer closer to a wider audience. These will be, for example, care services for underage children, so that their mothers can participate in the spa treatment without interruption.

It is possible to separate other sectors of spa customers. These may be tourists for whom the spa's activity has only cognitive and recreational, but not health significance. There is also growing importance of customers using SPA services as well as organized, employee and special groups with different service profiles. Re-segmentation of the market of spa service recipients requires rethinking a number of criteria that may have an important role in identifying key segments in the individual approach of spa facilities. An important issue is not only the method of financing the patient's stay, but also the awareness of the choice of place and time of stay in the spa, as well as the duration of the treatment. An important factor will also be the purpose of arrival, as well as the practice of returning to the same place or experience in spa treatments. The need for segmentation will also result from changes in the types of relationship between the spa enterprise and the spa patient. A modern health resort businesses model should be targeted towards the market dependency of B2C (Business-to-Customer) type, creating especially value for the customer, instead of the currently used approach of B2B (Business-to-Business) or B2A (Business-to-Administration) type relating to direct payers (insurers).

Nowadays, **communication channels** with a potential patient are mainly based on websites, advertising banners and leaflets, as well as having a presence on social media. Another channel used by managers is cooperation with travel agencies, which allows for communication especially with individuals and business patients. Channels of communication with the customer should give special consideration to the progress of electronic communication, regardless of the age group of the recipients. Nowadays, people over 60 very often skillfully use both social media and electronic communication tools. An important structural change is the increasingly common acquisition of treatments by travel agencies. However, it is important to standardize this type of channel in order to make the medical side of the treatment more precise. In many cases, it is also necessary to re-educate general practitioners to offer spa treatments in direct contact with the patient after the diagnosis.

**Revenue streams and cost structure** contain similar items, although they do not always have the same significance in terms of their impact on the health resort enterprise. The managers emphasize that the most expensive activities are related to accommodation in a sanatorium and a health resort hospital, implementation of a health resort treatment, and also to catering. The same result is observed in the case of revenue hierarchy. A different significance is attached to the activity of a health resort clinic, which generates higher costs than revenues. The key revenues of health resorts are primarily generated by the performance of contracts concluded with insurers (which includes: National Health Fund, The Social Insurance Institution, The Agricultural Social Insurance Fund, and the National Disabled Persons' Rehabilitation Fund), but also from commercial activities targeted at individual and group patients, entrepreneurs, and sports organizations.

The component of the model that has undergone the greatest changes is the **proposal of values** that the spa enterprise offers to its customers. From the spas perspective, the value position consists of the core element, which is health treatment that uses local natural healing raw materials, fulfilled by the healing properties of the local microclimate, accommodation and medical infrastructure. Nevertheless, to fully understand the value proposed to patients, their perspective has to be included in the business model. To determine this component of the business model, the results of quantitative research were used, which are presented in the next subsection.

The in-depth interviews also revealed the most frequently used business strategy in spa enterprises. The possibility of servicing tourists in the spa treatment facilities allowed us to adopt double standards for the guests. This result has two reasons:


As a result, the offer addressed to individual and business customers has not only a higher standard with higher prices of services, but also higher profitability for the facility. Therefore, managers try to optimize the structure of the stays. They reduce the contractual possibilities with the insurer to the level of the expected filling of the remaining sanatorium places with individual guests, who provide them with higher profits from the activity. These proportions may vary over the year depending on the seasonal fluctuation of commercial stays.

The observations allowed us to notice an increase in the popularity of treatment combined with recreation and an increase in the number of elderly people with a simultaneous downward trend in the level of financing of health resort treatment from the National Health Fund sources. These phenomena make it more and more often necessary to turn to self-financing spa patients or to companies sending their employees to regenerate their mental and physical strength. From this perspective, this will have an impact on the new price mechanisms that the spa enterprises will have to develop in order to increase their effectiveness. The pricing mechanisms applied in health resorts already provide for a different approach to individual and group customers, for whom the catalog price is adopted or dependent on the features of the offer (depending on the product properties, market segment, transaction volume). For contract customers, the price mechanism depends on the terms of the negotiations and, usually, the size of the transaction is also relevant.
