Scandinavian-style spas are growing in popularity, and a Gatineau-based company has an ambitious plan to capitalize on the trend.
For Groupe Nordik Inc., which currently has spas in Chelsea, Que., and Winnipeg, the goal is to have 10 spas in 10 years, says Martin Paquette, the company’s founder and chief executive.
Visitors to Scandinavian-style or Nordic spas go through a “thermotherapy” cycle, spending time in a hot sauna or bath, followed by a dip in cold water and a period of relaxation. These spas also offer massages and many are located in scenic natural environments.
Construction on Groupe Nordik’s next location, in Whitby, Ont., began in October, Mr. Paquette says. After that, he has his eyes on Alberta. “In 2020, we will have an expansion in Chelsea, we will have a new spa under construction in Whitby and we will be designing Edmonton and Calgary,” he says.
Mr. Paquette didn’t grow up with an interest in entrepreneurship – or the spa industry.
“In 2001, while I was a police officer, I was working out to do the Ottawa marathon and while I was doing my long workouts, I started to have a little bit of fatigue,” he says.
That’s when he first visited a spa that offered thermotherapy. That treatment, influenced by the sauna culture of Scandinavia, inspired him to start thinking about doing something similar.
There are now more than 100 spas in Quebec that offer thermotherapy, says Anne-Marie Brochu-Girard, the executive director of the Association québécoise des spas.
“The concept of thermotherapy is what really distinguishes the Quebec spa product,” she says. The industry is growing, Ms. Brochu-Girard says, but she believes there’s still room for more spas.
Kathryn Gallagher, a professor at Seneca College’s school of fashion in Toronto, says that while the Nordic spa trend in Canada does appear to be strongest in Quebec, the use of water-based therapies is growing around the world.
Internationally, the number of establishments offering thermal baths or mineral springs grew from 27,500 in 2015 to just more than 34,000 in 2017, she says, citing numbers from a report released by the Global Wellness Institute.
She says the big names in the Canadian industry are Groupe Nordik and Scandinave Spa. Also a Quebec-based company, Scandinave opened its first location in Mont-Tremblant in 1999. It now has additional locations in Montreal, Whistler and Ontario’s Blue Mountain.
As Groupe Nordik has grown, so has the cost of construction. Mr. Paquette says the Nordik Spa-Nature in Chelsea cost $3.2-million to build in 2005 (although Mr. Paquette says the company has invested another $38-million in renovations and expansions over the past 15 years).
“The one we are starting to build in Whitby will be probably close to $40-million. Edmonton, same thing, we’re looking at a $35-million to $40-million project and Calgary might be $45-million to $50-million,” he says. The company has secured financing based on the value of its Chelsea spa, Mr. Paquette said.
In order to reach his goal of 10 spas in 10 years, Mr. Paquette said different financing options will be on the table, such as partnering with investors who would own a stake in an individual spa that would be managed by Groupe Nordik.
Between its two spas and head office, Groupe Nordik currently employs around 650 people.
Mr. Paquette says the company has learned how to build better over the years. “Every time we’re adding a building, they’re getting more expensive, but in the long-run, they’re getting more efficient,” he says. “These buildings are going through such a lot of stress, with all the humidity, the water, the volume [of customers]. To make it accessible, you’ve got to be able to bring a certain amount of people.”
Mr. Paquette says he expects the Whitby location to open in the fall of 2020.
“We’ve taken a little bit more time because of the structure we’ve put in place, not only for the design but for the construction,” he says. “We’re going to be the first private company to build with a CCDC 30 contract.”
The CCDC 30 standard, introduced by the Canadian Construction Documents Committee earlier this year, is based around the idea of integrated project delivery (IPD).
Under that system, the developer, the contractor and other key participants share financial risks and potential profits. CCDC 30 is already being used by the federal government.
Traditional construction contracts put the project’s owner, the general contractor and others working on a project into an intrinsically adversarial relationship, says Tim Sportschuetz, a Vancouver-based lawyer at law firm Singleton Urquhart Reynolds Vogel who specializes in construction law.
“The IPD construction delivery method really seeks to get rid of that adversarial model,” he says. “It focuses on sharing responsibility between the key project participants.”
Those participants work together from the beginning, he says, unlike on a traditional construction project, where the project’s owner hires a contractor to work on a completed design.
But there are risks, he says. A weak team member can force everyone else to work harder, he says. CCDC 30 also requires the IPD participants to agree to a broad waiver of liability.
“If anyone screws up or something should go wrong with the project, they cannot claim that against each other,” Mr. Sportschuetz says. “That might, in theory, promote this collegial atmosphere but also it could create an atmosphere where people get really guarded and worried.”