New company the Cortiva Institute is changing the face of massage education in the US by creating a nationwide family of schools. Its co-founder, Alan Clingman, explains how.

Change is afoot in the US massage school industry. According to the American Massage Therapy Association (AMTA ), there are currently around 1,200 institutions offering some kind of massage training in the us. Traditionally, massage education in the States has been a fragmented sector, made up primarily of independently owned 'mom and pop' businesses. However, as the spa market has boomed, these operations have struggled to keep up with increasing demand for well-trained therapists. In response to this dilemma, a number of bigger players are stepping in and acquiring existing massage schools, with a view to consolidating the industry and taking it to the next level. "Some big companies are starting to buy up massage schools in the States," says Rob Precht, a spokesperson for AMTA. "It's a definite trend."

Among the companies at the vanguard of this movement are the US Education Corporation and Steiner Leisure (SB 04/Q2 pS8), says Precht. However, by far the biggest is the Cortiva Institute. Launched less than three years ago, Cortiva already has 13 schools, in New Jersey, Pennsylvania, Florida, Illinois, Colorado, Washington, Arizona and Massachusetts. It will open another four by the end of this year and a further six to eight in 2007. Once established across America it may even set its sights on Western Europe.

The Cortiva Institute is the brainchild of Alan Clingman, who is chair, CEO and a board director of the company. An entrepreneur with a background in crude oil, commodities and private jets, Clingman is a newcomer to the health and wellness industry. "The last business I set up was Marquis Jet Partners, which became an industry leader," he says. "When I left that business in 2003, for the first time in my life I really didn't know what to do. Then one of our investment bankers said, 'Why don't you look at the spa industry? It's growing quickly but then' aren't many big players'." Intrigued, Clingman started looking for entry points into the industry. After considering and rejecting retail - "since the average spa is very small we would've had to accumulate a lot to get any critical mass" - he lighted upon education. "Post-secondary education in the US is big business, and several multi-million dollar companies have been established over the past 10 years. Also, during our due diligence, we spoke with a lot of spa operators who claimed that the biggest impediment to their growth was the difficulty in getting enough good people and then getting them well trained."

By the end of 2003, Clingman and his business partner Anthony Millin - a lawyer and financial expert with a similarly successful background in founding and managing businesses - had made the decision to enter the massage education industry with a number of other investors. "Cortiva Institute is privately owned," says Clingman, "but every head-office employee and every unit head is a shareholder, so we've spread the ownership quite wide."

The company bought its first school, the Somerset School of Massage Therapy, New Jersey, in May 2004. Its second site, acquired 10 months later, was the Chicago School of Massage Therapy, Illinois. Since then, the company's portfolio has mushroomed.

The decision to grow the company through acquisitions was a simple one, says Clingman. "Education is very highly regulated in the US," he says. "All the schools we've bought had already been accredited by a national accrediting agency and were licensed to dispense federally subsidized financial aid to students. Anyone can start a school, but it can take a least two years to get accredited and then up to another year to get a licence to dispense aid.

"Even if we did that, we would only be allowed to open one new branch each year [per accredited school 1 so it would be a very slow way of growing. So we decided to buy as many good schools as we could, and then use each of those to open a branch a year right now we could open 10 branches if we wanted to. So [focusing on acquisitions] has enabled us to create a base for ourselves."

PROVING INTEGRITY

From the outset, Cortiva has had high standards, says Clingman: "There are about 1,200 massage schools in the US, but only about 50 that are of really high quality."

However, persuading the owners of these quality operations to sell up to a conglomerate run by industry outsiders proved no mean feat. "In the beginning, they didn't even return our calls," says Clingman. "Invariably these schools are owned by the founders and they were very skeptical about outsiders coming in and maybe commercialising the industry.

"It was very difficult until we bought our first school in New Jersey - then they saw the resources we were putting in, how we were investing in the facilities, training the faculty and finding employment for our graduates, in a way none of them could do.

"That was coupled with the fact that all these schools are 20 to 30 years old and the owners were thinking about retirement. For the first time, they felt there was a buyer that had credibility and passion. Once we bought our second school, all the people we'd already talked to came back and said they were having second thoughts.

"Now we could go and buy another 50 schools if we wanted to, but most of them are of no interest to us."

Among Cortiva's strict criteria for potential acquisitions are an excellent reputation for education and a dean slate with the regulatory overseers. At present, it is focusing primarily on big city locations, "not because we don't want 10 be in the secondary cities, but because we want to be in the 50 big markets in the US first".

As part of their accreditation, all Cortiva sites offer curriculums of over 600 hours, and, although these vary, they all cover the structure and function of the human body, foundational massage therapy, varying levels of advanced techniques, business and communication skills, and the ethics of touch. The course costs from US$8,500 (€6,600 or £4,500) to US$12,000 (€9,400 or £6,300), depending on the length of time taken to complete it. From January 2008, Cortiva will offer a single standardised curriculum across all of its schools.

CAPITAL INVESTMENT

Part of what Cortiva can offer, which the previous owners of these operations could not, is capital investment in the facilities themselves, At the 25-year-old Chicago School of Massage Therapy, the company has invested US$1.5m (€1.2m or £810,000) to create a world-class clinic. A far cry from the traditional massage school clinic typically comprised of a classroom with curtained-off cubicles - this 16-treatment room, purpose-built facility was created by spa designer Clodagh (see SB 06/Q1 p106) and will be staffed by students under professional supervision. The aim is to replicate the concept at all Cortiva's big city sites over the next two years.

The second clinic is already under construction at the Cortiva Institute in Colorado, the only Cortiva school that cannot claim to be a veteran in the industry. For this very reason, Cortiva is investing US$3m (€2.4m or £1.6m) to make the school its flagship site. "It had just started and had received its government permission, but it was tiny and the owner just didn't have the resources to launch,"says Clingman. "We bought it and located it closer to Boulder, where we opened a temporary space in January. We're now building the most phenomenal massage school anywhere in the world - nothing else will come close."

According to Clingman, the facility, which is being designed by international architects Gensler, will be second to none in terms of design, technology and quality of facilities.It will include, for example, a 12-station, wet-treatment classroom equipped with state-of-the-art hydrotherapy equipment. US$1m (€793,000 or £540,000) is being spent on the clinic.

BRAND VALUES

The company has invested heavily in market research to establish a brand philosophy that really meets its customers' needs. "We interviewed hundreds of prospective students, current students, graduates and alumni, and we discovered that many of those coming into the massage industry are corporate refugees. Sixty-five per cent of our students have left another job to come to massage, and invariably the reason they left was that they got no satisfaction from their work. They're interested in helping people, and get a tremendous sense of achievement from that.

"So we came up with the internal concept of 'the practice of humanity' - 'practice' because we do have to make money and 'humanity' because our clients deserve to he treated humanely and with compassion. Our brand has been built around that: if you look at our website and our collateral, the wording and the images are all about people and community."

Cortiva also aims to practise what it preaches by nurturing its students, even after they have left the fold. "We're not just here to take someone's money; we become their partner for life, whether that mean finding them a job or counseling them on how to create their own practice."

One way in which Cortiva is fulfilling this commitment is via its online, nationwide job portal, launched earlier this year: over 2,000 employers have already recruited staff through the site. Another example is its 2006 Graduate Series of one-day seminars, aimed at enabling qualified therapists to amass the continuing professional development (CPD) credits necessary for them to keep their licence. Not only is the program free of charge - schools commonly charge up to US$500 (€396 or (270) a day for CPD - but it's not limited to Cortiva graduates. "We'll help anyone meet their requirements," says Clingman.

BUSINESS PARTNERS

One factor that really sets Cortiva apart from its competitors is eCornell , a unique alliance with the internationally renowned Cornell University in Ithaca, New York, which gives Cortiva students exclusive access to specially tailored online business courses, including hotel management, marketing, business finance, leadership, time management and human resources.

"What we've discovered about our market is that these people are passionate about their work, but they don't even think about how to market or differentiate themselves, how to get customers and retain customers, or how to manage employees.

"The eCornell partnership enables our students to complete Ivy League-quality courses that have been specially prepared for people in this field, who might not be highly academic or business minded."

According to Clingman, the online system is highly interactive: "It's not just emailing course work to somebody, Students are grouped into 'cohorts' of 30 people, with J Cornell professor assigned to each group. There's tremendous personal attention and we will also provide classroom support to anyone who needs it."

In addition to the eCornell courses, marketing and customer services modules from the university's hotel programme have been incorporated into Cortiva's core curriculum as standard. "Our students have access to intellectual property from the world's leading hotel school, which really understands hospitality and managing consumers," says Clingman.

The kudos of an association with Cornell is another benefit. "For anyone running a business, a Cornell certificate on the wall has to earn them some recognition."

MAKING A MARK

Making its own distinctive mark on schools with a long history in the Massage industry had its challenges, admits Clingman. "Back of house, we manage our business as a business and we're very efficient in that respect, which was never the case before there weren't too many systems in place. "However, that's totally separate from the front of house, where we provide great customer service, a lot of nurturing and high-quality education, and the best technology. I think that the people who work for us have come to appreciate that" Although to date the president of each newly acquired school has been replaced, this has often been because they wanted to leave,explains Clingman. In some cases, the top post has been conferred upon the second-in-command. For the most part, however, the existing staff has been kept on and retrained 'the Cortiva way'.

When it comes to finding new staff, Cortiva turns first to its 25,000 alumni and to its fresh graduates, with a view to putting likely candidates through teacher training. In this area, Clingman relies on his vice president of education, Ian Schwartz, who has 17 years' experience in education - 14 in massage and complementary medicine and five years with the Commission on Massage Therapy Accreditation (COMTA ), including three as chair.

JOB OPPORTUNITIES

While Schwartz looks after education, Diane Trieste, as vice president of employer and alumni relations, is charged with building relationships between Cortiva graduates and potential employers across the US. And having spent 13 years with Canyon Ranch Health Resorts LLC , she has a clear understanding of what spa operators, in particular, are looking for.

At present, 50 per cent of Cortiva graduates go into private practice, while 50 percent get one or more jobs. The proportion that enter the spa industry is strongly regional, according to Clingman. In Arizona, where there's a very strong spa business, 75 per cent are employed by spas, whereas in Massachusetts, where Cortiva has established ties with Harvard , Brown and other medical schools, 90 per cent go into medically orientated roles.

There are several reasons spa operators would do well to recruit from Cortiva, says Clingman. "One is the access to the resumes of our graduates on our job portal, and another is the ability to recruit nationally.

"Take Canyon Ranch; they have resorts in Massachusetts and Arizona, and Spa Clubs in Las Vegas and Florida, as well as a spa on the Queen Mary II. Because they can recruit from several of our schools, we really provide them with a national solution.

"Employers also know that we'll share information about the competency of our graduates, make recommendations and even help with recruiting."

As part of a drive to establish stronger links with the spa industry, Trieste sits on the board of the American Spa Therapy Education and Certification Council (ASTECC ) and is overseeing the rollout of its 240-hour Spa Therapy Certification programme across all Cortiva's schools.

FUTURE PLANS

At the end of this year, Cortiva is launching what Clingman describes as "the equivalent of a graduate school, for people who are already massage therapists but want to specialise." This will comprise a series of 120-hour programmes, focusing on specialist areas from pregnancy massage to sports massage. Alongside massage-therapy courses, there will be a course in personal training and another in nutrition. A skin care programme is also in development.

Part of the motivation for this diversification, says Clingman, is to enable massage therapists to increase their income by widening their skill base: "The average massage therapist doesn't do more than 20 treatments a week and that holds their salary down. But they could intersperse massage with fitness training, especially if they work in a health club or a hotel."

Cortiva is now focused on maintaining a steady and sustainable rate of growth. "Because we're a private business, we don't have the pressure of all Street asking what we're going to do next, so we're very cautious," says Clingman.

However, he is unequivocal that his investment decision was the right one. "We're absolutely thrilled," he says. "We've been through a lot of learning, and you don't get any free lessons in business, but we're in a position now where we're very well set for growth.'

Spa Business Magazine