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Yahoo Finance’s Alexis Christoforous and Brian Sozzi speak with XPresSpa CEO Doug Satzman about how the company is turning airport spas into COVID-19 testing centers.
ALEXIS CHRISTOFOROUS: One of the biggest questions in this economic recovery is how do you test millions of Americans to make sure that we have a handle on the spread of coronavirus, especially when millions of Americans are going to start traveling again?
XPresSpa has a plan for doing just that, converting its airports spas into testing centers, beginning with New York's JFK Airport. Joining us now is the CEO Doug Satzman. So, Doug, I am excited about this prospect. You're anticipating having a pilot program in place by the end of this month. Tell us what that might look like.
DOUG SATZMAN: Starting with JFK terminal four where we have a large existing business and we are opening a COVID testing facility presecurity in the airport to test primarily airport and airline employees, focusing on the front-line workers, TSA agents, airline attendants, pilots, custodians, concessionaires, everyone who supports this important piece of infrastructure for our economy.
BRIAN SOZZI: Doug, and how will you know when it's time to switch back to your traditional model of spas and what you're historically done?
DOUG SATZMAN: Well, we see it as both happening separately. So this is a new line of business. We're in a position to convert our existing portfolio of real estate. But in several instances, the airports are giving us additional locations-- in this example, for our first pilot presecurity, which is more accessible to more people. But we will be reopening our spa business once enough airport traffic returns. We may reimagine the business based on things we're learning with this current pandemic, but we look to operate both.
ALEXIS CHRISTOFOROUS: I'd have to think that operating a spa, a nail salon, a beauty salon is particularly challenging just because of the nature of the work during this pandemic. How might your spa business change when it gets back up and running, Doug?
DOUG SATZMAN: We're looking at a range of options. So today someone wants a service, and you have a licensed therapist-- a massage therapist to work with you or an aesthetician. There might be some services that are less popular when you return like a facial because of the close proximity, but a lot of the massage and body work is done with safety protocol in place.
But there is a lot of technology that's out that can require less personal interaction. But we also do a number of things in the health-and-wellness space. We're the largest in the country, and we're looking at new ideas to come in that's beyond our current services that will be suited for this post-COVID environment.
BRIAN SOZZI: Doug, a question on-- you know, your business was on fire coming into 2020-- 10 consecutive quarters of same-store sales increases. You were looking at EBITDA profitability this year. How does the business look like now, and have you had to raise any money?
DOUG SATZMAN: We raised some money in the first quarter, and this was to help with our turnaround as Q1 business started to decline. We needed to help fund that. But I joined the company in February '19 for a turnaround. And like you said, we had-- after an 18-month negative comp slide, we had 10 consecutive positive comp months. In 2020, we were well positioned for the turnaround, but then came the closing of our spas as it was deemed a nonessential business.
Some of the plans we have to reactivate our spas we think are going to accelerate our plans. And this COVID-19 testing option has really taken a lot of attention, and a lot of the airports are very interested in bringing this into their space, whether we leverage existing real estate we have or new spaces.
So we're quite optimistic, but we need to get everything back open, which starts with air traffic picking up and travelers returning, which is starting to happen.
ALEXIS CHRISTOFOROUS: All right, Doug Satzman, CEO of XPresSpa, best of luck with the new business.
DOUG SATZMAN: Thank you very much.