SEATTLE – Health and wellness company XpresSpa Group, known for massaging, manicuring, and relaxing stressed-out travelers at 23 airport spas around the world, has pivoted to a new service as more people get vaccinated and make travel plans: Covid-19 testing. 

The company has set up Covid-19 testing pop-up facilities in Denver, Dulles, Houston George Bush, JFK, Boston Logan, Newark Liberty, Phoenix Sky Harbor, Reagan, Salt Lake City, and Seatac airports so far. Another site at San Francisco International is slated for mid-April. 

As the testing facility rollouts continue, the company is seeing higher gross profit margins from the Covid-19 testing sites than it did with its spas at peak business periods, CEO Doug Satzman told investors at the end of March. He says the company plans to keep the testing sites operating for at least a couple of years.

XpresCheck™ Pilot Program

The company began its pivot as early as last March 19, 2020, as the reality of the pandemic was starting to sink in across the country. The Covid-19 testing facilities, branded as XpresCheck™, started with a pilot program for airport employees at JFK International Airport last June and have steadily opened across other airports ever since, with the latest installment opening in Seattle-Tacoma International Airport on April 7.

The Seatac facility is located in the baggage-claim area near Carousel 9. The company has set up eight testing rooms there and has the capacity to do 500 tests a day. Passengers choose from the Rapid Molecular Covid-19 Test, a blood test to check for antibodies with results produced while you wait, or the Polymerase Chain Reaction (PCR) Test, better known as the nasal swab. Nasal-swab samples are sent to a third-party lab and results are ready in two to three days, according to the company.

XpresCheck does take insurance, but co-pays start at US$200 for the rapid test and US$75 for the nasal swab, with an additional US$15 for subsequent tests. 

If a passenger tests positive from a rapid test, they are told that they must exit the airport and self-isolate per Center for Disease Control guidelines. Travel companions will also not be permitted to travel. 

XpresCheck has teamed with Hawaiian Airlines (HA) to test for Covid-19 on direct flights to Hawaii from New York, Boston, and Phoenix. The testing is about “doing our part to maintain Hawaii’s track record as a safe destination,” said HA Senior Vice President of Marketing Avi Mannis. 

Comments from XpresSpa Group CEO Doug Satzman

Satzman says the company plans to keep the test sites operating for a couple of years. He said the company’s chairman of the board, Bruce Bernstein, came up with the idea of switching the spas to Covid-19 testing centers last March. 

“We have real estate in airports,” he told Conde Nast Traveler. “Airports are the front line and the gateways from other countries. And you think of the TSA agents and the Customs and Border and flight attendants and the pilots and the baggage handlers. They’re all at risk trying to keep our airports going.”

XpresSpa stock (XSPA, Nasdaq) has performed relatively well over the past year for a company tied to the travel industry. The stock opened on April 6, 2020, at 0.72 per share and closed the most recent week on April 9, 2021, at 1.57 per share.  The stock reached a 12-month high 0f 8.8 a share on June 5, 2020, as it rolled out its pilot Covid-19 testing facility at JFK.

“Over the past few weeks, we have been encouraged by rising patient testing volumes and increased average revenue per patient at our XpresCheck™ Wellness Centers,” CEO Satzman told investors at the end of March. “We attribute this traction primarily to the rollout of Covid-19 Rapid Testing, which has become the preferred testing option of over 73% of all patients.”

“Although overall airport traffic remains significantly below 2019 levels, we are seeing increasing passenger flow, benefiting from an increase in airport traffic as people resume personal and leisure travel in a safe manner, which, in our opinion, will lead to a strong recovery during the second half of 2021, added Satzman.

“Notably, XpresCheck’s estimated gross profit margin for recent periods is higher than even XpresSpa’s peak business performance during the pre-pandemic era,” Satzman said. “From a cash flow standpoint, this is important not only as it relates to existing XpresCheck operations, but also because of the ongoing investments we are making in our new travel health and wellness brand to meet the emerging needs of travelers in a post-Covid-19 environment.”

“Furthermore, the cost of building each of the first three XpresCheck Wellness Centers averaged US$540,000 while the subsequent eight centers averaged US$158,000 as we optimized the layout and the construction methodology.”

IATA and Antigen Testing

Still, the cost of PCR testing can be prohibitive for families and frequent travelers. The International Air Transport Association (IATA) has been urging governments to accept the cheaper antigen tests, arguing that new research shows the best antigen test results are broadly comparable to PCR tests. IATA says processing times for antigen tests are 100 times faster than for PCR tests and on average 60% cheaper.

An IATA-sponsored report from OXERA-Edge Health found that a family of four traveling from the UK to the Canary Islands would need a total of 16 tests at a price of about GBP1,600, or nearly US$2,200 at current exchange rates. 

XpresSpa added antigen testing to its lineup on April 5 as part of an agreement with Delta Air Lines (DL) for passengers of flights from New York’s JFK to Milan and Rome, Italy. Satzman said the tests help “increase travel safety and restore confidence in airline travel in a more efficient way.” 

Travelers to Italy can avoid a 14-day quarantine upon arrival if they go through a rigorous testing regimen before and after their flight. 

Look for more Covid-19 testing sites to roll out at airports as people get vaccinated and eye a return to air travel. But the cost barrier will be a real challenge for airlines and XpresSpa as we pull out of this pandemic.

Featured image and all photos: Author