Focused Discussion of the XpresCheck Business with CEO Doug Satzman



KEY POINTS
  • Our discussion with Doug Satzman, CEO on December 7, 2021 focused on the XpresCheck business, which provides COVID-19 tests at 14 locations in 12 major US airports. The business was started from nil in June 2020 and achieved revenues of $25.4 million in 3Q21, making it the largest airport-based COVID-19 testing company.
  • Even with increased rates of vaccinations, XpresCheck revenues have kept growing throughout the first three quarters of 2021. In fact, airport authorities expect testing to remain a feature of international travel for the foreseeable future. With evidence that vaccinated individuals can still carry the virus, testing is an effective risk mitigating measure at no cost to the country of destination. The emergence of new variants, such as Delta and Omicron, can create new momentum for testing requirements.
  • International travel volumes have recovered much more slowly than domestic volumes; any further recovery should help XpresCheck. Asia remains largely closed to non-citizen visitors, and the US just re-opened for non-citizens, which should benefit XpresCheck when travelers fly back home and might need testing.
  • The bulk of XpresCheck tests (90+%) consists now of the Rapid PCR which is the gold standard to enter most countries. XpresCheck charges $250 for the test, in line with most competitors, and with the added benefits of the convenient airport location as well as the company’s knowledge of various countries’ and airlines’ requirements.
  • The initial $2 million CDC biosurveillance pilot program covered three airports and passengers coming from one country for eight weeks. Management believes biosurveillance can be a very large opportunity for the company as the CDC attempts to improve its response and monitoring capabilities to deal with future new variants and future new viruses.

THE COMPANY

XpresSpa Group provides health and wellness services out of 24 US and 6 international airport locations. Its XpresSpa legacy business operated 43 spas in 21 airports prior to the COVID-19 pandemic. When the pandemic started, the spas had to be closed; the company pivoted and developed XpresCheck, a business offering rapid COVID-19 testing services with currently 14 locations in 12 airports, primarily targeting passengers bound for international destinations that require negative COVID tests for entry. XpresCheck has also secured a first contract with the Centers for Disease Control and Prevention (CDC) to conduct testing and biosurveillance for inbound international passengers. While the company has started to selectively reopen some of its XpresSpa locations, it is also developing Treat, a new multichannel health and wellness brand. It has already launched the brand’s website, treat.com, as well as the Treat app. It will open the first Treat airport location by end-4Q21 at JFK Terminal 4. Treat will expand on the spa and testing services offered by XpresSpa and XpresCheck and will have an extensive suite of health and wellness goods and services, including testing, vaccines, anxiety care, emergency prescriptions, vitamin IV therapies, as well as wellness offerings such as fitness, yoga, and guided meditation services.

EXECUTIVE DISCUSSION

Thierry Wuilloud, Senior Research Analyst at Water Tower Research, covering emerging growth companies, spoke to Doug Satzman, CEO of XpresSpa, as part of the WTR Fireside Chat Series.

As part of this interview, XpresSpa may make forward-looking statements, so we encourage you to look at the latest presentation on their website.

Also, a reminder: You can access all our research content at www.watertowerresearch.com.

Thierry Wuilloud: Doug, can you start by updating us on how many XpresCheck locations you currently have and plans for further locations?

Doug Satzman: We have 14 XpresCheck locations at 12 US airports, including the largest airports in this country. Additional locations are coming up through 2022. We will also be shifting some of our post-security locations to pre-security. Real estate is always hard to get at airports, so when we entered this business in the early days of the COVID-19 pandemic, sometim...

ABOUT THE EXECUTIVE
Large thumb satzman headshot
Doug Satzman

CEO

XpresSpa Group, Inc.

Doug Satzman is the CEO of XpresSpa since joining the company in February 2019. Doug has guided the company through the COVID crisis, which forced the temporary closing of all of the company legacy spa locations. Doug led the pivot toward the creation of XpresCheck which has become the largest airport-based testing company in the US.

Previously, Doug served as CEO of Joe Coffee Company, and also as CEO of Le Pain Quotidien. Mr. Satzman also spent 14 years at Starbucks Coffee Company in various roles, leaving the company as Senior Vice-President, EMEA Business Development & Channel Operations. Mr. Satzman holds a Bachelor’s degree from Rollins College.

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