Therme, a giant European wellness company, has recently sparked public outrage in Toronto. They are doing it on the heels of the plans for a billion-dollar spa and water park facilities in Canada’s largest city. The business operates a single spa facility just south of Bucharest, Romania. During its unsuccessful bid for a multi-billion dollar contract, it misrepresented itself as an industry leader. The contract includes a highly favorable 95-year lease. In doing so, it has highlighted troubling gaps in transparency and the ultimate financial sustainability of Therme’s proposed new operations.
Leaving aside the environmental consequences of Therme’s plans, long-term expansion was baked into Therme’s founding. Today, it runs six spas in Europe, with its largest facility located in Romania. Its recent behavior north of the border has come under fire. Auditors have sounded alarms about Therme’s finances. The company has under one million euros of equity and appears to be losing money. Surprisingly, despite these alarming findings, the Ontario government has chosen to pay upfront costs. This commitment would total hundreds of millions of dollars, as included in Therme’s complex contract.
7,000 per worker per year Critics called Therme’s contracting process in Toronto not just opaque, but downright undemocratic. The company had misrepresented its prior experience and expertise in order to secure the deal. In fact, it eroded the public’s confidence in the legitimacy of its operations. The public and local stakeholders responded with fervor. Citizens are expressing their opposition to this contract due to its potential negative impact on local resources and our community.
Therme’s ambitions are not limited to Toronto, with plans to create similar wellness retreats globally. The company’s short history gives reasons to question its capacity to deliver on all these promises. With only one spa operating outside Bucharest, the question remains whether Therme can sustain and grow its business model in new markets.
