Spas are becoming an integral part of hotel operations, no longer are they relegated to the sidelines.
Hotels should spend considerable time reviewing the spa P&L, that is, if they are not doing so already. Spas can contribute upwards of 5% of hotel revenue and are positioned to provide a variety of guest experiences that could well be the differentiator hotels need to set them apart from the competition.
While helping hotels improve revenue in the spa and in their business, at Sasara Wellness, we look at some key metrics.
So, let’s look at 11 ways to improve spa revenues and the key metrics you must focus on
Treatment room Utilization
Spas tend to have peak hours and this reflects in your treatment room utilization. To drive better utilization during off-peak hours, introduce packages and promotions to increase footfalls.
Ensure that your packages and promotions don’t overlap into your peak business hours as this will impact your yield.
Therapists are your key resource and their utilization needs to be tracked diligently.
A higher utilization is hinting towards hiring and a possible drop in service standards. This will adversely impact guest experience leading to complaints and lower revenues.
On the other hand, lower utilization is concerning as it will impact your spa profitability.
Revenue per available treatment hour is similar to how hotels calculate RevPar. Given the need to turn over the rooms during the day, this KPI helps the spa manager to manage time effectively.
Average Treatment Revenue
This is derived from your treatment mix and the type of promotions/discounts you offer. Just like peak hours, spas also tend to have peak days.
A smart manager can introduce yield pricing to improve revenues on peak days. On slow days, maximize packages and promotions.
Guest capture rate
Most hotels/resorts will want to know what is the overall capture rate. A sharp spa manager will follow this and look for ways and means to maximize this. One way to improve your capture rate is to incorporate spa offerings into hotel/resort packages.
This is an important indicator as it tells you how much your customer spends on average in your spa.
Improve customer spends by upselling treatments, retail products, and wellness offerings like classes and training (if your spa has these services)
Look at your menu and review what sells and what doesn’t. Menu engineering allows you to identify your stars, performers, and under-performers.
Replacing/removing your under-performers can help you refresh your menu, provide you with opportunities to launch new treatments, products, packages, and promotions, cut down on your inventory costs.
As part of your menu engineering, also review your list pricing. Costs tend to go up every year and you will need to factor this into your pricing.
Want to do menu engineering for your hotel spa? Check this out
What’s your plan? A good marketing plan will help you be prepared and encash on festive periods as well as peak months. A good marketing plan can help you improve revenue in the spa during key periods
Ensure your marketing plan has inputs from your vendors. Most spa vendors offer retail packages and promotions. This will add to your customer journey, increase customer spend, and improve your retention.
Speak to your team and ensure they are aware of the goals on a daily basis. Listen to what they have to say. A lot of good ideas come from the frontline team as they spend a lot of time speaking to the customer.
Ensure your training plan is in place for both new and existing employees. Refresher training for technical skills will ensure higher customer satisfaction and better revenues.
As part of your training plan, lay emphasis on soft skills and selling techniques. Anyone can sell and if your team is trained in upselling and cross-selling techniques, they can impact your revenues positively.
Review your guest feedback, understand what they are saying to you. It costs lesser to retain customers.
So these are the 11 things you need to keep an eye out for to improve revenue in the spa. Just imagine what would you do with extra 5% revenue.
An effective change leader, who enjoys helping luxury hospitality and wellness firms create and deliver enriching customer experiences, achieve service excellence with measurable impact in terms of customer satisfaction and profits. With more than 15 years of experience in Asia with leading hospitality and wellness brands, I created Sasara Wellness to be the foremost wellness provider for hotels, resorts, and real estate firms