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Is yield soluble in spa water?

How can the profitability of a spa – which most actors in the spa world estimate at 25% to 30% at the end of 3 or 5 years – be optimized? First solution: boost additional sales as they generally represent a quarter of properties’ revenues. “Revenues are higher in Russia and the Middle East where clientele are major product consumers,” remarks Monica Sirenius, managing director of Raison d’Etre. To do this, training offered by professionals covers this problem by teaching therapists the subtle art of suggesting to clientele that the natural follow- up of a treatment involves the regular application of cosmetic products.

*RevPATH (Revenue per available treatment-hour): multiplication of use of treatment rooms by average treatment revenue per occupied hour, or division of total revenues over a given period (morning/afternoon, day, month) by the number of hours available for treatments.

But the other side to maximizing profit is still being worked on. A recent Cornell study pleads for real Revenue management in spas. The university hopes to see its RevPATH* concept develop by favoring the most profitable treatments during peak periods and using pricing strategies to attract clientele during slow periods. This is easy to say, but is it easy to do when the spa’s occupancy must be reconciled with employee schedules? “Yield management is something we are working on, but have not yet been successful in bringing to fruition. We are often full and take advantage of slow moments to offer our employees time to rest,” explains Isabelle Nordmann, founder of After the Rain.Nonetheless, the idea is blazing a trail. Jumeirah’s spas play on occupancy on a daily basis: “we schedule more complex spa treatments (such as couples’ massages) at off-peak timings, and focus on 50-minute massages and facials during peak hours,” explains Thatcher Brown, VP of Brand strategy. And, at Mandarin Oriental, a global spa yield manager is in charge of this matter at a group-wide level. “It is a first in the spa industry,” rejoices Andrew Gibson, Group director of Spa. Hotel groups and leaders that are partners have all developed their performance indicators to study profitability. Thus, Hilton analyzes its spas’ profitability through a global, real-time daily report produced through our ONQ technology systems.According to others, the presence of a spa manager at the head of each unit is essential for analyzing and supporting results. “An esthetician is not necessarily prepared for that. It is necessary to have a professional who speaks the hotelier’s language,” explains Valdi Kovanic. This observer of the spa world offers operators two words of advice. First, create spaces without personnel thanks to the presence of sophisticated equipment. Secondly, tend towards untapped clientele niches with less traditional schedules such as seniors and athletes.

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