Analyzing peak and off-peak periods and demand generators can help turn a hotel spa into a solid money-maker.
REPORT FROM THE U.S.—From a revenue standpoint, a busy hotel spa is a beautiful thing, but downtime can be a real downer.
Operating a hotel spa can be expensive for resorts and bigger urban hotels, but effective revenue-management strategy that drives business during the slow periods can ensure a high return on the investment, sources said.
That strategy includes offering special rates and packages, as well as memberships, to guests and the local community.
“Revenue management is about taking advantage of high-demand periods and trying to maximize low-demand periods,” said Jenna Finkelstein, director at CBRE Hotels Advisory. “You want to be able to shift some business from high-demand times to low-demand times.”
Weekdays often are slower for hotel spas, and require some ingenuity to bring in business, said Jill Carlen, director of global spa concepts at Hilton.
Hilton tailors its Spa Club program to each property, to offer additional value and incentives during less busy times, she said.
“If done well,” she said, spas can “move the needle for their bottom lines, as well as create a great guest experience.”
The Waldorf Astoria Grand Wailea in Hawaii has special rewards available only to locals, who pay a monthly fee for a spa service and other benefits, Carlen said. This monthly spa membership offers savings, compared to purchasing stand-alone treatments, as well as savings at other outlets in the hotel, on valet parking and exclusive package deals for hotel stays. Club members also are invited to events, and are offered extra rewards for holiday promotions.
“This loyalty brings guests back, and our data also shows it typically increases their spend per visit,” Carlen said.
The Equinox Golf Resort & Spa in Manchester, Vermont, also offers discounts to groups visiting midweek, said Alexandra Zullo, the hotel’s director of sales and marketing. Utilizing the spa as an added-value amenity for guests and a destination activity for groups is something that has worked well at the resort, she added.
Pushing unique packages and treatments that feature indigenous ingredients not offered elsewhere, such as the Vermont Maple Scrub, is another tactic that has been successful, she said.
The hotel also entices guests to the spa during slower times by partnering with the hotel restaurant for a lunch special and spa package, Carlen said.
Dynamic pricing is also a strategy to consider for hotel spas, with busy weekends commanding premium rates. An additional $10 to $15 per service on a busy weekend will flow through to the bottom line, Carlen said.
Amy Bell, spa director at the Adolphus Hotel in Dallas, said retail training for staff can help them to recognize opportunities with peak pricing, noting spa menus are starting to show prices for non-peak days versus peak days.
“Retail training builds the team’s comfort and confidence in treatments and the guest experience, all while maximizing our revenue lines,” she said.
Carlen added that hotel operators should have revenue strategies in place at all times.
“Margins are tight to begin with, but if you look at managing the peak and slow times to increase those margins, you’ll see it in your bottom line,” she said.