Turn health into wealth with smart strategies for transforming hotel space into an experiential, revenue-driving wellness hub.
There is much more to a hotel than a brick-and-mortar box where the spaces within any given four walls could feature guest beds or restaurant tables. Great hotels and resorts are where memories are created and travelers embark on an emotional journey. This is the sweet spot for driving incremental revenue.
Hospitality asset owners looking to fully leverage their real estate with little or no extra expense can quite simply reinvent what they have, tapping into trends and providing what guests really want: experiences that indulge the senses and spark emotion.
Spas are a prime example. These beautiful spaces, often viewed as a must-have amenity, are all too often under-optimized, contributing very little to total revenue.
There’s a clear opportunity to turn this amenity into a profit center by creating unique wellness experiences. That means not only leveraging the market- and revenue-building potential of the spa facility, but also capitalising on other services the hotel can provide, from water sports and yoga to trekking or cycling. Unique packages with post-activity relaxation or rejuvenation are an easy sell.
They can also make your property stand out in a crowded marketplace. Picture this: your client is browsing online with a view to taking a vacation in the Caribbean. They find a swathe of appealing high-end resorts, each with a price point of around $1,500 per night. Which one do they choose?
Most likely it’s the resort with an attractive point of differentiation, igniting a spark of excitement and butterflies in the belly. It’s the one that tells a story about the memorable experience it can offer them and their family – exploring the local culture in the mountains followed by a treatment using healing indigenous ingredients; or a group yoga session combined with use of the private spa pavilion with tailored cuisine.
Without any capex, this integrated approach can influence the booking decision, thereby raising room revenues and opening up opportunities for incremental F&B sales, and channel more business to the spa – often for a series of services over the stay and/or for multiple family members.
Implement incremental revenue drivers
Spas are business units that need more TLC. If commercial teams work with spa and wellness teams to create the experience, and the PR and marketing team communicates this to guests with storytelling, good things can happen – a revenue-driving wellness hub emerges.
This ethos can be applied to any other elements of your hotel asset – from ballrooms to outdoor spaces, attractions to private dining rooms. Rethinking ways to elevate venues and resources into meaningful experiences will build out your bottom line.
Here are some other top tips for optimizing your spa’s potential:
1. Massage demand and supply: Do your spa treatment rooms, therapists and offerings correlate to the demand patterns of your clients? Are all your therapists utilised during busy periods, but not all the treatment rooms? Identify demand peaks and troughs; understand the reasons why; and allocate resources accordingly.
2. Train a commercial mindset: During busy times, are you leaving it to the customer to choose which treatment to book, or is the team trained to allocate the treatments, durations and therapists that have the highest profit margins?
3. All systems go: Collecting and analyzing clean data is crucial and there are several great business intelligence tools designed to disseminate spa performance. Segment the business so the data translates into storytelling that everyone can understand. When are your most/least popular time slots and why?
4. Set clear team KPIs: Work proactively with sales, marketing, PR and revenue management to leverage business ahead of time. Be proactive not reactive – it’s not just what treatments you offer and how they are delivered, but how you promote them too.
5. Design for success: If you have the luxury of developing a new spa concept from scratch, work with a revenue optimization expert during the design process. They will liaise with the architect, owner and operator to ensure floor space is optimized – it’s all about best ROI per square meter. Dead spaces are out; fully utilized spaces are in.
Research reveals customers spend 15% more on items with attractive names.”
Judith Cartwright
Boost revenue power with spa menu engineering
Use your business intelligence tools to determine which items on the spa menu are profitable, cost-heavy or not selling at all, so you can “engineer” them. You can use a menu engineering grid which cross-references profitability and popularity to help you identify:
Puzzles: Treatments that are not popular, but have high profitability and therefore, untapped potential. Consider changing the name and description and ask your reception staff to promote these to guests to increase sales.
Stars: Popular and profitable: definitely keep those on the spa menu.
Dogs: Removing these from the spa menu may or may not be the right solution. These could be turned into stars by analyzing pricing, costs and menu placement.
Horses: These are well-loved treatments that are not profitable, at least not yet. Consider a review of pricing and cost, as well as timing.
Once you understand how your spa menu items perform, move on to a pricing and benchmarking exercise; what is the right price for the right customer at the right time?
Seasonality is crucial too. A high-season customer has greater spending power than a low-season customer. This does not mean you discount or compromise your product for the low-season customer, but you could offer a bundle featuring a few treatments or a treatment and an F&B offer, or even an early-bird special during your shoulder periods.
Menu wording is crucial as well. Research reveals customers spend 15% more on items with attractive names. So get creative with your wellness offering descriptions, taking your customers on a feel-good journey.
Transforming your spa into a experiential wellness hub is the healthiest way to profit, so you can take a breath and relax.
Judith Cartwright, International Society of Hotel Consultants (ISHC), is founder and managing director, Black Coral Consulting, Dubai, and chair of the Revenue Optimisation Advisory Board for HSMAI ME.
The opinions expressed in this column do not necessarily reflect the opinions of Hotel Investment Today or Northstar Travel Group and its affiliated companies.