Are Your Spa Services Really Driving Profit?
By Peggy Borgman President, Preston Wynne, Inc. | October 28, 2008
One obvious direct cost is the supplies used in treatments. We like to see service supply costs around 5% on average.
Let's see how gross profit can fluctuate based on the cost of the supplies we use.
Price of Swedish Massage: $100.00
For example, your hotel spa may have fixed costs that run at about 50% of revenues (overhead numbers are not always fully extractable, depending on how your expenses are allocated to the spa on the property's P & L) Let's see what happens if, with that same hour, in that same room, we sell a body treatment, with a higher supply cost, at a bit higher price.
Price of Jasmine Body Bliss: $105.00
Ouch. We have just 5% net profit after we pay our fixed costs (-50%).
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