Mr. Pulito

Spas, Health & Fitness

Marketing Spa Memberships as the Way To Spa Profitability

By Chris Pulito, Chief Operating Officer, Mirbeau Hospitality Services

A 34-room resort with a 14,000 square foot spa. Question one: How does one make that spa profitable? Question two: How does one make that spa possible when the property is located, not in New York City, but in Skaneateles, New York?

To answer those questions, let’s first set the stage:

Situated on 12 acres of forested parkland in the quaint storybook village of Skaneateles, Mirbeau Inn & Spa is an idyllic resort getaway in Central New York’s Finger Lake region. Just minutes from Skaneateles Lake, one of the cleanest and most picturesque lakes in America, Mirbeau Inn & Spa is surrounded by beautifully landscaped ponds and impressionist gardens, giving the resort a French provincial feel. From the moment of arrival, Mirbeau’s guests are invited to leave their daily worries behind.

The property encompasses six beautifully designed buildings inspired by French Country design that house a total of 34 guestrooms. The resort combines the amenities of a boutique country inn, a world-class spa and nationally acclaimed fine dining with the elegant comforts and residential feel of a wine country estate.

The centerpiece of the inn is its 14,000-square-foot award-winning Spa Mirbeau. In collaboration with noted spa designer Sylvia Sepielli, the state-of-the-art facility was designed to provide tranquility, soothe the senses and bring balance back to the lives of its guests.

Spa goers enjoy rejuvenating and life-balancing services in a protected place of elegance and comfort. The spa draws on the richness of the surrounding natural environment to offer a balanced program of classic and modern massages, body wraps, mineral steam baths, facial treatments and vinotherapy.

Spa Mirbeau features:

• 18 treatment stations, most with fireplaces and private sound systems
• A unique Resting Area located in the heart of the spa with a warming fireplace and heated foot massage pool
• The year-round Aqua Terrace, an outdoor oasis offering a relaxing hot tub, crackling fire and an intimate bar and dining area for small plates and beverages
• Nail salon
• State-of-the-art fitness center with aerobic exercise and weight rooms
• Expert-led fitness classes
• Motion and dance studio
• Health and nutritional consultations
• Retail gift shop

So how does this spa engine operate?

From the resort’s inception, the vision was to position it not as a place – a mere location for a vacation -- but as true getaway, a retreat, an environment that would support guests in restoring balance to their busy lives. From the very beginning, the spa has been integral to this mission, and, as such, has been frequented by overnight guests to the Inn.

So even if the resort runs full seven days a week, 365 days a year, how do those spa metrics work?

The answer is in generating spa memberships and day spa visits from the local and regional community.

Just as the conference center concept set hotel industry metrics on its ear by using meeting space rather than hotel rooms as the primary revenue generator, at Mirbeau Inn & Spa, our Spa Mirbeau serves as the hub of the operation -- the catalyst that not only takes in revenue, but also drives it through all other revenue-producing departments of the operation. This article explains how this works at Mirbeau, and provides guidance for others seeking to maximize profits from their spa operations.

How Mirbeau Does It

Whether you operate a day spa, hotel spa, resort spa, destination spa or medical spa, there is room in your operation for a spa membership. It might be a traditional membership that incorporates activities in and around your spa – ranging from treatments and retail for day spas to those offerings plus food & beverage and activities (golf, tennis, fitness) in hotel, resort or destination spas.

Rather than a traditional membership, you might consider a spa membership which, in contrast to benefits that focus on “doing”, offers benefits that focus on “being” – in this case, wellbeing. At Mirbeau, we have built spa memberships that are built around the idea that “frequent visits make you feel good.” As a result, we have been able to create a revenue stream that increases spa profits, drives revenue in other departments of the operation, and funds spa programs.

How do we do it? Here is a primer:

Rule #1: Do not complete with gyms, country clubs and community centers. Make the membership mean more than mere activity.

Rule #2: Focus the membership around guest service, protected environments, mind, body and spiritual health. Create customized programming that is geared to the total well-being of your members. A balanced life is more than just fitness, it requires feeling good so wine tasting classes and a cooking demonstrations can truly enhance ones “well being” also

Rule #3: Get your members involved and engaged with the property. The more they feel a part of the spa, the more they will spend, and not only in the spa, but in the retail shop, bar and dining room as well.

The Pros and Cons of Spa Membership Programs

In evaluating the feasibility of a spa membership in your property, consider the pros and cons, some logistical and others strategic:

Pros

• Ability to generate additional revenue – membership dues flow through at 85-90% to the bottom line
• Little new payroll required – spa fixed payroll typically does not increase
• Few additional expenses – limited to utilities, amenity consumption, laundry and marketing
• Year-round traffic in the spa – members provide life and energy
• Up tick in treatment, retail and food and beverage sales – especially valuable during need periods
• Generate funding to enhance additional spa programming – this can be directed to both members and spa guests, creating extra perceived value for your hotel guests

Cons

• You may have limited locker room facilities
• Potential of overcrowding in classes
• Limited fitness equipment space
• Possible personality conflicts with spa treatment guests

A solution to the “cons” may be found in offering a variety of access levels, selling a limited number of memberships, and offering special promotions and pricing to steer members to non-peak times. Analyze the options for your particular property and see what kind of spa membership your facility and operation can sustain over the long-term.

Apply Yield Management – and Communicate Regularly

A spa membership program can further be managed through a tight yield management program. One effective type of yield management is simply to offer different levels of Access with each type of membership. They could be Midweek only, Specific Facility only (fitness but not spa if you have separate locker rooms) and of course the All Access “Platinum” Membership that is prices to justify the extra traffic during your busy times. Other example for spas with less fitness and activities are, use pricing to steer members towards the times of day and days of the week that fill your “need” or slow periods. In a resort, for example, you can institute a “Spa Night Membership”, giving 20% off for services after 6:00 p.m. In a city hotel, conversely, a “Spa Day Membership” may highlight 20% off of all services Monday-Friday from 8:00 a.m. – 4:00 p.m. while the typical transient guest is out of the hotel on business.

Regardless of the membership structure you offer, communication is key. We recommend a consistent level of outreach in several distinct ways, including:

• Monthly e-newsletters with useful information, member recognition rewards, special events, activity schedules and targeted specials for down times
• Social media communication via Facebook and Twitter; invite members to weigh in on their favorite treatments, programs, menu items, etc., and incentivize them to be engaged in the property through social media
• A central member information display on property
• A member log-in to increase member interaction with the spa desk, ensure superior guest service and to track usage

We’re also big believers in recruiting members versus advertising for them. Here are five key tenets for recruiting new members:

1. Host dual purpose events that are both a new member open house and current member appreciation
2. Offer referral incentives for current members to bring new members to the spa
3. Consistently position your spa membership as a unique environment that provides an overall mind/body/spiritual experience
4. Identify local/regional events that focus on your key demographic, i.e., a high profile triathlon or local charity event and give away a membership to create buzz
5. Remember that word of mouth will sell 10 times the memberships that advertising will. Treat your members well and they will recruit and “advertise” for you.

When you look at the metrics of spa memberships, the numbers can add up quickly. Hypothetically, every 100 memberships at $1,000/year produces $100,000 of gross revenue and will likely produce $85,000-$90,000 in profit. It would take, on average, upwards of $180,000 in retail sales at 50% profit... or $300,000 in treatment sales at 28% profit…or $450,000 in food and beverage sales at 20% profit to get to the same number. The bottom line: Spa memberships play a key role in increasing spa profits and driving revenue for the entire facility.

Chris Pulito is Chief Operating Officer of Mirbeau Hospitality Services, a specialized hospitality management company that provides management and consulting services for high service hotels, resorts and spas. The company draws upon its 10 years of success with Mirbeau Inn & Spa, the acclaimed spa resort that is consistently rated among the world’s best for its hotel, spa and dining experience. It is located in the Finger Lakes Region of New York State in the idyllic town of Skaneateles. Mr. Pulito has more than 16 years of luxury hospitality and spa management experience including the Mirbeau Inn & Spa where he previously served as Spa Director and currently serves the dual role of General Manager. Mr. Pulito can be contacted at cpulito@mirbeau.com Extended Bio...

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