Mr. Henkin

Spas, Health & Fitness

Driving Spa Revenue - Secrets to Success

By Gary Henkin, President & Founder, WTS International

In today's extremely competitive marketplace for the spa/consumer dollar, it is ever more important to take the steps necessary to position your spa for financial success. This is particularly true with regard to taking the appropriate step in planning effectively to drive revenue through a creative promotion and marketing effort. In many cases, spas offer unique and delineative design elements, diverse treatment menus and a friendly and attentive staff. However, not enough attention is paid to taking the steps necessary to consistently drive revenue and enhance the opportunity for a positive bottom line. This can only be achieved by focusing on a number of steps that, in combination with the development of a viable sales and marketing plan, will drive enough revenue to offset the considerable expenses associated with spa operations. Whether you plan to add a spa to your hotel or resort or if you already have one in place, this article will detail a number of ways to plan for a more vibrant revenue stream. Topics for discussion include the importance of staff training and motivation; the retail opportunity; the critical nature of integrating your spa into the fabric of the hotel or resort; data management and use of the internet in driving revenue and why you should consider having a person dedicated solely to providing sales and promotion for the spa among other ideas and recommendations.

There is an assumption that is prevalent among owners and developers who are considering the inclusion of a spa which is that a spa which is operationally sound will ultimately drive enough revenue to generate a positive bottom line. This is not a given, particularly in urban spas, in what has become a highly competitive marketplace. Thus, creative promotion combined with consistent staff training, public relations, advertising and grass roots sales efforts have become ever more important to generating consistent revenue which is enough to produce a positive net operating income for the spa.

All too often, hotel developers assume that in adding a spa to their facility, it will automatically produce revenue enough to compensate for labor and all other operating expenses. In other words, there is the assumption that "if you build it, they will come" and that the development of a spa will almost always drive enough revenue to create a net operating profit. Though spas have proliferated during the past several years, it is a mistake to assume that having a spa will inevitably produce black ink unto itself. There are numerous keys with regard to driving spa revenue effectively. Several keys to success are outlined below.

Develop a well thought out marketing plan

Many spas are opened without the benefit of a viable sales and promotion plan. Don't make this critical mistake. Write out a plan to attack proactively both the internal and external markets. Without the benefit of a well thought out plan, there won't be a focused and targeted approach to driving revenue, and it isn't likely that your spa will be profitable. ** **

Effectively integrate the spa into the hotel

In order to maximize revenue it is crucial to ensure that your spa is integrated completely within each department at the hotel. This includes making sure that there is consistent communication between the Spa Director and the hotel's marketing department, concierge, food and beverage areas, reception and other key departments. In many instances, spas aren't effectively promoted at the consumer touch points within the hotel, and this will negatively impact revenue generation.

Drive revenue through multiple avenues

Don't put all of your promotional eggs in one basket. Namely, use a multitude of approaches for exposing the spa to both hotel guests and to the external non-guest population. Many spa owners focus all or much of their promotional efforts through advertising in local papers, magazines and newsletters. While an advertising campaign is certainly important and can produce significant dividends, it is equally important to consider the impact of effective public relations. A favorable article in a local or regional publication may be more effective in delineating the spa from the competition while sparking non-guest revenue. Other considerations should include a direct mail campaign, open houses and hard hat tours, email blasts and creative grass roots promotions. The point is to utilize several options to maximize exposure for the spa.

Exposure within the hotel is key

Make certain that your collateral are prepared well in advance of the spa's opening for placement in-room, at reception, concierge desk, signage in elevators, etc. A welcome packet for individual travelers and groups is a wonderful addition which creates perceived value for both the spa and for the hotel. Train hotel staff to know what is special about your spa; one effective way to do this is to offer spa treatments to bell staff, hotel receptionists, restaurant personnel, sales department staff, etc. The more touch points within the hotel where the spa is exposed, the better.

Employ a Sales Director

Whenever possible, this position should be allocated as part of the facility's operating budget. Having a dedicated point person to head a proactive sales/marketing effort will typically more than pay for costs associated with this position. Without daily focus on driving revenue, the odds to maximize revenue and profits will shrink.

Create and maintain a guest database and online bookings

Make sure that this is in place before your spa opens. It is critical to track your spa goers and to follow them for potential purchases from home. Gift certificate sales in particular can be increased through effective promotional campaigns utilizing the spa's database. In addition, the spa should be able to accept bookings through its web site in advance of the patron's on site visit. It is vital to create an appealing web site that is easy to navigate.

Think about creating a spa membership

This isn't always possible. However, where there is a potential market for non-guest traffic, this can be an extremely viable source of added revenue.

Don't overlook gift certificate sales

This can be an enormous revenue generator for your spa. If promoted appropriately (both internally and over the internet), this area can drive significant revenue particularly during holidays and special occasions.

Retail, retail, retail

Make certain that you pay enough attention to a critical area with regard to revenue generation and profits. Not enough consistent training of therapists and estheticians is done in this area, and all too often product lines which aren't selling are left on the shelves too long. Make certain that your retail products are consistently promoted, packaged and exposed to your patrons.

There is no "magic bullet" to effectively driving revenue. In today's competitive marketplace, one needs to utilize a variety of options to maximize revenue. Create a plan well in advance of opening which spells out with precision how a revenue stream will be developed. Then, EXECUTE the plan effectively. In doing so, it is far more likely that the spa will achieve your financial goals.

President and Founder of WTS International, Gary Henkin has 30 years in the planning, design and management of health clubs, spas and athletic facilities. He has developed feasibility and needs assessment studies for spa and/or health club properties. WTS has become one of the world’s largest and fastest-growing leisure consulting and operating firms. The firm has about 1,000 employees worldwide and provides services to hotels, resorts, luxury residential properties, exclusive golf and country clubs, day spas and real estate developments throughout the United States and overseas. Mr. Henkin can be contacted at 301-622-7800 or ghenkin@wtsinternational.com Extended Bio...

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