How to Turn the Well-Being of Your Guests into a Viable Indicator of ROI

By Robert Vance Managing Director, Well & Being Spa, Fairmont Scottsdale Princess | July 16, 2017

Wellness tourism not only drives revenue, it is a required service for any luxury property. Total revenue for the spa industry surpassed $16 billion in 2015 and is anticipated to exceed $20 billion by 2020. Further encouragement, a recent ISPA study showed that 56% of millennials have visited a spa within the last year; never have we seen a demographic so involved in wellness. Guests are savvier when it comes to healthy hotel concepts and hold higher programming expectations. Thus, as the hospitality industry commits to developing wellness platforms, the rewards of investing in guest health far outweigh the risks.

Investing in Wellness Programming, Technology and Education

Through wellness tourism, the intangible concepts of physical and mental well-being have become trackable and quantifiable indicators of ROI. To determine whether an investment in wellness is sound, the developer must understand the associated costs of the wellness platform. These associated costs are often incurred before the spa even begins to offer the first guest service, and will require the justification with key decision makers. Some costs can be capitalized, but most are going to hit the business’ profit and loss statement. Therefore, it is essential to complete a full analysis of your proposed wellness offering before committing to the specific services.

The Costs

Training your staff in the proper protocol for a spa offering can incur numerous costs. Some of the costs to consider include the travel expenses for the trainers, room and board at your property as well as food and beverage while they are on-site. Staff payroll will need to be incorporated while the spa team undergoes training, which is often a fixed hourly rate established as “training pay.” Depending on the complexity of the offering, you may need to anticipate multiple days in the training. Another cost to be considered is the necessary technology for the offering. For example, Well & Being Spa at the Fairmont Scottsdale Princess offers the BodPod, which is a Gold Standard machine that determines a guest’s body composition including fat and lean-mass ratio. The actual unit has a proprietary computer system that requires training on how to perform the service, constant upgrades to the software and regular system support, which translates to added costs for the property to offer the service.

Another significant cost to consider is spa and fitness equipment. Often, the smaller the equipment, the more expensive it runs. Proprietary technology is typically more expensive and doesn’t allow for sourcing from a third-party supplier. When it comes to equipment needs, you must also identify if there are fixed monthly expenses that you will incur and include those costs in your analysis. For instance, if you are required to pay a rental or licensing fee of $950 on a monthly basis, consider how many sessions or services featuring this equipment will be needed in order to break even. Additionally, are there any consumable products or collateral that will incur regular costs, such as printed menus, samples or VIP gifts? It’s also worth considering how the payroll be influenced for certain services. Some specialized services will require a higher commission for the technician because of additional qualifications or training. It’s easy to see how decision makers would be hesitant to commit after an initial analysis of the costs associated with a single service, but before dismissing the offering, we assess the potential returns.

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Human Resources: Value Creation

Businesses must evolve to stay competitive and this is also true of employment positions within those organizations. In the hotel industry, for example, the role that HR professionals perform continues to broaden and expand. Today, they are generally responsible for five key areas - government compliance; payroll and benefits; employee acquisition and retention; training and development; and organizational structure and culture. In this enlarged capacity, HR professionals are no longer seen as part of an administrative cost center, but rather as a member of the leadership team that creates strategic value within their organization. HR professionals help to define company policies and plans; enact and enforce systems of accountability; and utilize definable metrics to measure and justify outcomes. Of course, there are always new issues for HR professionals to address. Though seemingly safe for the moment, will the Affordable Care Act ultimately be repealed and replaced and, if so, what will the ramifications be? There are issues pertaining to Millennials in the workforce and women in leadership roles, as well as determining the appropriate use of social media within the organization. There are new onboarding processes and e-learning training platforms to evaluate, in addition to keeping abreast of political issues like the minimum wage hike movement, or the re-evaluation of overtime rules. Finally, there are genuine immigration and deportation issues that affect HR professionals, especially if they are located in Dreamer Cities, or employ a workforce that could be adversely impacted by federal government policies. The March Hotel Business Review will take a look at some of the issues, strategies and techniques that HR professionals are employing to create and sustain value in their organization.