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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Coming up in February 2018...

Social Media: Engagement is Key

There are currently 2.3 billion active users of social media networks and savvy hotel operators have incorporated social media into their marketing mix. There are a few Goliath channels on which one must have a presence (Facebook & Twitter) but there are also several newer upstart channels (Instagram, Snapchat &WeChat, for example) that merit consideration. With its 1.86 billion users, Facebook is a dominant platform where operators can drive brand awareness, facilitate bookings, offer incentives and collect sought-after reviews. Twitter's 284 million users generate 500 million tweets per day, and operators can use its platform for lead generation, building loyalty, and guest interaction. Instagram was originally a small photo-sharing site but it has blown up into a massive photo and video channel. The site can be used to post photos of the hotel property, as well as creating Instagram Stories - personal videos that disappear from the channel after 24 hours. In this regard, Instagram and Snapchat are now in direct competition. WeChat is a Chinese company whose aim is to be the App for Everything - instant messaging, social media, shopping and payment services - all in a single platform. In addition to these channels, blogging continues to be a popular method to establish leadership, enhance reputations, and engage with customers in a direct and personal way. The key to effective use of all social media is to find out where your customers are and then, to the fullest extent possible, engage with them on a personal level. This engagement is what creates a personal connection and sustains brand loyalty. The February Hotel Business Review will explore these issues and examine how some hotels are successfully integrating social media into their operations.