What IsYour Spa's 'Healthy' Bottom Line?
By Casey Olsen Owner, Spa Sources | June 15, 2010
In today's spa realm, the vast majority of resort and day spas with ample treatment rooms are typically looking at a 20 - 30% bottom line. This has become the mantra for this department's profit. Many moons ago when I began in this industry as the Spa Director of the 65,000 square foot spa at La Costa in northern San Diego County, my focus was, of course on guest service, but also my departments' financial success. Fortunately, I had a great Chief Financial Officer that worked closely with me on streamlining my operation. I had graduated from college with a degree in Business, so, unlike many of today's Spa managers, I had a real interest in the "numbers."
Upon my arrival to that property, the spa department was looking at a $2 + million annual income with a 35% net (no, that is not a typo, $2 million!) and within a year I brought that number to $4,200,000 per annum with a 47% departmental net profit. Granted, this was an enormous spa facility with tons and tons of treatment rooms, but there is no reason why the formula used here cannot be translated to all spas, regardless of their size.
Well, I take that back. If you have a facility that has 10 rooms and the overall facility offers little in the way of amenities, then achieving a 45% profit may be more of a challenge. But if you are operating a facility with 20 + treatment rooms, then it is more than possible to reach that kind of spread.
Normally, when I am asked by a General Manager or an Owner to come to an existing property to work with their Spa Director my first stop is the Reception Desk of the spa. Often, a Spa GM will not alert the department to my arrival and I check in as a typical spa guest, so that I can see how the spa is "really operating".
My first focus is service. No matter the experience of the Spa Manager, if they have not consistently trained and guided their staff to cater, cater and cater some more to their visitor, we can stop right here. Without personal pampering from the spa staff, your full potential is already not being reached. After all, why go to a spa if not to be pampered? In a previous article I outlined steps to return to service in your spa. When a guest leaves your spa, they will proclaim their experience as being either an enjoyable one or not. And, believe it or not, no matter if you have a 5 star spa facility or a 3 star, if the guest is treated like a king or a queen, they may comment briefly on the facility itself, but they will go on to rave about how special they were made to feel by the staff.
OK, back to the Reception Desk staff. My read here is all about friendly and gentle up-selling. Once your guest has requested the treatment that they desire, your Reception staff should nicely state,"Great, Mrs. Smith, I have you set for your massage, but I also might suggest that you try one of our terrific scrubs that blends perfectly with your massage treatment and will make your skin feel incredibly soft. Can I schedule this in with your massage?"