More Spa Profitability - How, When, Where...

By Jane Segerberg Founder & President, Segerberg Spa Consulting, LLC | August 09, 2010

As a major player in the Hospitality Industry, spas have become independent profit centers that justify their existence with bottom line income that adds to overall resort profitability. In addition, spas can enhance resort/hotel occupancy, length of stay and occupancy ratios. Spas also provide the type of experience that all guests want and hotels/resorts should strive to provide throughout the property - a memorable experience that is caring, warm, empathetic and creative.

It is no wonder that the number of spas in hotels/resorts continue to grow at a rapid rate. The result of rapid growth, of course, is increased competition. The combination of intense competition, a very savvy spa clientele that demands exceptional experiences and mounting staff turnover requires a serious look at current spa operating and compensation models. Guests want a specialized experience that is more than the plush robe and cup of tea, while spa staff demands a pleasant work atmosphere, motivation and adequate compensation. It becomes rapidly apparent that having an attractive spa that merely provides efficient service is critical but does not define success. As the number of spas increase so do guest and staff expectations and loyalty to any one spa decreases.

The goal, here, is to increase the level of profit while at the same time building an increase in both guest and staff happiness and loyalty that in turn grows more profit and recognition for the resort/hotel property. To remain competitive, spas need to provide superior, insightful service at every service touch point and develop a deeper relationship with each guest. By operating efficiently during periods of high demand and creatively increasing business during mid to slower periods, spas can increase their net profit. Incentives throughout the spa can assist in keeping staff focused on creatively engaging guests in more services and opportunities while also generating better guest service and loyalty.

The Case for Incentives

You probably began reading this article to discover a few tactics to beef up the weaker financial areas of your spa. Actually, incentive strategy programs that are managed well create a perfect cycle of happier employees taking better care of guests who are pleased to spend more for additional services and retail while visiting the spa and are even more delighted to return. Staff is excited to deliver a guest experience that goes beyond normal standard operating procedures. A planned incentive strategy rewards positive behavior which results in a high level of performance at each guest interaction.

The rapid growth of new spas has exposed staff to many more opportunities causing an increase in staff turnover rates. Incentive pay recognizes staff for a job well done and develops a contented staff that will remain loyal to the spa business. Incentives coupled with good communication from management and good communication between spa departments promotes a higher level of esprit de corps which filters throughout the spa to all guests and further increases guest satisfaction.

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Coming up in June 2019...

Sales & Marketing: Selling Experiences

There are innumerable strategies that Hotel Sales and Marketing Directors employ to find, engage and entice guests to their property, and those strategies are constantly evolving. A breakthrough technology, pioneering platform, or even a simple algorithm update can cause new trends to emerge and upend the best laid plans. Sales and marketing departments must remain agile so they can adapt to the ever changing digital landscape. As an example, the popularity of virtual reality is on the rise, as 360 interactive technologies become more mainstream. Chatbots and artificial intelligence are also poised to become the next big things, as they take guest personalization to a whole new level. But one sales and marketing trend that is currently resulting in major benefits for hotels is experiential marketing - the effort to deliver an experience to potential guests. Mainly this is accomplished through the creative use of video and images, and by utilizing what has become known as User Generated Content. By sharing actual personal content (videos and pictures) from satisfied guests who have experienced the delights of a property, prospective guests can more easily imagine themselves having the same experience. Similarly, Hotel Generated Content is equally important. Hotels are more than beds and effective video presentations can tell a compelling story - a story about what makes the hotel appealing and unique. A video walk-through of rooms is essential, as are video tours in different areas of a hotel. The goal is to highlight what makes the property exceptional, but also to show real people having real fun - an experience that prospective guests can have too. The June Hotel Business Review will report on some of these issues and strategies, and examine how some sales and marketing professionals are integrating them into their operations.