Spa Payroll and the Implosion Factor

By Jane Segerberg Founder & President, Segerberg Spa Consulting, LLC | October 28, 2008

During the current era of "infatuation with anything spa", it seems contradictory to mention the possibility of the implosion of spa businesses. After all, spas are still the "hot topic" and a highly desired and sought after travel and vacation experience. The reality is the Spa Industry has crossed the bridge from "build it and they will come" to consumer accountability, internal controls and business sustainability. Spas are more prolific now than five years ago. Spa consumers are increasing in numbers and spa consumer expectations are rising. With more spas and more savvy spa consumers, it is a time in the Spa Industry in which the cream will rise to the top and all others will fall by the wayside.

Your spa should provide increased business and visibility for your hotel/resort property as well as be a profitable department. High levels of service in the spa create a powerfully satisfying experience for each guest's visit. The spa experience is much more than just a service. It is a total hospitality experience. The experience not only includes the reserved treatment, but also the guest's entry and welcome to the spa, introduction to the facility, assistance during the pre treatment changing and relaxation activity along with the post treatment relaxation and closing experiences. The entire experience when orchestrated and managed to perfection is one delightfully smooth and consistent package. The challenge is in turning the expected high level of service into profit.

It is easy to understand that creating relaxing and memorable spa experiences for guests adds to the overall satisfaction of the guest's entire stay at your property. Spas can assist in illuminating a hotel/resort's excellent attributes. In addition to being a distinctive element of the property's overall image and positioning, it is also important that spas participate in contributing to overall resort profitability.

Choose your payroll control strategy wisely, or run the risk of creating a negative domino effect.

The very nature of the spa experience that makes it so successful - the high level of nurturing and one-on-one attention, is also the most costly element that can lead to the demise of its profitability. A quick glance at the spa's monthly statement clearly shows that spa payroll is the biggest expense line. Controlling total payroll wisely is necessary for spa sustainability and profitability. But, beware, choose your spa's profitability strategy wisely or run the risk of creating a negative domino effect that affects your spa's level of service and marketability and will eventually implode the business.

Profitability in the spa goes up dramatically when total salaries and wages drops below forty eight to fifty percent. Unfortunately, the spa experience is often seen solely as a treatment delivered by the service provider and not as a series of interconnected service touch points that delight and satisfy guest's needs. Payroll control that is focused on meeting the payroll demands of service providers while cutting back on leadership diminishes the orchestration and management of the full spa guest experience, causing its decline. Lack of strong leadership results in service that is inconsistent or non existent with guests feeling shortchanged. Without expert direction, the downward spiral of business sense continues as forecasting and scheduling staff converts to a lower priority resulting in less available service providers (I can't begin to list the number of times we have visited spas who were turning guests away, yet treatment rooms were empty). The very vision that enables a spa to be more progressive and create more business, including retail sales is diminished. The end result is reduced business, focus, leadership and service.

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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.