Spa Profitability: Success in the New Economy

By Jane Segerberg Founder & President, Segerberg Spa Consulting, LLC | November 06, 2011

Everyone will agree, post 2008 we have seen changes and challenges galore in the spa and hospitality industries. The Spa Industry's wheezing financials are in an uphill battle to regain the profit margins earned prior to the last four years and recapturing revenues is a moving target. Our spa and hotel guests along with consumers in general are more discerning, pickier and more tech savvy than ever before. Value is celebrated as the latest and most sophisticated trend and no one wants to overpay for the service or product they receive. Truly, the current economy is the acid test of any spa brand.

The most recent statistics released by the International Spa Association indicate that U.S. spa revenues in 2010 increased by 4% over 2009 according to the study completed by PricewaterhouseCoopers exclusively for ISPA. In addition, the study reports that Spa visits increased approximately 5% from 143 million to 150 million. While the percentages are small, they are good news and a start toward economic recovery. What do we do to continue the uphill climb and win guests over and over again? The answer is simple. Intensify our focus on the comfort and care of our guests. Delivering comfort is the keystone of universal mission of spas. It manifests itself in the building layout, furnishings, amenities and most of all in the service delivery of the spa experience.

Have a break anywhere in the chain, whether due to building layout, product offering or staffing snafus and it will send the spa guest looking for a better spa and posting less than stellar reviews on travel websites. Through consumer feedback sites and social media guests know how their peers valued their experiences and can make the decision as to whether the price is worth paying. The word in vogue is "value" and our guests make their decisions accordingly.

Stepping back 10,000 feet for the big picture view; the comfort, care and value our guests experience are affected by the planning, management and overall experience delivery of the spa. At this moment, we are focusing on the delivery of the experience and this article will briefly mention planning and management which affect the ability to deliver a memorable experience.


Beginning with new builds, planning continues through renovations and is a constant factor in management. Planning new and renovated spaces with the overriding mission of caring for guest comfort requires a design process that promotes design efficiency. Ease of orientation and guest flow where guests have privacy and staff can efficiently service each guest touchpoint are the hallmarks of design efficiency. Because well-conceived and well-planned spas are very intricate, it is important to have the full team of designers, engineers and equipment providers involved along with operational staff or a spa consultant with operations experience involved during space planning. Full team involvement reduces change orders and ultimately the cost of the project while achieving efficient results. Bringing the spa's concept to life begins with the space planning process and ends with the spa's program of services, staff quality and thorough staff training.

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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.