Spa Operations: 10 Effective Ways to Create a Positive Bottom Line

By Gary Henkin President & Founder, WTS International | April 24, 2010

Operating revenue can be generated from numerous sources. This includes income from spa services (massage, facials, body treatments, nail services and salon/beauty). In addition, significant income can be derived from spa product sales as well as daily usage fees and/or "spa membership" sales. As critical as it is to set the stage for a smooth launch for a newly developed spa, it is even more crucial to develop a systematic approach to ensure that operational goals, both from a customer service and financial perspective are met.

In a recent industry study, it was reported that hotel spa revenues averaged just over $130 per square foot, or about $115,000 per revenue station (treatment rooms and salon stations). Massage is still the king of all spa treatments; combined with facials and body wraps. Services/treatments still represent over 70% of all departmental spa revenue. The good news is that the study indicates that spa department profits continue to rise with resort hotel profit margins higher than those of urban properties by almost a two to one margin.

There are numerous concerns and potential pitfalls when operating a spa. Typical mistakes abound, but so do opportunities. Several are outlined below.

1. Staff Selection and Training

Finding and retaining qualified staff is a significant and ongoing challenge. This includes not only the Spa Director position but service providers (therapists, estheticians, nail technicians, etc.). Offering consistent educational programs, training and support combined with benefits such as a staff break room to relax and on-site meals is vital to attracting and retaining a quality staff. All too often, hotels overlook the importance of allowing for a continuing education program and spaces within the spa to allow for staff (and not just guest) relaxation. Thus, one of the biggest problems in hotel spas today is the constant turnover of personnel. Another typical mistake is to hire the Spa Director based primarily on the person's experience or resume without due consideration given to the individual's "core qualities" (leadership and communication skills, business, acumen, enthusiasm, work ethic, etc.). A thorough training process including business skills should be in place as many Spa Directors and service providers are focused more on delivering the experience and less in the delivery of revenue generation, promotion, expense management and the operation of the spa as a business unit. When you hire new staff, consider carefully these core qualities and not just the candidate's resume and past experience. This is the most important decision you will make, and the right staff selection and continuous training will give your spa the best chance for operational and financial success.

2. Efficient Scheduling of Staff is Crucial

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