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Hotel Spa Revenues Remain Strong

Hotel Spa Revenues Remain Strong

Similar to all department heads within hotels, spa managers are concerned about the less controllable benefits component of labor costs. During 2012, payroll-related expenses increased by 8.2 percent, while salaries, wages, and benefits grew by 4.9 percent. This is why travel industry trade associations are monitoring legislation regarding mandated employee-related taxes and benefits.

“Fortunately for hotel spa operators, many spa technicians work as independent contractors and therefore are not necessarily eligible to receive a full package of benefits. Payroll-related expenses within hotel spas averaged 22.8 percent of total labor costs in 2012 compared to an average of 29.6 percent for all hotel employees,” noted Foster.

Profit Values Up
Despite the decline in department profit margins, hotel spas were able to achieve growth in departmental income. In aggregate, spa department profits for the spa Trends sample increased by 4.2 percent in 2012. Achieving greater revenue growth, urban hotel spas also were able to enjoy more growth on the bottom-line compared to resort hotel spas.

Influence Beyond The Spa
The impact of spas on the overall performance of a hotel is difficult to measure. Research in the area has found that hotels with spas often achieve higher average daily rates and that spas do induce some degree of lodging demand. However, it is difficult to determine whether these positive performance observations are causal or coincidental.

“Though difficult to quantify the full economic effect of spas, we expect their impact to expand in the coming years,” said Foster. “With a shifting focus to healthier lifestyles, born of both growing awareness and of necessity with our population’s poor health and resulting increases healthcare costs, we expect to see more demand for spa- and wellness-related services and experiences, both within the spa itself and beyond the spa walls in other areas of the hotel.”

Inspired by the spa, some hotels’ wellness-oriented guest rooms are being equipped with special lighting, wake-up and nighttime light therapy, vitamin-infused showers, air purification and water-filtration systems, and wellness-focused television channels to provide a fully-rested and recharged stay. Food and beverage menus include healthier selections, and fitness centers are being upgraded to inspire guests to stay active while away from home.

“Many of these new additions are not part of the spa department itself. Therefore, the resulting revenue generated will not be reflected as spa-related on the hotel’s income statement. However, spas set the foundation for these experiences, and as guests try out and enjoy these wellness-oriented offerings, hotels should able to convert them to spa guests,” concluded Foster.

Photo credit: Couple in Spa via Bigstock

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