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Hotel Spas Profit From the Wellness Trend

Hotel Spas Profit From the Wellness Trend

“This data suggests hotel guests are considering their health and wellness, or at least focusing on reducing their stress levels and having a relaxing travel experience, to be important factors when choosing where to spend their money at a hotel,” Foster says in the report. Although the economic downturn caused the spa market to globally flatten, Harmsworth says it paid off in the long run. “It made all our spa directors and our operations teams address the marketing and financial side in a much more focused way,” she says, “and I don’t think that’s a bad thing.”

PKF’s experts say the opportunity for hotel spas to achieve future growth will be dependent on their ability to convert more hotel guests to spa patrons, raise the price of spa services, increase the number of treatments per spa guest, and attract a greater number of local patrons. To boost business, Harmsworth says hotels should market spas better internally, allow employees to test out the spa so they can speak fluently about it, and train reservationists to book the spa. “The integration of sales and marketing is absolutely key,” she says. “Yield management in a lot of spas is poor, so they should be addressing that with rostering and pricing. They should be able to make their spas profitable, but a lot of it comes down to marketing and cost control.”

Something as simple as measuring massage oils for the therapists rather than letting them pour it directly from the bottles can cut back on sales costs. “ESPA has a cost of product per treatment and it’s all quantified so each therapist knows how much they’re supposed to be using,” Harmsworth says. Massage, skin care, and bodywork treatments continue to generate the most revenue at hotel spas. According to PKF, these services combined represented 72.6 percent of total spa revenue at the properties surveyed and grew by 4.7 percent in 2012. The quality of the treatments will dictate whether hotels garner a loyal following, Harmsworth says. A common mistake U.S. hotels make is overhyping treatment descriptions on spa menus, she adds. “You can’t overpromise, you’ve got to deliver what you say. If you have an Ayurvedic or Balinese treatment, you better be sure it’s not just a Swedish massage with a bit of herbs. The consumer is much more savvy than that.”

Renee Risch, director of sales and marketing at Solage Calistoga, says retail is another way spas can increase their overall profitability. Spa Solage has seen positive results by selling house-branded items, such as a take-home mudslide kit with samplings of clay, ash, and essential oils, and by introducing designer clothing and jewelry. PKF’s survey shows that spa managers have been successful at increasing the purchase of spa merchandise and clothing—retail revenue for hotel spas grew by 6.6 percent in 2012.

The success of hotel spas comes down to listening to customers and creating treatments and programming they are willing to pay for, Manning says. “Spa is a competitive environment. There are a lot of destination resorts and there are a lot of local offerings like Massage Envy. I think there’s room for all of them, they’re all doing something different, but you just have to stand out among your peer group and authentically deliver something that the market wants.”

As more hotels tout themselves as wellness providers, Manning fears a rise in deceptive and misleading marketing, similar to greenwashing. But ultimately, guests will decide what’s genuine and what’s fake. “I think people are going to be able to discern and they’re going to choose products and places that offer really authentic health and wellness experiences,” Manning says. “I think it’s going to be as prevalent and as expected as green initiatives were, where they were new in the relatively recent past, now it’s an assumption, a requirement.”

Although more hotels are catering to health-conscious travelers and finding new ways to integrate wellness, fitness, and nutrition, they will need to develop programming that is sticky and sustainable to standout from the crowd. “While many are trying, it can’t just be the Emperor’s New Clothes, it has to be filled with truly meaningful and impactful ways of keeping the guest more well,” Bjurstam of Six Senses says. “The races have begun and there are enormous amounts of initiatives. We’ll see which ones survive in the long term.”

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