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Average revenue per treatment room a day was 2.5 times higher than the host hotel’s RevPAR


salon service revenue declined by 0.1 per cent. It’s a challenge for hotel spas to compete with local hair and nail salons on price and loyalty. Data from the 2013 spa Trends® report


indicates that hotel spas continue to seek customers from the local community to supplement revenues from guests at the property. The combined revenue from facility use and membership fees, fitness and personal training and health and wellness services, such as wellness coaching and nutritional consultations, increased by 4.6 per cent in 2012. These are revenue sources which are most frequently associ- ated with local patrons. Consistently over the last few years, approximately two-thirds of demand at hotel spas comes from hotel guests and the remaining one-third is generated from members and local patrons. Spa managers were also successful at increasing the purchase of spa merchandise and clothing. Retail revenue for hotel spas grew by 6.6 per cent in 2012.


Increasing expenses While growth in revenue is certainly welcome news, the increase in business volume also carries with it an increase in expenses. Although spa revenues grew by


Spa Business 1 2014 ©Cybertrek 2014


Graph 1: Select hotel spa revenues – change from 2011 to 2012


Total departmental revenue Massage


Skin care / body work Salon services Daily facility use


Fitness and personal training Health and wellness Membership fees Retail


-0.1% 9.9% 9.1% 0.0% 13.1% 6.6% -2% 0% 2% 4% 6% 8% 10% 12% 14%


5.0% 4.6% 4.9%


5 per cent in 2012, total spa department expenses rose by 5.2 per cent. Accordingly, spa department profit margins declined slightly from 21.6 per cent in 2011 to 21.4 per cent in 2012. With not as much of an increase in volume, it’s not surprising that depart- ment expenses grew less at resort hotels (+4.1 per cent) compared with urban hotels (+7.1 per cent). Like all operated departments in a hotel, total department expenses do not include overhead costs such as administra- tion, marketing, maintenance and utilities.


Labour costs are the single greatest


expense for spa departments. The combined cost of salaries, wages, bonuses and payroll- related expenses (benefits) equaled 58.6 per cent of total department revenue in 2012, or 74.5 per cent of total departmental expense. Because of the high levels of personal ser- vice required at spas, it’s not surprising that labour costs increased by a relatively strong 5.7 per cent from 2011 to 2012. Similar to all department heads in hotels, spa managers are concerned about the less controllable


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