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RESEARCH: NORTH AMERICA SPA MANAGERS ARE CONCERNED ABOUT THE LESS


CONTROLLABLE BENEFITS COMPONENT OF LABOUR COSTS... BENEFITS INCREASED BY 8.2 PER CENT WHILE SALARIES, WAGES AND BONUSES ONLY GREW BY 4.9 PER CENT


hotels. Resort hotels, on the other hand, suffered a 10.8 per cent decline in total spa revenue measured on a POR basis. With resort occupancy levels up by 2.4 per cent, it can be assumed that resort spa managers struggled with the pricing of services, or were unable to up-sell extra treatments to the newly captured hotel guests. Massage, skincare and body work


treatments continue to generate the most revenue at hotel spas. Combined, these services represented 72.6 per cent of total spa revenue and grew by 4.7 per cent in 2012. While these core spa services grew in 2012, 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 well- ness 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, around two-thirds of demand at hotel spas comes from staying guests and the other third is generated from members and local patrons. Spa managers were also successful at


increasing the retail revenue, which grew by 6.6 per cent in 2012.


Expanding expenses While growth in revenue is welcome news, the increase in business volume also carries with it an increase in expenses. Although spa revenues went up by 5 per cent in 2012, total spa department expenses also rose by


Graph 2: Select Hotel Spa Department Profits – Change from 2011 to 2012*


All hotel spas Urban hotels Resort hotels


4.2% 7.7% 2.8% 0% 1% 2% 3% 4% 5% 6% 7% 122 spa business handbook 2014 8% *Source: PKF-HR 2013


Trends® in the Hotel Spa Industry. Figures shown are before deducting undistributed and fixed charges of hotel


Hotel spas are focusing more on wellness as US consumers increasingly adopt healthier ways of living


5.2 per cent. Accordingly, profit margins in spa departments declined very 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 department 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 in spas do not include overhead costs such as administra- tion, marketing, maintenance and utilities. Labour costs are the single greatest


expense for spa divisions. The combined cost of salaries, wages, bonuses and payroll-related expenses (benefits) equalled 58.6 per cent of total department


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