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RESEARCH


TOP DIVISION


PKF-HR’s latest research shows that US hotel spa revenue is growing more than other department revenue – a notable achievement. Lead researcher Andrea Foster explains why


D


ue to it historical stigma as a luxurious amenity, spa rev- enue initially lagged behind the growth of other revenue sources of US hotels during the early recovery stages from


the economic downturn. But in a significant shift, PKF Hospitality Research (PKF-HR) has found that spa revenue is now growing at a pace equal to, or greater than, most other non-guestroom amenities and services. As the US hotel industry picks up pace –


PKF-HR is predicting a 6.6 per cent increase in average RevPAR in 2014 – the future for spa departments looks even more promising. But how has the division fared so far?


Table 1: Hotel spa revenue continues to recover (US$ PAR) Change in Hotel RevPAR


2006 2007 2008 2009 2010 2011 2012 8.7%


Change in Hotel F&B Revenue 6.9% Change in Hotel Spa Revenue


9.7% 4.3% -6.7% -19.4% -10.5%


6.0% -1.0% -18.7% 5.3% 7.1% 6.3% 5.0% -3.0% -19.5% 5.6% 5.2% 2.5% 8.4% 5.0%


Spa department revenue The 2013 edition of Trends® in the Hotel Spa Industry, by PKF-HR, was based on 125 properties in the US. It shows that in 2012, spa department revenue increased by 5 per cent (see Table 1). This compares favourably to the 2.5 per cent increase in food and beverage


revenue, the second largest source of revenue for most hotels. In addition, spa revenue per treatment room per day (RevPATR) averaged 2.5 times higher than the host hotels’ revenue per available guestroom (RevPAR). Not bad considering treatment rooms are typically one-third smaller in size than guestrooms. The increase in spa department revenue in


2012 is a trend PKF Consulting anticipated as there’s been a notable move towards wellness in the US, specifically taking better care of oneself for improved health and quality of life, of which spas are an important part.


Up-selling extra treatments and pricing has been a barrier for growth in resort spas


Urban vs resort While revenue in both urban hotel (+7.2 per cent) and resort (+3.8 per cent) spas increased in 2012, each achieved their growth in different ways. Urban hotels were able to attract more guests for spa services, as well as increase prices. The net result was a very attractive 16.3 per cent per occupied [hotel guest] room (POR) increase in total spa reve- nue at urban hotels. Resort hotels, on the other hand, suffered a 10.8 per cent decline in total spa revenue measured on a POR basis. With occupancy levels at resorts rising by 2.4 per cent, it can be assumed that resort spa man- agers 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 treat- ments continue to generate the most revenue at hotel spas (see Graph 1). 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,


62 Read Spa Business online spabusiness.com/digital Spa Business 1 2014 ©Cybertrek 2014


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