RESEARCH: HOTEL SPAS
Payroll-related expenses (benefits) in the spa are 6.8 per cent lower than the hotel average
benefits component of labour costs. During 2012, payroll-related expenses increased by 8.2 per cent while salaries, wages and bonuses grew by 4.9 per cent. Fortunately for hotel spa operators,
several (if not most) spa therapists work as independent contractors and are not necessarily eligible to receive a full package of benefits. Payroll-related expenses in hotel spas averaged 22.8 per cent of total labour costs in 2012 compared with an average of 29.6 per cent for all hotel employees. Despite the decline in department profit margins, hotel spas were able to achieve growth in departmental income. In aggregate, spa department profits increased by 4.2 per cent in 2012. Achieving greater revenue growth, urban hotel spas were also able to enjoy more growth on the bottom-line compared with resort hotel spas.
Guest conversion needed According to the September 2013 edition of PKF-HR’s Hotel Horizons® forecast report, occupancy levels for hotels in the luxury and upper-scale tiers, in which the major- ity of hotel spas operate, will remain above 70 per cent through 2017. This minimises the potential for significant increases in guest counts in the years to come. Therefore, the opportunity for hotel spas to achieve future
growth will be dependent on their ability to: n Convert more hotel guests to spa patrons n Increase the price of spa services n Raise the number of treatments per guest n Attract greater numbers of local patrons
In a low inflationary and uncertain eco- nomic environment, raising prices will be a challenge. Therefore, educating and expos- ing travellers to the benefits of spa services from a wellness perspective will be a key to success in the future.
On the horizon There’s been much discussion about whether the addition of a spa to a hotel results in a higher average daily rate (ADR). It’s been shown that hotels with spas often have a higher ADR than hotels without spas, however a causal relationship is inconclusive. Simi- larly, there’s discussion as to the occupancy impact that a spa has on a hotel. Based on travel agent survey data, sourced by Spafinder Wellness and presented in its article in PKF’s spa Trends® report, spas do generate travel demand. So it can be concluded that spas do contribute to the occupancy level of the hotels in which they are located. But is it just the spa facility itself, or is it a broader spa and well- ness experience, that drives hotel occupancy and, potentially, room rates?
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The broader aspect – wellness – is expected
to become somewhat less directly correlated to the economy than spa. In the US, more people are moving toward a greater under- standing of the short- and long-term value of taking care of oneself. As this happens, guest expectations at hotels, restaurants, spas and the like are expected to shift towards wellness-oriented experiences. Locations and brands that have moved toward a more wellness-focused experience will be ahead of the curve and better positioned to capture the demand and related benefits, as a result. With strong demand levels and limited supply growth projected, lodging increases in the US are expected to remain above long- run averages for the next few years. There’s no better time for spas to market the many benefits of their wellness experiences on-site so that more of these hotel guests can become spa guests too. l To purchase the full 2013 edition of
PKF-HR’s Trends® in the Hotel Spa Industry visit
www.pkfc.com/store
Andrea Foster is vice-president and national director of spa & wellness consulting, for PKF Consulting USA.
Email:
andrea.foster@
pkfc.com Tel: +1 617 330 8189
Spa Business 1 2014 ©Cybertrek 2014
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