EDITOR’S LETTER Wellness surge breaks the Catch 22
New research shows there’s a tipping point where greater business volume transforms profi tability, indicating the industry must focus single-mindedly on all aspects of occupancy, from yield management to turnaway analysis. Wellness is also key
A of
s more consumers turn to a wellness lifestyle, spas in urban hotels in the US are enjoying the benefits
increased volume, with profits up
signifi cantly, according to a new report from PKFC – Trends® in the Hotel Spa Industry. The report shows spa and wellness as the
standout performers: while spa revenues were increasing at 4.6 per cent in 2013, the combined revenues from other departments, such as food and beverage and retail, only grew by 4.4 per cent. Couple this with the fact that spa managers controlled
their cost increases to 2.5 per cent and urban hotel spa departments were able to translate this growth in revenue into a signifi cant profi t increase of 13.9 percent. Andrea Foster, VP and national director of spa and
wellness consulting for PKFC says the performance is in part explained by growth in volume: “Scheduling spa technicians has always been a challenge. However, as volumes increase, it’s easier for managers to bring on personnel for longer shifts and have the confi dence there’ll be suffi cient revenues to cover the labor cost.” There are wider lessons for the spa industry here. Too
many spas are bumping along the bottom, with low occupancy leading to nervous management limiting therapist availability which leads to higher levels of turnaways, a downward spiral and lack of engagement. It’s exciting that consumer behaviour is driving urban
hotel spas out of this Catch 22 situation and shows the profi t potential spas have when they get critical mass. We need to be brave enough to learn from this and risk ramping up wellness marketing and therapist availability.
PKFC says spa managers in US urban hotel spas translated revenue growth into a signifi cant profi t increase of 13.9 per cent
PKFC found evidence of a wellness ripple eff ect too,
saying that the revenue sources that increased the most were whole-health oriented. They also found customers no longer expect a spa and wellness experience solely in the spa. “We expect hotels to take advantage of the desire for whole-health options and drive revenue elsewhere in the hotel by off ering spa menus, healthy bedrooms/meeting rooms and fi tness programmes like bike shares.” Wellness tourism is high on the industry’s agenda (see
our feature on page 96) and identifi ed by SRI, for the GSWS, as a fast-growing, US$494bn (€384bn, £301bn) market, with 587 million trips in 2013. It’s fascinating to see how this trend is impacting the various market sectors as we move towards a more holistic approach.
Liz Terry, editor twitter: @elizterry
Can wellness help spas drive volume?
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